THE FINAL REPORT
or THE
SELECT COMMITTEE ON
PRESIDENTIAL CAMPAIGN ACTIVITIES
UNITED STATES SENATE
PURSUANT TO
S. Res. 60, February 7, 1973
A RESOLUTION TO ESTABLISH A SELECT COMMITTEE OF
THE SENATE TO INVESTIGATE AND STUDY ILLEGAL OR
IMPROPER CAMPAIGN ACTIVITIES IN THE PRESIDENTIAL
ELECTION OF 1972
JUNE 1974
For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 - Price $11.35
Stock Number 5270-02467
U.S. GOVERNMENT PRINTING OFFICE
36-687 0 WASHINGTON : 1974
SENATE SELECT COMMITTEE ON PRESIDENTIAL
CAMPAIGN ACTIVITIES
(Established by S. Res. 60, 93d Congress, 1 st Session)
★
SAM J. ERVIN, Jr., North Carolina, Chairman
HOWARD H. BAKER, Ja., Tennessee, Vice Chairman
HERMAN E. TALMADGE, Georgia EDWARD J. GURNET, Florida
DANIEL K. INOUTE, Hawaii LOWELL P. WEICKER, Jr., Connecticut
JOSEPH M. MONTOTA, New Mexico
Legal Staff
Samuel Dash, Chief Counsel and Staff Director
Fred D. Thompson, Minority Counsel
Rufus L. Edmisten, Deputy Chief Counsel
Assistant Chief Counsel
David M. Dorsen Jambs Hamilton Terri F. Lenzner
Deputy Minority Counsel
Donald G. Sanders
Assistant Majority Counsel
Mare J. Biros Robert M. McNamara* Barry K. Schochet*
Gordon Eugene Boyce* William T. Mayton* W. Dennis Summers
Donald Burris* James C. Moore Alan S. Weitz
R. Phillip Haire* Robert F. Muse
Marc E. Lackritz Ronald D. Rotunda
Assistant Minority Counsel
Howard S. Liebengood Richard L. Schultz Robert Silverstein
Michael J. Madigan H. William Shure
Majority Investigators
Carmine S. Bellino, Chief Investigator
Wayne H. Bishop,* Chief Field Investigator
Harold K. Lipsett,* Assistant Chief Investigator
R. Scott Armstrong Michael J. Hershman* Richard O’Hanlon*
Andy Chinni* Kenneth Jernigan* Scott Parr*
John Dale* Al Keema* Carl Rizer
Mary DeOreo William McCapferty* Lee E. Sheehy
Minority Investigators
Orville Ausen* James Elder* Emily Sheketofp
Robert J. Costa* Benjamin Plotkin*
♦Indicates that the person was not with the Select Committee at the time of the filing
of this report but had, during the life of the committee, provided services to the committee.
(HI
m
Consultants
Arthur S. Miller, Chief Consultant
Herbert Alexander Eugene Gressman Richard Stewart
Jerome Barron Jed Johnson*
Sherman Cohen Charles Rogovin
Administrative Staff
Carolyn M. Andrade, Administrative Assistant
Laura Matz,* Administrative Assistant
Carolyn E. Cohen,* Office Manager
Earline Ching, Office Manager
Madelyn Harvey,* Financial Clerk
Shelley Walker,* Assistant Financial Clerk
Secretaries for Majority Staff
Deborah Actenberg*
Shirley McAlhaney*
Susan Myers*
Phyllis Balan*
Elizabeth McCulley*
Elizabeth Ching
Marianne Brazer*
Carol Mullins*
Margrethe Kavnholt
Phyllis Britt*
Gloria Proctor*
Barbara Friedman
Marie Geneau
Virginia Simmons*
Florence Thoben
Jeanne Havasy*
Julie Smith*
Barbara Kennedy*
Bernita Sloan*
Secretaries for Minority
Staff
Joan C. Cole, Secretary to the Minority
Barbara Chesnik*
Gail Oliver
Karleen Milnick*
Sally Montgomery*
Carol Anderson*
Security Clerks
Linda Beversluis*
Carol Anne Wiik Vicki Movold*
MTST Operators
Collette Elliott*
Sharon Kirby
Elaine Gibbs*
Boyd Gregory*
Dorilda Kobbrge*
NCR Operators
Chris Kogan
Deborah Ferguson
Shirley Strong*
Microfilm Clerk
Alberta Thomas
Donna Schober*
Mark Adams*
Roger Cohen*
Karen Cole
Carolyn Dorais*
Peter Drymalski
Robert Dughi*
James Dunlap*
Michael Frisch*
Computer Research Assistants
Gary Gerson*
Harry Gurkin
Herbert Hoell*
James Holtkamp*
Judy Moreland*
Patrick O’Leary*
John Peterson*
Paul Kamenar*
Linda Satterfield*
Nancy StoBy*
Joseph Tasker*
Donn Walters*
Joseph Gazzoli
Richard Miller
Majority Research Staff Assistants
Pauline O. Dement
John Elmore
Dave Erdman*
John Etridge*
Louise Garland*
Roy Ginsberg*
Grayson Fowler
Deborah Herbst
Joel Klineman*
Michael Kopetski
Lacy Presnell*
James Rowe*
Paul Summit*
William Taylor*
Richard Simmons
Bruce Quan
Martha Talley*
Stephen Stelzner
Minority Research Staff Assistants
Brenda Robeson Gail Waller*
Emily Sheketoff Eric Woottbn
•Indicates that the person was not with the Select Committee at the time of the filing
of this report but had, during the life of the committee, provided services to the committee.
IV
Sally Auman*
Jonathan Blacemee
Gregory Church*
James Copeland*
John Dolan
Staff Assistants
Don Sanford* Joseph Kelley*
Gordon Freedman Thomas Ritter*
John Dondey* Barbara Shatten*
John Greer*
Daniel Higgins*
Volunteers
Stephen Leopold* Linda Cole Ronald Riggs*
Government Printing Office Staff
John M. Walz, Publications Clerk
Michael P. Flanigan, Assistant Publications Clerk
Raymond St. Armand, Assistant Publications Clerk
William B. Fair Charles Hitchens* Arnold Simko*
Ralph M. Binkley Leonard Mogavero*
Library of Congress Computer Staff
John Brightman Gloria Lancaster Gerald Reid
Alan Crosby Noel Peterson Dennis Crossland
Tony Harvey Susan Thomas
Subcommittee on Separation of Powers Personnel!
Walker F. Nolan, Jr.,* Counsel
J. L. Pecore,* Assistant Counsel
J. Michael Carpenter,* Research Assistant
Brent McKnight,* Research Assistant
Judy Dash,* Research Assistant
Suzanne Williams,* Research Assistant
Rachel Dash,* Staff Assistant
•Indicates that the person was not with the Select Committee at the time of the filing
of this report but had, during the life of the committee, provided services to the committee.
tOn loan to Select Committee.
LETTER OF TRANSMITTAL
June 27, 1974.
Hon. James O. Eastland,
President fro tempore ,
U.S. Senate , Washington , Z).C.
Dear Mr. President: Under the authority of Senate Resolution
60, 93d Congress, 1st session, as amended by subsequent resolutions,
I am submitting on behalf of all the members of the Select Commit-
tee on Presidential Campaign Activities, the committee’s final report.
As you know, the Select Committee on Presidential Campaign
Activities was established on February 7, 1973, to make a “complete”
investigation and study “of the extent ... to which illegal, improper,
or unethical activities” occurred in the 1972 Presidential campaign
and election and to determine whether new legislation is needed “to
safeguard the electoral process by which the President of the United
States is chosen.”
I am pleased to report that the committee has completed the vital
and historic task assigned to it by the unanimous vote of the Senate.
It is urgent that the Congress implement the recommendations of the
Select Committee as set forth in this final report in response to the
mandate of S. Res. 60.
With warm regards.
Sincerely,
Sam J. Ervin, Jr Chairman.
(V)
PREFACE
This report represents the culmination of iy 2 years’ work of the
Senate Select Committee on Presidential Campaign Activities. Our
mandate was S. Res. 60, adopted on February 7, 1973, by a Senate vote
of 77-0, which directed the Select Committee to make one of the most
comprehensive investigations in the history of Congress. Although
the task given to the committee appeared in the beginning to be hardly
possible to fully accomplish, I am pleased to report at the end of our
work that the committee did, in fact, successfully complete the mis-
sion given it by S. Res. 60.
It is a matter of special satisfaction and pride to me that our com-
mittee assumed its responsibility initially in a bipartisan manner, and
despite all the pressures inherent in such a highly politically charged
investigation, ended its work in a bipartisan manner. This report is
a unanimous report of the full committee.
I wish to express my deep appreciation and gratitude for the un-
tiring and dedicated contributions and support of all the members of
the committee. Without their sacrifice, valuable advice, and whole-
hearted participation, our task would not have been so fully accom-
plished.
I wish to especially express my gratitude and admiration for the
remarkably splendid and professional job done by the committee’s
chief counsel, Sam Dash. His was the responsibility to plan and super-
vise the investigation, the presentation of witnesses at our hearings,
and the preparation of the report. Our hearings and report are a
tribute to his excellent fulfillment of this responsibility.
The staff who worked under Professor Dash’s supervision were
exceptionally able and talented young men and women. They were
given a herculean task and proved equal to the challenge. The com-
mittee is indebted to them for their tireless and inspired efforts, in-
volving, through most of the committee’s existence, late evening hours,
7 days a week. Special recognition should be given to assistant chief
counsel David Dorsen, James Hamilton, and Terry Lenzner. The bi-
partisan, constructive effort and cooperation of minority counsel Fred
Thompson and his staff helped the committee to complete its work
with one unanimously approved report.
A select committee such as ours, created by the Senate for a spe-
cial function, appears briefly on the Nation’s scene, does its work,
and disappears. It is my firm belief that the bright light this com-
mittee has shed on the matter given it to study, illuminated the Amer-
ican public’s understanding and consciousness of the Watergate affair
and will not quickly fade.
Sam J. Ervin, Jr.,
Chairman , Select Committee on
Presidential Campaign Activities.
(VII)
CONTENTS
Pag«
Letter of Transmittal v
Preface vii
Introduction xxm
I. The committee and its staff xxv
II. Investigative procedures xxvii
A. Use of immunity powers xxvm
B. “Satellite” charts on key witnesses xxix
C. Computer operations xxx
D. Other investigative procedures xxx
III. The public hearings xxxi
Chapter 1 — The Watergate break-in and coverup 1
I. The Watergate break-in and its prelude 1
A. The background of Watergate 3
1. The Huston plan 3
2. The enemies list 7
3. The Plumbers 12
4. Project Sandwedge - 17
5. The hiring of G. Gordon Liddy by the campaign
committee 18
B. The Committee for the Re-election of the President
and its relation to the White House 18
C. The planning of “Gemstone”-. 20
1. The meeting of January 27, 1972 21
2. The February 4, 1972 meeting 22
3. The Colson phone call ... 23
4. The March 30, 1972 meeting 24
5. Financing the operation 25
6. Transmittal of information to Strachan. 26
D. Events leading to the break-in 27
1. The McGovern headquarters attempts 27
2. The first Watergate break-in 28
3. The fruits of the first break-in 29
4. Factors leading to the second break-in 30
II. The coverup 31
A. White House and CRP activity — First 3 days after the
break-in 32
B. The disposition of the contents of Hunt’s safe 35
C. White House concern over the Mexican and Dahlberg
checks 37
D. White House use of the CIA to restrict the FBI Water-
gate investigation 37
E. Mardian-LaRue-Liddy meeting - 40
F. Pressures on Hugh Sloan 41
G. Magruder and Porter perjury 44
H. Participation of White House and CRP personnel in
FBI interviews. ___ 46
I. The President’s statement of August 29 — The so-called
Dean report 47
J. The September 15 meeting between Dean and the
President 48
K. Payoffs to Watergate defendants 51
1. Early payoff discussions 51
2. The activities of Herbert Kalmbach and Tony
Ulasewicz 51
3. The Hunt to Colson telephone call 55
4. The $350,000 White House fund 56
5. Additional pressures by Hunt 57
6. The March 21 meeting in the Oval Office 57
7. Other relevant Presidential meetings concerning
payoffs 60
(xx)
X
Chapter 1 — The Watergate break-in and coverup — Continued Page
L. Representations concerning Executive clemency 63
1. Representations to James McCord 63
2. Representations to Howard Hunt 66
3. Representations to Jeb Magruder 70
4. Representations to G. Gordon Liddy 72
5. Consideration of clemency for Dean and Mitchell- 73
M. Activities relating to other investigations and court
proceedings 73
1. The Patman hearings . 73
2. The civil suits 74
3. CIA investigative materials . 75
4. Other activities relating to the Select Com-
mittee .. 76
a. The La Costa meeting 76
b. Documentary and other evidence indicat-
ing the White House strategy 78
5. Henry Petersen’s Communications to the Pres-
ident 80
N. The beginning of the unraveling of the coverup 82
1. The February 28 meeting 83
2. The March 13 meeting 84
3. The March 21 meeting 86
4. The Camp David trip 89
5. Dean’s initial contacts with prosecutors and the
Select Committee-.. : 89
6. The Ehrlichman investigation 90
7. The attempt to have Mitchell take the blame 91
8. The President’s April 15 meeting with Kleindienst
and Petersen 91
9. Further meetings between the President and
Dean 92
10. The question of immunity for Dean 93
11. The President’s April 30 statement. 95
III. Recommendations 96
Chapter 2 — Campaign Practices 107
Introduction... ^ 107
I. White House-inspired political activities, 1968-71 109
A. Caulfield and Ulasewicz 109
1. Electronic surveillance 111
2. Operation Sandwedge 113
3. Other surveillance — Senator Edward M. Kennedy. _ 117
B. The Plumbers 119
C. Investigation of the Brookings Institution 124
D. Diem cable incident 125
E. ITT and Dita Beard , 127
F. The Plan for an investigation of Arthur Bremer 129
G. Misuse and attempted misuse of Government agencies by
the White House, 1969 through 1972... 130
1. Introduction 130
2. Internal Revenue Service 130
a. Political enemies project 130
b. The enemies list and the Internal Revenue
Service 132
c. Tax information and audits requested of the
Internal Revenue Service 133
(1) Sensitive case reports 134
(2) Requests for audits 135
(3) Requests for taxpayer information
from the IRS 137
(4) Special Service Staff 139
(5) Tax-exempt foundations 141
3. Federal Bureau of Investigation 143
XI
Chapter 2 — Campaign Practices — Continued Pago
4. Department of Justice 145
a. Antitrust policy 145
b. Internal Security Division 146
c. Parole Board ^ 147
5. Secret Service 147
6. Other agencies 149
a. Federal Communications Commission 149
b. ACTION (formerly the Peace Corps and
Vista) . 150
H. Public relations in the White House 150
1. Introduction 150
2. Letterwriting 150
3. Direct mailing 153
4 . Citizens committees 154
a. Tell It To Hanoi Committee 154
b. Citizens Committee To Safeguard America. _ 155
c. Committee For A Responsible Congress 155
d. Committee For The Congress of 1970 __ 156
e. Labor For America Committee 157
f. Citizens For A Liberal Alternative.. .. 157
II. 1972 campaign 158
A. Political strategy . 158
B. Implementation of White House and CRP strategy 160
1. Donald Segretti 160
a. Hiring 160
b. Activities 163
(1) Summary... 163
(2) Relationship with Chapin 163
(3) Relationship with Hunt and Liddy. 165
(4) Primary activities 166
(a) Infiltrators 167
(b) Surveillance 168
(c) Disruptions 168
(i) Distribution of
false and mis-
leading litera-
ture 168
(ii) False advertising. 173
(iii) Pickets 174
(iv) Other disrup-
tions 176
c. Segretti coverup 178
d. White House press response 184
2. Other intelligence-gathering and disruption 187
a. Ruby I 187
b. Sedan Chair I 190
c. Sedan Chair II 192
d. Ruby II 196
e. Colson suggestions 197
f. Chapman’s friend 199
g. Young voters for the President demonstra-
tions 200
h. Use of advance people 201
i. Vote siphoning schemes 202
j. Unsigned literature 205
3. Impact on Democratic campaigns 205
C. Improper activities directed against President Nixon’s
re-election campaign ; 207
1. Demonstrations 207
2. Campaign violence and harassment 210
3. Campaign literature 211
III. Recommendations 211
Exhibits to chapter 2 214
XII
Page
Chapter 3 — Use of Incumbency — Responsiveness Program - 361
I. Introduction and overview 361
II. Early manifestations of administration’s interest in using the
incumbency to affect the reelection effort.. 362
III. The “Responsiveness Program” — the administration’s basic
plan to employ Federal resources to affect the 1972 Presi-
dential election 367
A. The general plan 367
B. The plan as conceived with particular reference to
minority groups 373
1. Spanish-speaking plans 373
2. Black plans 375
IV. Communication of the responsiveness concept to Government
and campaign officials 378
V. Results of the Responsiveness Program and other related
activities — 380
A. Activities respecting the Spanish-speaking 380
1. Organization of Spanish-speaking effort 381
2. Activities involving the dispensing of Federal
funds 382
a. Specific activities to help administration
friends : ; — 384
(1) J. A. Reyes & Associates 384
(2) Ultra-Systems, Inc 385
b. Action against persons not supportive of
the administration 386
(1) Development Associates (Leveo
Sanchez) 387
(2) Activities respecting other non-
supportive companies 390
c. “Neutralization” of potential opponents.. 391
d. Malek’s comments on grantmaking ac-
tivity as to Spanish-speaking con-
stituents 393
3. Cabinet Committee on Opportunities for Spanish-
Speaking People and the Media Effort 394
a. The Cabinet Committee 394
b. The Media Plan 395
c. Hoy 397
4. Other efforts by the Spanish-speaking task force
to promote the President’s reelection 397
a. La Raza Unida matter 397
b. Reies Lopez Tijerina matter 400
c. Alfred Hernandez matter 401
d. Ed Pena matter 402
e. Request for a demonstration 403
f. Holding back census data 404
B. Activities respecting black constituents 405
1. James Farmer matter 405
2. Charles Wallace matter . — .. 406
3. Additional involvement of campaign officials in
governmental processes 407
4. Solicitation of contributions from black recipients
of Federal moneys 409
C. The Responsiveness Program progress report 410
1. EEOC-University of Texas matter 410
2. Dock and Wharf Builders investigation 411
3. Fannie Mae inquiry 411
D. GSA matters 412
1. Campaign involvement in GSA contract
awards 412
2. Solicitation of political contributions 413
E. Activities regarding the staffing of Federal positions. . 414
1. Part-time boards and commissions 414
2. Noncareer personnel generally 415
3. Competitive service positions 416
XIII
Chapter 3 — Use of Incumbency — Responsiveness Program — Continued Page
F. Activities regarding the elderly 419
1. Use of Federal resources 419
a. Government brochures 419
b. Other uses of Government funds 423
2. The Federation of Experienced Americans 424
G. Other related activities 429
1. Conduct at the Veterans’ Administration 429
2. The surrogate program advance school 430
3. Activities re military voters 430
VI. Resistance in the bureaucracy to the responsiveness concept,. 431
A. The failure of the departments and agencies to submit
responsiveness plans 431
B. DOL migrant labor grant _ 433
C. Approach to HUD 433
D. Difficulties with OMBE 434
VII. Purported cancellation of the Responsiveness Program 436
VIII. Discussion 437
IX. Recommendations _ 442
Chapter 4 — Campaign Financing 445
Introduction 445
I. Corporate contributions 446
A. American Airlines, Inc 447
B. American Ship Building Co 451
C. Ashland Oil Co., Inc 459
D. Braniff Airways, Inc _ 462
E. The Carnation Co 464
F. Diamond International Corp... 464
G. Goodyear Tire & Rubber Co 465
H. Gulf Oil Corp 469
I. The Hertz Corp 473
J. Lehigh Valley Cooperative Farmers, Inc 481
K. Minnesota Mining & Manufacturing Co 484
L. Northrop Corp 486
M. Phillips Petroleum Co 489
II. Ambassadorships 492
Table showing contributions of ambassadors appointed by
President Nixon 493
A. J. Fife Symington 497
B. Vincent de Roulet 501
C. C. V. Whitney 504
III. Role of Herbert W. Kalmbach in the campaign 505
Individuals solicited by Herbert W. Kalmbach and actual
contributions 508
IV. Union activity 511
A. Farmworkers political education fund 511
B. Seafarers Political Action Donation Committee 512
V. Robert H. Allen — Mexican checks , 514
VI. National Hispanic Finance Committee — Benjamin Fernandez
and John Priestes . 522
VII. Committee questionnaires 526
A. The sample canvassed 526
B. Results of questionnaire survey 527
C. Contributions by corporate executives 528
D. Union contributions to Presidential candidates 530
VIII. Corporate oriented solicitation 544
A. The corporate conduit program 544
1. The plan 544
2. The execution of the plan 545
3. CGSP — Direct mail program 547
B. Industry-by-industry program 548
C. Separate segregated funds: Corporate good Government
committees 550
1. Gould, Inc 552
2. Tennessee Eastman Co 553
xrv
Chapter 4 — Campaign Financing — Continued -Page
IX. Compromise of campaign debts 553
Schedule of forgiven debts in excess of $100 556
X. Cash contributions by contractors 558
XI. Campaign financing recommendations 563
Chapter 5 — Milk Fund 576
Introduction - .. 579
I. Background — The three leading dairy cooperatives and their
political arms 582
A. Associated Milk Producers, Inc 583
1. AMPI 583
2. TAPE/CTAPE 584
B. Dairymen, Inc 585
1. DI 585
2. SPACE.,.. 586
C. Mid- America Dairymen, Inc 586
1. Mid- Am 586
2. ADEPT 586
II. $100,000 cash contribution to Kalmbach in 1969 — AMPI’s
objectives 587
A. AMPI contacts with administration officials and
Kalmbach prior to the contribution 587
1. John Mitchell, Jack Gleason and referral to
Herbert Kalmbach 587
2. Contacts with Kalmbach — $100,000 in cash 589
3. Purpose of the contribution — AMPI’s three
“objectives” 591
B. The contribution: Preparation and delivery 593
C. Disposition of the contribution and subsequent AMPI-
White House contacts in 1969 595
1. Disposition of the contribution 595
2. Contacts between AMPI and White House
officials in 1969 after the contribution 595
D. Corporate funding of the $100,000 contribution 596
1. Nelson-Isham-Pierson meeting 596
2. $100,000 loan to Lilly 598
3. The alleged conduits 599
a. Stuart Russell 599
b. Jake Jacobsen and Joe R. Long 602
c. W. DeVier Pierson 604
d. Ted Van Dyk and Kirby Jones 605
e. James R. Jones 607
f. Frank Masters 609
g. Richard Maguire 610
h. Clifford Carter .... 611
E. Use of the conduit scheme for other corporate political
contributions 611
III. Contacts between AMPI and the President and administration
officials in 1970 — an alleged $2 million pledge to the Presi-
dent’s reelection campaign 612
A. Meetings with Colson — the $2 million pledge 612
1. Meetings with Colson 612
2. The $2 million pledge 613
a. Colson — a “$2 Million Package” 613
b. $2 million and the reelection campaign.. 614
B. Contacts with the President — the $2 million pledge 616
1. President’s call to Nelson.. 616
2. Presidential meeting with Nelson and Parr 617
3. Presidential action on dairy import quotas 619
a. USDA and Tariff Commission action 619
b. Hillings’ letter to the President — import
quotas and the $2 million pledge 619
c. Presidential proclamation on import
quotas 621
XV
Chapter 5 — Milk Fund — Continued
IV. The 1971 price-support decision by the President, and dairy
trust contributions to the President’s campaign
A. The Department of Agriculture decisionmaking process
prior to March 23
1. The March 12 decision
a. Statutory background --
b. Preparation for the March 12 decision —
c. The March 12 decision
2. USDA inaction from March 12 to March 23
B. Milk producers’ activity prior to March 23
1. Presentations to USDA
a. Pre-March 12
b. March 12-23 .
2. Efforts to secure congressional support
C. White House involvement prior to March 23
1. March 12 decision
a. OMB and CEA review
b. Presidential review
2. March 12-23
a. Murray Chotiner
b. John Ehrliehman
(1) Meeting on March 19
(2) Ehrliehman call to Parr
D. Milk producer contacts with John Connally prior to
March 23
1. Contacts by Jake Jacobsen
2. Contact with Bob Lilly at Page Airways
E. Milk producer contribution activity prior to March 23..
1. $2 million commitment
2. Contributions to the March 24, 1971, Republi-
can dinner
F. March 23 -
1. 9 a.m. — Colson-Chotiner meeting
2. 10:15 a.m.— President’s call to Connally
3. 10:30 a.m. — Meeting between the President and
milk producers.
a. Preparation for the meeting
b. Whitaker’s briefing paper for the Presi-
dent
c. The meeting
4. 12 noon — President, Shultz and Ehrliehman
meeting
5. 4:45 p.m. — Meeting between the President and
his advisers
6. 5:50 p.m. — Ehrliehman- Colson meeting
7. 6 p.m. — Colson-Chotiner meeting
8. Chotiner call to Nelson
9. Campbell call to Nelson
10. Ehrlichman-Kalmbach call
11. Jacobsen call to Connally. ...
12. Late night meeting in Louisville
G. March 24
1. $75,000 from SPACE and ADEPT
2. 5:30 p.m. — Ehrlichman-Kalmbach meeting
3. Kick-off 1972 Republican dinner
4. Chotiner-Nelson-Kalmbach meeting
a. Chotiner’s account...
b. Nelson’s account
c. Kalmbach’s account
5. Nelson-Parr conversation..
H. March 25 price support decision and the aftermath
1. The March 25 announcement
2. Milk producer reaction to the decision
3. White House treatment of the commitment
after March 25
Page
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XVI
Chapter 5 — Milk Fund — Continued Page
I. In defense of the President — A “Gun to Our Head”... 673
1. Congressional pressure 674
a. Extent of congressional support 674
b. The likelihood and timing of passage 675
c. The question of a Presidential veto 676
d. Impact of the President’s decision 677
2. Justification on the merits of the President’s
decision 678
3. Milk producer contributions and the President. 680
a. Significance to the President of milk
producer contributions 680
b. Significance to the milk producers of
their contributions to the President. . 681
V. Milk producers’ contribution activity in 1971 following the milk
price support decision — Money for Connally, the President’s
campaign, and the Ellsberg break-in. 682
A. AMPI cash payments for Connally 683
1. $10,000 for Connally 683
a. Lilly’s testimony 683
b. Jacobsen’s and Connally’s testimony 684
c. Other evidence 685
2. $5,000 for Connally 686
B. Milk producers’ contributions to the President’s cam-
paign— the 1971 AMPI convention 688
1. $50,000 from ADEPT and $10,000 from
SPACE 688
2. Public disclosure of $232,500 to numerous Nixon
committees 689
a. The contributions 689
b. Rose Mary Woods’ list. 692
c. Public disclosure 693
3. 1971 AMPI convention and the President 694
4. Funding the Ellsberg break-in 694
a. Joseph Baroody and AMPI 694
b. Repayment for the break-in 696
c. Haldeman and Ehrlichman approval of
the milk producer repayment. 698
VI. Milk producer contribution activity in 1972 prior to April 7 —
the Justice Department antitrust suit against AMPI 699
A. The Justice Department antitrust suit against AMPI 699
1. Department staff investigation and recommen-
dations 700
2. Attorney General Mitchell’s actions 701
3. Prefiling negotiations and the filing of the suit 703
B. White House involvement prior to the filing of the suit. _ 705
1. Monitoring of the antitrust investigation by
White House aides 705
2. Haldeman-Mitchell meeting 706
3. Other Mitchell contacts 707
C. Fundraising meetings between AMPI and Kalmbach
in January and February 1972 708
1. Kalmbach-Nelson-Jacobsen meeting on Jan-
uary 14 708
2. Kalmbach-AMPI meeting on February 3 710
a. Nader v. Buts. 710
b. George Mehren and the question of
previous commitments of contribu-
tions 711
c. February 3 meeting : 712
D. Milk producer meetings on March 16 with Kalmbach
and Connally 713
1. Meeting with Kalmbach 714
XVII
Chapter S — Milk Fund — Continued Page
2. Meeting with Connally 715
a. IRS and Justice Department inves-
tigations * 715
b. The meeting 718
c. Lilly’s account , 720
3. Disposition of the tax investigations 721
E. April 4, 1972 — An aborted contribution and the anti-
trust suit 722
1. Pre-April 4 discussions 723
a. Kalmbach, Jacobsen, and Mehren 723
b. Chotiner and Mitchell 723
2. April 4 meeting and contacts with Kalmbach
about the antitrust suit and contributions. _ 725
a. The meeting 725
b. Kalmbach’s call to Mehren 726
c. Corroboration of Lilly’s account 726
VII. Milk producer contributions to the President’s campaign after
April 7, 1972 729
A. $95,000 from ADEPT and SPACE 729
1. Meeting with Connally and $50,000 for Demo-
crats for Nixon 730
2. $45,000 to FCRP _ 731
B. $200,000 to the President’s campaign 732
1. Nunn-Mehren meeting 733
2. L.B.J.-Mehren meeting 734
3. Lilly-Mehren meeting 735
4. $350,000 to Republican congressional commit-
tees — Alleged $200,000 passthrough to FCRP. 736
a. Milk producers’ version 737
b. Prior RNC transfers to congressional
committees 739
c. Other evidence of alleged passthrough — 741
Appendix A — Persons and organizations.-.-.. , 745
Appendix B — Milk fund — Chronology. 747
Appendix C — Selected documents. ..I .' 755
Appendix D — Selected House Judiciary Committee materials 772
Chapter 6. — The 1972 Presidential campaign of Senator Hubert H. Hum-
phrey — Financial elements 869
Preface 4 869
I. Corporate contributions to the 1972 Presidential campaign of
Hubert H. Humphrey by Associated Milk Producers, Inc. —
Valentine, Sherman and Associates matter 870
A. Summary 870
B. Associated Milk Producers, Inc 871
C. Valentine, Sherman and Associates 871
D. VSA’s initial proposal to AMPI 872
E. VSA’s arrangements with AMPI regarding services in
various States 873
F. The corporate payments by AMPI 874
G. AMPI contributions to Senator Humphrey’s Presiden-
tial campaign : 876
1. The $25,000 corporate payment 876
2. Indications that AMPI officials intended more
than $25,000 of the $137,000 to be for Senator
Humphrey’s benefit 878
II. The preparation of bogus documentation; the provision
of useless lists to AMPI by VS A 880
II. Senator Humphrey’s support for legislation favorable to milk
producers, and other contributions from dairy producer
cooperatives 881
A. Summary. 881
B. Background 882
C. Senator Humphrey’s action in March 1971 882
D. Contributions by dairy trusts to Senator Humphrey 883
35-S37 0 - 74 -2
XVIII
Chapter 6 — Continued
III. Large individual contributions to the Humphrey campaign Page
before April 7, 1972 883
A. Summary 883
B. Introduction 884
C. Background 885
D. The Humphrey Presidential campaign takes form —
Humphrey Volunteer Committee; Friends of Hum-
phrey Committee ... 886
E. Humphrey for Senator Committee — Continued use 886
F. Use of the Chestnut law firm trust account 886
G. Backers of Humphrey Committee — Jackson and Com-
pany 887
H. Archer-Daniels-Midland shares contributed — The Hum-
phrey “ Blind Trust” 888
I. Affidavits of Andreas, Hastings, McMurtrie 888
J. Chestnut interviews 890
K. Investigative delays 890
L. Destruction of financial records 891
M. Perspective and disposition 892
IV. Contribution from Minnesota Mining and Manufacturing Co 893
A. Summary 893
B. The contribution 893
V. Contribution of $50,000 by John L. Loeb, Sr 894
A. Summary 894
B. Senator Humphrey meets with Loeb — The solicitation.. 895
C. Assembling the contribution 896
D. Delivery and receipt of contribution — Reports to GAO. 897
E. Thatcher’s 1973 conversation with Humphrey 897
F. Loeb’s prosecution. 897
G. Status of the matter 898
Attachment to Chapter 6 899
Chapter 7 — The 1972 Presidential campaign of Congressman Wilbur D.
Mills — Financial elements 903
Preface 903
I. Contributions from Associated Milk Producers, Inc 904
A. Introduction 904
B. Contributions by political action committees — Mills’
support of legislation favorable to dairy producers 905
1. Summary. 905
2. Background 905
3. Support from Mills 906
4. Dairy trust contributions to Mills 908
5. Completion of investigation 908
C. Cash from corporate assets of Associated Milk Pro-
ducers, Inc 908
1. Summary 908
2. $5,000 in August 1971 909
3. $5,000 in November 1971 910
D. Services rendered by employees of Associated Milk
Producers, Inc 911
1. Summary.. 911
2. Joe Johnson, Terry Shea, Betty Clemen
Bullock 911
3. Other AMPI employees in New Hampshire
and elsewhere 915
E. Expenses of Iowa cooperative month rally 915
1. Summary 915
2. Designation of Iowa Co-op Month 916
3. Evidence of Congressman Mills’ call to solicit
forum 916
4. Assurance of financial backing — 916
5. Congressman Mills is formally invited 917
6. AMPI employees’ services — Payment of ex-
penses . 917
XIX
Chapter 7 — Continued p age
7. Promotion of Congressman Mills as a purpose.. 918
F. Solicitation of donations from AMPI employees 920
1. Summary 920
2. Aggregation of employees’ checks for Mills 921
3. Employee checkoff system.. 922
G. Advertising material provided through Walker &
Associates, Inc 922
1. Summary 922
2. The transaction 922
II. Contribution from Gulf Oil Corp 923
A. Summary 923
B. The transaction 923
III. Contribution from Minnesota Mining & Manufacturing Co 925
A. Summary 925
B. The transaction 926
Attachment to Chapter 7 928
Chapter 8 — The Hughes-Rebozo investigation and related matters 931
Introduction *•„ . 931
I. Hughes and the Hughes Nevada operations 933
II. Background of the contribution commitment 933
A. Danner’s version of contribution commitment __ 934
B. Rebozo’s version 935
C. Meeting among Danner, Rebozo, and Morgan. 936
D. New York meeting 937
III. Attempted contribution at Palm Springs 938
IV. Rebozo’s 1969 responsibilities 940
A. Introduction 940
B. Fundraising 940
C. Disbursal of funds 941
D. Acting as agent for President Nixon at Key Biscayne. . 943
V. Delivery and retention of the contributions — Introduction and
summary of facts 944
A. Testimony and statements of the principals 948
1. Richard Danner 949
2. Robert A. Maheu 951
3. Peter R. Maheu 952
4. Thomas G. Bell 953
5. Charles G. Rebozo 954
B. An analysis of possible sources of the contributions 956
1. Preelection 1968 . 956
2. The Sands Hotel cage — -early December 1968. . 956
3. Nadine Henley — December 5, 1968 .. 958
4. Nadine Henley — June 27-July 11, 1969 960
5. Silver Slipper Casino — October 26, 1970 960
6. A note on storage of the money before delivery
to Rebozo 961
C. An analysis of possible delivery dates... 962
1. December 1968 — the Bahamas 962
2. April 2-10, 1969 — Key Biscayne 963
3. June 26, 1969 — Key Biscayne 963
4. September 11-12, 1969 — Key Biscayne 963
5. February 3-5, 1970 — Key Biscayne 965
6. March 20-22, 1970 — Key Biscayne 966
7. July 3, 1970— -San Clemente 967
8. August 19-20, 1970 — -Key Biscayne 967
9. October 28-30, 1970 — Key Biscayne 968
D. Storage of the money by Rebozo 968
E. The Federal Reserve evidence compared to the sources
and the deliveries 972
1. The mechanics of tracing the $100,100 972
2. Some general facts about the money Rebozo
returned 974
3. The “matching” numbers 975
XX
Chapter 8 — Continued
4. The facts compared with possible sources of the
deliveries
5. The facts compared with possible dates of
delivery
VI. Dunes Report — Introduction
A. Prior Antitrust Division review of Hughes’ hotel
activities — the Stardust and Landmark cases
B. The Dunes
1. How it began
2. The Mitchell-Danner meetings
a. Danner’s testimony
b. Mitchell’s statement.
3. What happened in the Antitrust Division
4. The FBI’s role.
5. The “anticrime” factor in the Dunes decision..
6. What happened after the March 26 memo-
randum
7. The negotiations and their collapse
C. Conclusion
VII. Rebozo’s 1972 campaign fundraising role
VIII. Return of the Hughes contribution
IX. The IRS investigation of Rebozo
IRS audit of Larry O’Brien;
X. The issue of use of the money
A. Background
B. Summary of facts
C. The Coopers & Lybrand report
D. Expenditures by Rebozo concealed from accountants. _
E. The improvements on the President’s Key Biscayne
properties
1. Architect fees and tile repairs — $3,335
2. Architectural model of 500 Bay Lane — $395.65.
3. Conversion of garage into living quarters, 516
Bay Lane — $11,978.84
4. Putting green at 516 Bay Lane — $243.57
5. The President’s payments for work on his Key
Biscayne properties — $76,053.02
F. The Wakefield trust accounts ...
1. Construction of swimming pool and accessories —
$18,435.18
2. Pool heater
3. Screen enclosure at pool
4. Pool carpet
5. Pool furniture
G. Summary of Wakefield trust account payments
H. Rebozo’s financial situation
1. No record of pool costs in President’s books
2. The fireplace
3. The pool table
4. Fuel oil payments
I. The Florida Nixon for President Committee account..
J. Purchase of earrings for Mrs. Nixon from Harry Wins-
ton
K. President Nixon beneficiary of loan note signed by
C. G. Rebozo
L. Summary of total payments on behalf of President
Nixon
M. $20,000 cash funds in Rebozo’s possession — September
1969 ...
N. The President’s response
O. Rebozo’s response
P. Other recipients of campaign funds
Q. Summary chart
Page
976
978
980
981
983
983
984
985
989
989
991
992
994
996
998
998
1001
1016
1025
1030
1030
1031
1032
1033
1034
1034
1035
1035
1036
1036
1036
1038
1039
1039
1040
1040
1041
1044
1044
1045
1045
1045
1046
1047
1048
1049
1050
1051
1051
1052
1052a
XXI
Chapter 8 — .Continued Page
XI. A summary analysis of conflicting evidence 1053
A. Initiator of the contribution 1053
B. Actual delivery of funds 1053
C. Initiator of first delivery 1055
D. Purpose of the money 1055
E. Individuals who had knowledge of the receipt of the
Hughes contribution 1056
F. Conditions under which the money was stored 1057
G. Other contributions 1058
H. Return of the money 1060
I. Camp David meeting 1066
J. IRS investigation ... 1067
XII. Summary 1068
XIII. Legislative recommendations 1071
Appendix (List of individuals interviewed) 1075
Chapter 9 — The Select Committee in court.: 1079
I. Overview of litigation 1079
II. Discussions and recommendations 1084
Chapter 10 — The Select Committee’s use of computer technology 1087
I. Introduction and overview 1087
II. Processing the data 1088
III. Format of the data 1089
IV. Investigative use of the computer 1091
V. Cooperation with other investigative bodies 1092
VI. Microfilm procedure 1093
VII. Disposition 1094
Chart — -Data processing flow 1095
Chapter 11 — Individual views of Senators of the Select Committee:
Ervin, Sam J., Jr., chairman 1097
Baker, Howard H., Jr., vice chairman 1105
Inouye, Daniel K., and Joseph M. Montoya, joint views 1167
Gurney, Edward J 1171
Weicker, Lowell P., Jr 1175
Resolutions pertaining to Select Committee 1231
INTRODUCTION
This report presents the findings and recommendations of the Senate
Select Committee on Presidential Campaign Activities based on its
investigation of the Watergate break-in and coverup, illegal and
improper campaign practices and financing, and other wrongdoing
during the Presidential campaign of 1972. Once termed “a cancer
growing on the Presidency” by a principal committee witness, 1 Water-
gate is one of America’s most tragic happenings. This characterization
of Watergate is not merely based on the fact that the Democratic
National Committee headquarters at the Watergate was burglarized
in the early morning hours of June 17, 1972. Bather, it is also an
appraisal of the events that led to the burglary and its sordid after-
math, an aftermath characterized by corruption, fraud, and abuse of
official power.
The Select Committee is acutely conscious that, at the time it pre-
sents this report, the issue of impeachment of the President on
Watergate-related evidence is pending in the Judiciary Committee
of the House of Eepresentatives. The Select Committee also recognizes
that there are pending indictments against numerous defendants, most
of whom were witnesses before the committee, which charge crimes
that, directly or indirectly, relate to its inquiry. It thus must be
stressed that the committee’s hearings were not conducted, and this
report not prepared, to determine the legal guilt or innocence of any
person or whether the President should be impeached. In this regard,
it is important to note that the committee, during its short lifespan,
has not obtained all the information it sought or desired and thus
certain of its findings are tentative, subject to reevaluation when the
full facts emerge. Moreover, the committee, in stating the facts as
it sees them, has not applied the standard of proof applicable to a
criminal proceeding — proof beyond a reasonable doubt. Its conclu-
sions, therefore, must not be interpreted as a final legal judgment that
any individual has violated the criminal laws.
The committee, however, to be true to. its mandate from the Senate
and its constitutional responsibilities, must present its view of the
facts. The committee’s enabling resolution, S. Ees. 60, 93d Cong., 1st
Sess. (Feb. 7, 1973) 2 which was passed by a unanimous Senate, in-
structs the committee to make a “complete” investigation and study
“of the extent ... to which illegal, improper, or unethical activities’’
occurred in the 1972 Presidential campaign and election and to deter-
mine whether new legislation is needed “to safeguard the electoral
process by which the President of the United States is chosen.” S. Ees.
60, sections 1(a) and 2. Thus the factual statements contained in this
1 S Hearings 998.
2 See the Appendix to the Hearings of Legal Documents, p. 3.
(XXIII)
XXIV
report perform two basic legislative tasks. First, they serve as a basis
for the remedial legislation recommended herein which the commit-
tee believes will assist in preserving the integrity of the electoral
process not only for present day citizens but also for future genera-
tions of Americans. Second, they fulfill the historic function of the
Congress to oversee the administration of executive agencies of Gov-
ernment and to inform the public of any wrongdoing or abuses it
uncovers. The critical importance of this latter function cannot be
over-emphasized. As the Supreme Court said in Watkins v. United
States , 354 U.S. 178,200 (1957) :
[There is a] power of the Congress to inquire into and pub-
licize corruption, maladministration or inefficiency in agen-
cies of the Government. That was the only kind of activity
described by Woodrow Wilson in “Congressional Govern-
ment” when he wrote : “The informing function of Congress
should be preferred even to its legislative function.” Id ., at
303. From the earliest times in its history, the Congress has
assiduously performed an “informing function” of this
nature.
And, in United States v. Rumely , 345 U.S. 41, 43 (1953), the Supreme
Court termed the informing function “indispensable” and observed:
“It is the proper duty of a representative body to look dil-
igently into every affair of government and to talk much
about what it sees. It is meant to be the eyes and the voice,
and to embody the wisdom and will of its constituents. Un-
less Congress have and use every means of acquainting it-
self with the acts and the disposition of the administrative
agents of the government, the country must be helpless to
learn how it is being served ; and unless Congress both scru-
tinize these things and sift them by every form of discus-
sion, the country must remain in embarrassing, crippling
ignorance of the very affairs which it is most important that
it should understand and direct. The informing function of
Congress should be preferred even to its legislative function.”
Wilson, “Congressional Government,” 303.
It is in part to fulfill the historic “informing function” that the com-
mittee reveals to the public the detailed facts contained in this report.
Before turning to a recitation of the facts as the committee sees
them, certain general observations based on the evidence before the
committee are appropriate. The Watergate affair reflects an alarm-
ing indifference displayed by some in the high public office or position
to concepts of morality and public responsibility and trust. Indeed,
the conduct of many Watergate participants seems grounded on the
belief that the ends justified the means, that the laws could be flaunted
to maintain the present administration in office. Unfortunately, the
attitude that the law can be bent where expediency dictates was not
confined to a few Government and campaign officials. The testimony
respecting the campaign funding practices of some of the Nation’s
largest and most respectable corporations furnishes clear examples of
the subjugation of legal and ethical standards to pragmatic con-
siderations. Hopefully, after the flood of Watergate revelations the
country has witnessed, the public can now expect, at least for some
years to come, a higher standard of conduct from its public officials
and its business and professional leaders. Also, it is hoped that the
XXV
Watergate exposures have created what former Vice President Ag-
new has called a “post-Watergate morality” where respect for law
and morality is paramount.
In approaching its task of recommending remedial legislation, the
committee is mindful that revelations of past scandals have often
failed to produce meaningful reform. Too frequently there is a ten-
dency to overreact in the wake of a particular scandal and burden the
penal code with ill-considered laws directed to the specific— perhaps
aberrational — conduct exposed. This proliferation of criminal laws
has tended to over-complicate the penal code and, consequently, to im-
pair the effectiveness of its administration. Moreover, legislation is,
at best, a blunt weapon to combat immorality.
While this report does make certain specific recommendations for
new criminal legislation or for strengthening existing criminal laws,
the committee has been careful to recommend only where the need
is clear. Its major legislative recommendations relate to the creation
of new institutions necessary to safeguard the electoral process, to
provide the requisite checks against the abuse of executive power
and to insure the prompt and just enforcement of laws that already
exist. Surely one of the most penetrating lessons of Watergate is that
campaign practices must be effectively supervised and enforcement of
the criminal laws vigorously pursued against all offenders — even those
of high estate — if our free institutions are to survive.
The committee’s mandate was broad and its time to meet it brief.
Nonetheless, the committee believes that, through its efforts and those
of others, the basic facts of the Watergate scandal have been exposed
to public view and, as a result, the American people have been re-
awakened to the task democracy imposes upon them — steadfast vig-
ilance of the conduct of the public officials they choose to lead them.
This public awareness, in turn, has provided the atmosphere neces-
sary to support other essential governmental responses to Water-
gate such as the work of the Special Prosecutor and the activities of
the House Judiciary Committee on impeachment. Because the Nation
is now r alert, because the processes of justice are now functioning and
because the time is ripe for passage of new laws to safeguard the
electoral process, the committee is hopeful that, despite the excesses
of Watergate, the Nation will return to its democratic ideals estab-
lished almost 200 years ago.
I. THE COMMITTEE AND ITS STAFF
As noted, the II.S. Senate created the Senate Select Committee on
Presidential Campaign Activities on February 7, 1973, by unanimous
adoption of S. Res. 60. The seven committee members appointed by
the Senate leadership to answer the mandate of S. Res. 60 were Sam
J. Ervin, Jr. (D-N.C.), chairman; Howard H. Baker, Jr. (R-Tenn.),
vice chairman; Herman E. Talmadge (D-Ga.) ; Daniel K. Inouye (D-
Hawaii) ; Joseph M. Montoya (D-N. Mex.) ; Edward J. Gurney (R-
Fla.) ; and Lowell P. Weicker, Jr. (R-Conn.) .
Like the Select Committee formed to investigate the “Teapot Dome”
scandals nearly a half a century ago, the Senate “Watergate” Commit-
tee, as it was quickly renamed by the news media, was born in the
crisis of a serious loss of confidence by the public in its national Gov-
XXVI
ernment. At the time the committee was established, the trial of the
Watergate burglars had been recently completed with the conviction
of the seven defendants, all but two of whom had pleaded guilty. The
trial was prosecuted on the theory that G. Gordon Liddy, former
FBI agent and counsel for the Finance Committee To Re-Elect the
President, 3 had masterminded the break-in of the Democratic Na-
tional Committee headquarters and that no higher campaign or White
House officials were involved. Chief Judge John Sirica, the presiding
judge, never accepted this theory. His repeated questions to witnesses
and the prosecution staff indicated his disbelief that criminal involve-
ment stopped at Liddy. Courageous investigative reporters raised
similar doubts in news stories and columns. The smell of coverup was
in the air. S. Res. 60, passed after the Watergate trial concluded,
evinces the Senate’s belief that the Department of Justice could not
be trusted fully to investigate and uncover the true story of Water-
gate. But no substantial indication of the magnitude of the Watergate
affair had yet emerged.
The Senate Select Committee was given the broadest mandate to
investigate completely not only the break-in of the DNC headquarters
and any subsequent coverup, but also all other illegal, improper, or
unethical conduct occurring during the Presidential campaign of 1972,
including political espionage and campaign financing practices. All
the investigative powers at the Senate’s disposal were given the com-
mittee. Thus the committee had the power of subpena, the power to
grant limited or “use” immunity to witnesses to obtain their testi-
mony 4 and the power to enforce the committee’s subpenas by initiat-
ing contempt procedures.
On February 21, 1973, at its first organizational meeting, the com-
mittee, on the recommendation of Chairman Ervin, unanimously ap-
pointed Professor Samuel Dash as chief counsel and staff director for
the committee. Professor Dash had formerly been district attorney
in Philadelphia, an active trial lawyer and chairman of the Section
of Criminal Law of the American Bar Association. At the time of his
appointment, Mr. Dash was professor of law and director of the Insti-
tute of Criminal Law and Procedure of Georgetown University Law
Center. Shortly afterwards, Vice Chairman Baker, acting under the
provisions of S. Res. 60, appointed as minority counsel Mr. Fred
Thompson, a trial lawyer and former assistant U.S. attorney in Nash-
ville, Tenn.
During the month of March, the chief counsel selected as deputy
chief counsel Mr. Rufus Edmisten (who also served as chief counsel of
the Senate Subcommittee on Separation of Powers) and his assistant
chief counsel for the three areas of the investigation — Watergate
break-in and coverup, campaign practices, and campaign financing.
David M. Dorsen was assigned supervision of the campaign financing
phase, including investigation of the milk fund affairs. Mr. Dorsen
was especially aided in the milk fund investigation by assistant coun-
sel Alan S. Weitz. Mr. Terry Lenzner took charge of the campaign
practices phase and also headed the investigation into the Hughes-
8 Hereinafter often referred to as FCRP.
4 To grant “use” immunity is to insure a witness that his testimony, or the fruits of his
testimony, will not be used against him directly or indirectly in any subsequent criminal
procedure. See 18 U.S.C. 6002-6005.
xxva
Rebozo matter. Serving as Mr. Lenzner’s principal aides in those
investigations were assistant counsel Marc Lackritz and investigator
Scott Armstrong. Mr. James Hamilton was assigned responsibility
for the Watergate break-in and coverup phase; because of the rapid
change in events, Messrs. Dorsen and Lenzner also spent considerable
time on this phase. Mr. Hamilton, with the aid of assistant counsel
Ronald D. Rotunda, special counsel Richard B. Stewart, and a number
of expert consultants, 5 was also responsible for most of the committee’s
litigation efforts, including the preparation of the pleadings and briefs
in its suit against the President, and, with Mr. Dorsen, supervised the
investigation into the so-called Responsiveness Program. Both Mr.
Dorsen and Mr. Lenzner had been assistant TJ.S. attorneys in the
Southern District of New York, and Mr. Hamilton was a trial attor-
ney with the Washington law firm of Covington and Burling.
Mr. Carmine Bellino, former FBI agent and a veteran of numerous
important congressional investigations, was appointed chief investi-
gator. Professor Arthur Miller of George Washington Law School
was named chief consultant to the staff. Minority Counsel Fred Thomp-
son appointed as his chief assistant and investigator Donald Sanders,
a former FBI agent and chief counsel and staff director to the House
Internal Security Committee.
Appointment of other lawyers, investigators, secretarial personnel,
and research assistants followed over the next several months, bring-
1 f^l973 a P ea k strength of approximately 90 persons by August
II. INVESTIGATIVE PROCEDURES
On March 21, 1973, while the committee staff was still in its forma-
tive stages, James McCord, one of the convicted Watergate defend-
ants, began the unraveling of the Watergate story by transmitting a
sealed letter to J udge Sirica. On the morning of March 23, which had
been set by Judge Sirica for the sentencing of the Watergate defend-
ants, J udge Sirica in open court unsealed the letter and read aloud
McCord’s first accusations of perjury at the January 1973 Watergate
trial and coverup.
At 1 p.m. the same day, Mr. McCord, through his attorney, called
the Select Committee’s chief counsel and offered to give information
to the committee. The chief counsel met with Mr. McCord and his
counsel that afternoon and the following day, and Mr. McCord testi-
fied before an executive session of the full committee early the follow-
ing week. McCord’s revelations to the committee were the first indica-
tion that former Attorney General John Mitchell, Counsel to the
President John W. Dean III, and deputy director of the Committee
for the Re-Election of the President 6 Jeb Stuart Magruder had par-
ticipated in planning and discussion with G. Gordon Liddy respecting
a large-scale covert intelligence operation that ultimately resulted in
the Watergate break-in.
Although McCord had been a participant in the break-in, he had
obtained information about the planning meetings and the later pay-
6 Professor Arthur S. Miller, Professor Jerome A. Barron, Professor Donald S. Burris,
Professor Sherman Cohn, and Eugene Gressman. The committee is particularly grateful to
Professor Stewart who devoted many hours of his considerable talents to the committee’s
litigation efforts.
6 Hereinafter often referred to as CRP.
XXVHI
ments of “hush” money to purchase silence through discussions with
Liddy and others. Thus, the involvement of higher officials in Water-
gate activities could not be fully proved through McCord’s testimony,
since it was largely hearsay. Although a Senate investigating commit-
tee may receive hearsay testimony, the Select Committee decided, be-
cause of its desire to limit unfounded rumor and speculation, to employ
a higher standard of proof for the establishment of crucial facts. It
was thus decided that McCord’s testimony would not be presented in
public session unless it could be corroborated by other evidence.
Accordingly, the staff began an intensive investigation. Secretaries
to key officials at CRP, the White House and the Department of Jus-
tice, as well as other staff personnel, were questioned and their records
subpenaed and examined. Gradually, corroboration for McCord’s story
emerged. A secretary’s diary was uncovered which showed meetings in
Mr. Mitchell’s J ustice Department office on January 27 and February 4,
1972, attended by Messrs. Mitchell, Dean, Magruder, and Liddy. A
CRP staff member remembered Liddy ’s agitated search for an easel
in the CRP offices on the morning of January 27. (McCord had told
the committee that, according to Liddy, Liddy had that day made a
show-and-tell presentation respecting his intelligence plan in the At-
torney General’s office using large cards on an easel.) A secretary
recalled seeing Liddy with several large white cards wrapped in brown
paper in the CRP offices prior to the January 27 meeting. The former
FCRP treasurer, Hugh Sloan, informed the committee of Magruder’s
effort to suborn his perjury before the grand jury. Sloan also gave
evidence as to the large amounts of cash paid to Liddy with Mr. Mitch-
ell’s approval for purposes concerning which Sloan said FCRP head
Maurice Stans told him “I do not want to know and you don’t want to
know.” '
As hundreds of details were collected, it became clear that the
committee could corroborate with circumstantial evidence much of
McCord’s hearsay testimony. More importantly, in April certain of
the principals involved — Mr. Magruder and Mr. Dean — signified
their willingness to testify before the committee.
A. Use of Immunity Powers
It was then that the use of immunity powers granted the committee
became important. Magruder and Dean were being questioned by
the U.S. attorneys in preparation for their grand jury testimony.
They were targets for indictment and could not be expected to co-
operate with the committee without a grant of use immunity. The
committee voted immunity for these witnesses and others and thus se-
cured the direct testimony of persons who had participated in criminal
acts.
The staff, most of whom had been employed in April, had uncovered
by the middle of May much of the evidence it was to present during
the Watergate phase of the hearings, a result obtained by around-the-
clock efforts. Also, the members of the committee held frequent execu-
tive committee meetings to receive staff progress reports, legal opin-
ions and to vote use of subpena and immunity powers to assist the
7 2 Hearings 539.
XXIX
staff in obtaining the facts. In exercising its immunity power, the
committee weighed carefully the determinative question whether the
testimony to be gained was vital to the committee’s investigation or
would reveal the significant involvement of persons of greater rank.
The committee did not seek an immunity order for any witness who
could not meet these tests and would only provide information as to
his own involvement in the Watergate affair.
In April, the committee announced that public hearings would be-
gin May 17, 1973, on the Watergate and coverup phase of the investi-
gation. While this provided only short lead time, the committee was
deeply conscious of public concern about the true parameters of the
Watergate matter. It thus believed public hearings should start as
promptly as possible. The committee opened its hearings on May 17,
1973, and maintained its hearing schedule, which increased from 3 to
5 days a week, without interruption (except for two brief recesses)
until August 7, 1973. Thirty-seven witnesses testified during this
period, hundreds of exhibits and documents were introduced into the
record, and over 3,000 pages of testimony were transcribed. The com-
mittee’s hearings on the Watergate break-in and coverup phase con-
stituted the longest uninterrupted congressional hearings in the history
of the Congress.
B. “Satellite” Charts on Key Witnesses
While many techniques to gain evidence were used, one investiga-
tive strategy in particular was responsible for some of the staff’s most
significant results, including the discovery of the White House taping
system. In regard to each major witness, the chief counsel assigned a
team of lawyers and investigators to collect as much evidence as pos-
sible respecting this witness from secondary sources. To accomplish
this most efficiently, each team prepared what the staff came to call
a “satellite” chart for every major witness. Plotted on the chart would
be the name and position of every person who had a significant con-
tact with the witness during relevant time periods and who had been
in a position to receive pertinent information and records. One prin-
cipal witness alone had 60 satellites on his chart. Each satellite wit-
ness was interviewed by the staff and his or her records subpenaed and
examined. The now famous ITT memorandum from Charles Colson
to H. R. Haldeman was obtained from a satellite on Mr. Colson’s
chart. 8 And Mr. Butterfield, who revealed the White House taping
system, was interviewed simply because he was a satellite on Mr. Hal-
deman’s chart.
After John Dean informed the committee that he suspected that
the President had taped a conversation between them in the Oval
Office on April 15, 1973, some potentially knowledgeable witnesses were
asked whether the President did, in fact, tape conversations. When
Deputy Minority Counsel Donald Sanders asked Mr. Butterfield
whether he knew of any facts supporting Dean’s intimation that con-
versations in the President’s office were tape recorded, Butterfield
responded by informing the committee of the White House taping
system. Then, in response to an earlier question by investigator Scott
8 Exhibit 121, 8 Searings 3372-76.
XXX
Armstrong, Butterfield stated that the reconstruction of the Presi-
dent’s conversations with John Dean, which had been given the
committee by Special Counsel to the President J. Fred Buzhardt, must
have been prepared by use of the tapes of those meetings.
C. Computer Operations
Another important investigative tool was the computer of the Li-
brary of Congress whose capabilities were offered the committee short-
ly after its formation. The committee accepted this offer and developed
a computer staff to utilize this facility. To the committee’s knowledge,
this was the first time a congressional investigating committee em-
ployed a computer for the storage of information for investigative and
analytical purposes. 9
Almost all of the committee’s investigative files and records were
stored on computer tapes including documentary records, witness in-
terviews, executive sessions, public sessions, depositions in related
civil cases, the transcript of the first Watergate trial, and certain
newspaper clippings for the period from June 17, 1972, through the
investigative phase. Computer printouts on individual witnesses per-
mitted the staff to retrieve all available information respecting a given
witness. Thus discrepancies in testimony could easily be spotted and
relevant documents identified for use in examination. The computer
also proved a valuable tool for preparation of the committee’s final
report.
On the basis of its experience, the committee recommends the use
of computer technology in future congressional investigations. It also
notes that the computer staff has provided the Special Prosecutor and
the House Judiciary Committee with a complete duplicate of its com-
puter tape, and that committee’s impeachment inquiry thus had at its
disposal the Select Committee’s complete computer input.
D. Other Investigative Procedures
The committee employed a variety of procedures for obtaining facts.
Witnesses were usually interviewed informally and not under oath.
Hundreds of witnesses were interviewed either in the committee offices
in the New Senate Office Building or at various places throughout the
country. In cases where the witness was testifying under a grant of
immunity or it was otherwise important to have his or her testimony
under oath, the witness was examined in executive session. Oaths for
executive sessions were administered by a member of the committee
and verbatim transcriptions of testimony prepared.
Thousands of documents, records and other tangible evidentiary
materials were subpenaed by the committee, examined by the staff and
the committee, and stored in secure files. The committee’s investiga-
tion was aided by the fact that the staffs of the White House and
CUP frequently recorded their activities in documentary form. It
appeared to be the practice of the officials involved to circulate dupli-
cate copies of various memoranda throughout the White House and
CEP and the files of CEP were filled with duplicate copies of memo-
9 A report on the computer technology used appears In Chapter 10, infra.
XXXE
randa written by top White House officials. After the 1972 election,
CEP delivered its files to the National Archives. When the Select
Committee learned this had occurred, a subpena for these files was
issued and, over a period of months, staff investigators examined a
vast collection of documents stored at the Archives. A great number
of “confidential/eyes only” memoranda thus became available for the
committee’s inspection. A significant number of the memoranda re-
vealed during the public hearings and/or embodied in this final report
came from this source.
III. THE PUBLIC HEARINGS
The character of the committee’s hearings resulted from considerable
planning and a basic philosophy. The committee, aware of the gravity
of the national scandal it was investigating and the fact that its activi-
ties would be highly publicized, was determined to present dignified,
objective hearings. It recognized that the ultimate impact of its work
depended upon obtaining and keeping public confidence.
In part for these reasons, the committee resisted calling certain so-
called “big name” witnesses at the beginning of its hearings. The com-
mittee and staff wished to present a careful presentation of the evi-
dence, establishing a foundation for the later testimony that impli-
cated high Government and campaign officials. Early witnesses of
lesser stature that enabled the public to understand the context in
which the Watergate affair unfolded were essential. The chief counsel
and staff recommended this “building block” approach to the commit-
tee and the committee unanimously adopted it.
The committee followed a practice not typical of certain congres-
sional hearings. It refrained from calling a witness in public session
that it knew would refuse to testify on the assertion of the fifth amend-
ment privilege against self-incrimination. When a witness in executive
session claimed this constitutional right and declined to answer the
committee’s queries, the matter ended and the witness was not required
to assert his privilege in public session. This policy was instituted
upon the recommendation of the chief counsel, with which the com-
mittee agreed, on the belief that no legislative purpose would be served
by public exhibitions of witnesses who claimed their privilege.
The committee believed it was important that its public hearings be
televised. Live television coverage occurred during the first phase of
the committee’s hearings covering the Watergate break-in and the
coverup. Public Television carried, through its evening gavel-to-gavel
coverage, most of the committee’s public hearings.
The committee’s interest in televised hearings was not to obtain pub-
licity for publicity’s sake. The facts which the committee produced
dealt with the very integrity of the electoral process ; they were facts,
the committee believed, the public had a right to know. Most citizens
are not able personally to attend the working sessions of their Govern-
ment. Although thousands of people spent short periods in the Caucus
Room during the hearings, these visitors represented only a small per-
centage of the electorate. Thus, it was desirable that every citizen be
able to view the hearings, if not in the Caucus Room, then in his home
or place of business. The ability to read about the hearings in the
printed media was not sufficient. The full import of the hearings could
xxxn
only be achieved by observing the witnesses and hearing their
testimony.
It was for this reason that the committee opposed the efforts in Fed-
eral court of Special Prosecutor Cox to proscribe television and radio
coverage of the testimony of Magruder and Dean. The Special Prose-
cutor’s expressed concern was that public hearings might prejudice
future criminal trials. It was the committee’s position that they would
not, but, even if they did, it was more important in this period of
crisis and national concern that the full facts be promptly made known.
The public should not have to wait a year or more until the Watergate
trials were over to know the scope of the corruption in its Government.
The court supported the committee’s position and refused to inter-
fere with the committee’s public hearings. The committee believes that
its position has proven correct and that its public hearings awakened
the public to the perils posed by the Watergate affair to the integrity
of the electoral process and our democratic form of government.
Perhaps proof of the impact of the committee’s hearings is found
in the unprecedented public response to the firing of Special Prosecu-
tor Cox on October 20, 1973. On that weekend alone, a half million
telegrams came to the Congress. Hundreds of thousands of telegrams
flowed in during the following days. The overwhelming sentiment of
these telegrams was in opposition to the President’s action. It is
doubtful that public sentiment would have been so aroused by the
President’s action had the public not been sensitized to the issues
involved through the committee’s hearings.
The committee wishes to note, before it proceeds to present its
findings, that it has received no evidence suggesting any complicity in
wrongdoing on the part of the Kepublican National Committee or the
Democratic National Committee or their principal officers during the
Presidential campaign of 1972. 10
10 During the time covered by this investigation, the chairman of the Republican National
Committee was Senator Robert Dole and the Chairman of the Democratic National Commit-
tee was Lawrence F. O’Brien.
CHAPTER 1
The Watergate Break-in and Coverup
The Watergate drama is still unfolding. 1 Because all the facts are
not yet in, because all the Watergate criminal trials and the impeach-
ment proceeding are not concluded, and because the President has re-
fused to produce to the Select Committee many crucial tape recordings
and other evidence, this report — although it is the committee’s final
report — is incomplete. And this report is limited in another way. Be-
cause of the massive amount of evidence now available as to Water-
gate developed in the committee’s hearings and elsewhere, it is im-
possible in a document of reasonable length to deal with every fact
or every version of the facts. The committee, therefore, in preparing
this report, has exercised its judgment as to what facts are important
and which versions of disputed facts should be included. Others may
disagree with our account, but it is the committee’s mandate under
S. Res. 60 to present the Watergate affair to the public as it sees it.
I. THE WATERGATE BREAK-IN AND ITS PRELUDE
In the early morning hours of June 17, 1972, James McCord,
Bernard L. Barker, Frank Sturgis, Eugenio Martinez and Virgilio
Gonzales illegally entered the Democratic National Committee head-
quarters on the sixth floor of the Watergate Office Building. 2 Nearby,
in a room in the Watergate Hotel, Howard Hunt and G. Gordon Liddy,
the supervisors of this burglary operation, stood by keeping in walkie-
talkie communication with Alfred Baldwin who served as a lookout
across the street from the Watergate complex in the Howard Johnson
Motor Lodge. 3 The mission was ill-fated. Within a short time after
the break-in, a Washington Metropolitan Police Department plain-
clothes unit in an unmarked car responded to a call to assist a guard
at the Watergate Office Building. 4 The guard, Frank Wills, had
become suspicious when, for the second time that night, he found
masking tape on the edge of a door in the garage leading to the office
building. 5 The tape had been placed to hold back the locking mech-
anism, permitting the door to be opened without a key. 6 Earlier that
night, Wills had removed tape from the same door thinking it had
been inadvertently left by a building engineer. 7
1 This report was prepared prior to the official public release of any statements of evidence
and materials by the Judiciary Committee of the House of Representatives.
2 1 Hearings 128.
f J Hearings 158, 402 ; 9 Hearings 3688 ; Hunt executive session, Sept. 10, 1973, pp. 37—8.
4 1 Hearings 96.
s Wills interview, May 22, 1973, pp. 2-3.
6 1 Hearings 98.
7 Wills interview, May 22, 1973, pp. 1-2.
( 1 )
3S-687 0 - 74 -3
2
The plainclothes unit, under the direction of Sergeant Paul Leeper,®
entered the Watergate Office Building stairwell through the garage
door and ascended to the eighth floor. The policemen worked their way
down to the sixth floor level and entered that floor through the stair-
well door which they found unlocked by the same masking tape tech-
nique employed on the garage door. 9
Alfred Baldwin, across the street at the Howard Johnson Motor
Lodge, at first took no interest in the unmarked car which parked in
front of the Watergate Office Building and in the casually dressed
individuals who entered the building. 10 That a plainclothes police
squad in an unmarked car answered the police dispatcher’s call was
fortuitous. The call initially went out to a marked police car but that
vehicle w r as on its way to a gasoline station. The dispatcher thus re-
peated the call for any tactical unit in the vicinity of the Watergate. 11
Had the marked police car answered the call and had uniformed police-
men entered the office building, Baldwin would have immediately taken
notice and alerted the burglars who might have escaped. The true
nature of the break-in might not have been discovered and there might
have been no need for the massive coverup that followed which, when
exposed, became the most serious political scandal in the Nation’s
history.
Baldwin did not become alarmed until he noticed lights go on in
the building — first on the eighth floor, then on the sixth — and saw two
casually dressed individuals emerge on the sixth floor terrace of the
DNC headquarters, one holding a pistol. Then he radioed Hunt and
Liddy and asked “are our people in suits or are they dressed casually ?”
When the answer came back, “Our people are dressed in suits. Why ?”
Baldwin replied “You have some trouble because there are some in-
dividuals around here who are dressed casually and have got their gun
out.” Within minutes, Sergeant Leeper and his unit discovered the five
burglars and arrested them. 12 Hunt and Liddy, however, escaped un-
noticed from the Watergate Hotel. Baldwin was told by Hunt to leave
the Motor Lodge, which he promptly did. 13
Subsequently Hunt and Liddy were indicted with the five men
apprehended in the DNC headquarters ( United States v. Liddy , et _ oi.,
indictment of September 15, 1972) and Baldwin became a principal
Government witness against his former co -conspirators. All defend-
ants initially pleaded not guilty. But, as the trial opened in early
January 1973, Hunt, Barker, Sturgis, Martinez, and Gonzales changed
their pleas to guilty. 14 The remaining defendants — McCord and
Liddy — were found guilty 15 after a trial that left a number of ques-
tions which disturbed the trial judge, Congress and the American
people. The crimes of Wiretapping, burglary and conspiracy had been
proved. But, why had these crimes been committed ?. Who sponsored
them? What were the motivations? Was the break-in, as the White
House immediately claimed, merely a “third-rate burglary” ?
8 1 Hearings 95.
8 1 Hearings 103—4.
10 1 Hearings 403.
n 1 Hearings 96.
12 1 Hearings 404.
^bnited^tates v. George Gordon Liddy (D.D.C. Crim. No. 1827-72), transcript of pro-
ceedings, January 11, 15, 1973, pp. 106-129 and 357-423 (hereinafter referred to as Water-
gate trial transcript).
15 Watergate trial transcript, p. 2247.
3
This report attempts to put this crime in focus. We discuss below
the background and planning that led to the break-in as well as other
activities by the burglary team now uncovered. We then deal with the
extensive coverup that followed the apprehension of the burglars.
A. The Background or Watergate
The Watergate break-in cannot be understood unless viewed in the
context of similar White House activities. The evidence presented
below shows that, from the early days of the present administration,
the power of the President was viewed by some in the White House
as almost without limit ; especially when national or internal security
was invoked, even criminal laws were considered subordinate to Presi-
dential decision or strategy. The manifestations of this philosophy
that preceded the Watergate break-in are now discussed.
1. THE HUSTON PLAN
The earliest evidence that this concept of presidential power existed
is found in a 1970 top secret document entitled “Operational Restraints
on Intelligence Collection,” 16 and the various memorandums from
Tom Charles Huston to H. R. Haldeman which were first revealed by
J ohn Dean. 17 In preparation for his testimony before the Select Com-
mittee, Dean placed these papers, some of which bore the highest se-
curity classification, in the custody of Chief Judge John Sirica of the
U.S. District Court for the District of Columbia. This step was taken
by Dean, on the advice of counsel, to avoid violation of any Presidential
directive of Federal laws prohibiting release of Government docu-
ments affecting national security. After due consideration, Judge Si-
rica released one copy of these papers to the Department of Justice and
one copy to the Select Committee, pursuant to its motion. ( United
States v. John Doe , et al., Misc. No. 77-73, May 14, 1973.)
The committee, with the aid of various intelligence agencies, re-
viewed these documents. While the committee sealed a few items there-
in, which could involve national security considerations, it concluded
that these papers, for the most part, dealt primarily with domestic
affairs and were unrelated to national security matters. 18 The papers,
as sanitized by the committee, were entered into the committee’s record
during Dean’s testimony. 19
These papers and the President’s own statement of May 22, 1973,
disclose that the President approved the use of illegal wiretapping, il-
legal break-ins and illegal mail covers for domestic intelligence pur-
poses. The President was fully advised of the illegality of these intel-
ligence-gathering techniques prior to approving them. In the top secret
document entitled “Operational Restraints on Intelligence Collection,”
the recommendation for surreptitious entries (break-ins) contained
the following statement under the heading “Rationale”:
Use of this technique is clearly illegal. It amounts to
burglary. It is also highly risky and could result in great em-
barrassment if exposed. However, it is also the most fruitful
M Exhibit 35, 3 Bearings 1062, 1319.
17 Exhibits 36-40, 42, 3 Hearings 1062, 1324-33, 1338.
18 3 Hearings 1060, 1062.
18 Exhibits 35-41, 3 Hearings 1062, 1319-37.
4
tool and can produce the type of intelligence which cannot be
obtained in any other fashion. 20
On July 14, 1970, Haldeman sent a top secret memorandum to
Huston, notifying him of the President’s approval of the use of bur-
glaries, illegal wiretaps and illegal mail covers for domestic intelli-
gence. In the memorandum, Haldeman stated :
The recommendations you have proposed as a result of the
review, have been approved by the President. He does not,
however, want to follow the procedure you outlined on page 4
of your memorandum regarding implementation. He would
prefer that the thing simply he put into motion on the basis
of this approval. The formal official memorandum should,
of course, be prepared and that should be the device by which
to carry it out ... 21 [emphasis added]
It appears that the next day, July 15, 1970, Huston prepared a deci-
sion memorandum, based on the President’s approval, for distribution
to the Federal intelligence agencies involved in the plan — the FBI, the
CIA, the National Security Agency and the Defense Intelligence
Agency. 22 In his May 22, 1973, public statement, the President reported
that the decision memorandum was circulated to the agencies involved
on July 23, 1970. However, the decision memorandum is dated July 15,
1970, indicating that it was forwarded to the agencies on that day or
shortly thereafter. 23
Huston’s recommendations were opposed by J. Edgar Hoover,
Director of the FBI. 24 Hoover had served as the chairman of a group
comprised of the heads of the Federal intelligence agencies formed to
study the problems of intelligence-gathering and cooperation among
the various intelligence agencies. 25 In his public statement of May 22,
1973, President Nixon stated :
After reconsideration, however, prompted by the opposi-
tion of Director Hoover, the agencies were notified 5 days
later, on July 28, that the approval had been rescinded.
Haldeman’s testimony is to the same effect. 26 Dean, however, testified
that he was not aware of any recision of approval for the plan 27 and
there apparently is no written record of a recision on July 28 or any
other date. There is, however, clear evidence that, after receipt of the
decision memorandum of July 15, 1970, Mr. Hoover did present strong
objections concerning the plan to Attorney General Mitchell. 28
Huston was concerned that Hoover’s objections would interfere with
the plan’s implementation. On August 5, 1970, 8 days after the Presi-
dent states he ordered recision, Huston sent Haldeman a lengthy top
secret memorandum on the subject, “Domestic Intelligence,” which
strongly attacked Hoover’s objections and made a number of recom-
mendations concerning a forthcoming meeting regarding the plan
20 Exhibit 35. 3 Hearings 1321.
» Exhibit 36, 3 Hearings 1324.
22 New York Times, June 7, 1973, p. 36.
23 New York Times, June 7, 1973.
24 3 Hearings 916.
25 Appendix of Legal Documents at p. 628.
26 7 Hearings 2874.
27 3 Hearings 1066.
28 3 Hearings 916 ; 4 Hearings 1603.
5
among Haldeman, the Attorney General and Hoover. 29 Indicative of
the fact that the plan was still quite alive, but imperiled by Hoover, is
the following language in this memorandum :
At some point, Hoover has to be told who is President. He
has become totally unreasonable and his conduct is detri-
mental to our domestic intelligence operations . . . It is
important to remember that the entire intelligence community
knows that the President made a positive decision to go ahead
and Hoover has now succeeded in forcing a review. If he
gets his way, it is going to look like he is more powerful than
the President. He had his say in the footnotes and RN decided
against him. That should close the matter and I can’t under-
stand why the AG is a party in reopening it. All of us are
going to look damned silly in the eyes of Helms, Gayler,
Bennett, and the military chiefs if Hoover can unilaterally
reverse a Presidential decision based on a report that many
people worked their asses off to prepare and which, on the
merits, was a first-rate, objective job. 30
It should be noted that this memorandum indicates that the NS A,
DIA, CIA and the military services basically supported the Huston
recommendations.
Two days later, on August 7, 1970, Huston sent a brief, confidential
memorandum to Haldeman urging that Haldeman “meet with the
Attorney General and secure his support for the President’s decision,
that the Director (Hoover) be informed that the decision will stand,
and that all intelligence agencies are to proceed to implement them at
once.” 31 Huston noted that : “Mr. Hoover has departed for the west
coast to vacation for 3 weeks. If you wait until his return to clear up
the problems surrounding our domestic intelligence operations, we will
be into the new school year without any preparations.” 32
Later, on September 18, 1970 (almost 2 months after the President
claims the plan was rescinded) , Dean sent a top secret memorandum
to the Attorney General suggesting certain procedures to “ commence
our domestic intelligence operation as quickly as possible .” [emphasis
added] This memorandum specifically called for the creation of an
Inter-Agency Domestic Intelligence Unit which had been an integral
part of the Huston plan. Dean’s memorandum to the Attorney General
observed that Hoover was strongly opposed to the creation of such a
unit and that it was important “to bring the FBI fully on board.”
F ar from indicating that the President’s approval of Huston’s recom-
mendation to remove restraints on illegal intelligence-gathering had
been withdrawn, Dean, in his memorandum, suggested to the Attorney
I believe we agreed that it would be inappropriate to have
any blanket removal of restrictions ; rather, the most appro-
priate procedure would be to decide on the type of intelligence
we need, based on an assessment of the recommendations of
29 Exhibit 37, 3 Hearings 1325-29.
30 Exhibit 37, 3 Hearings 1326.
31 Exhibit 38, 3 Hearings 1330.
33 Ibid.
6
this unit, and then proceed to remove the restraints as neces-
sary to obtain such intelligence , 33 [emphasis added]
Dean’s memorandum indicated that the creation of the Inter-Agency
Domestic Intelligence Unit would go forward and provided recom-
mendations for the choosing of a unit director to serve as a “righthand
man” to the Attorney General and for the selection of representatives
from the various intelligence agencies who would serve on it. Dean
closed his memorandum with the suggestion that the Attorney Gen-
eral call weekly meetings to monitor problems as they emerged and “to
make certain that we are moving this program into implementation as
quickly as possible.’’' 1 34 [emphasis added] Recognizing that Hoover
was still a problem, Dean added a note to the bottom of his memoran-
dum : “Bob Haldeman has suggested to me that if you would like him
to join you in a meeting with Hoover he will be happy to do so.” 35
Hoover, however, never did come completely “on board” and the
plan for an Inter-Agency Domestic Intelligence Unit was never im-
plemented. A clue to the fate of the Huston plan is provided by the
edited, unauthenticated “Submission of Recorded Presidential Con-
versations to the Judiciary Committee of the House of Representatives
by President Richard Nixon”, on April 30, 1974, where the following
passage appears :
D. . . . what Bill Sullivan’s desire in life is, is to set up a
domestic national security intelligence system, a White House
program. He says we are deficient. He says we have never been
efficient, because Hoover lost his guts several years ago. If
you recall he and Tom Huston worked on it. Tom Huston
had your instructions to go out and do it and the whole thing
just crumbled.
P [Inaudible.] 36
Dean testified that the plan for the creation of an Inter-Agency
Domestic Intelligence Unit was the product of White House fear of
demonstrations and dissent. 37 Haldeman denied that such an atmos-
phere of fear existed in the White House. 38 In his statement before the
committee, Haldeman gave as the reason for White House interest in
improving intelligence-gathering operations the “critical proportions”
of the domestic security problem in 1970 as illustrated by “a wave of
bombings and explosions, rioting and violence, demonstrations, arson,
gun battles and other disruptive activities across the country — on col-
lege campuses primarily — but also in other areas.” 39 On this issue,
Ehrlichman’s testimony corroborates Haldeman’s. 40
The Huston recommendations themselves refer to “a major threat
to the internal security” 41 and express the belief that “the potential for
even greater violence is present and we have a positive obligation to
take every step within our power to prevent it . . . for surely drastic
violence and disorder threaten the very fabric of our society.” 42
33 Exhibit 41, 3 Searings 1335.
34 Exhibit 41, 3 Hearings 1337.
* Ibid.
36 Edited Presidential Conversations, pp. 123-4.
31 3 Hearings 916.
38 7 Hearings 2874.
33 Ibid.
40 6 Hearings 2512-13.
41 Exhibit 35, 3 Hearings 1319.
42 Exhibit 37, 3 Hearings 1327-28.
7
The committee notes that the evidence presented to Senator Mc-
Clellan’s Permanent Subcommittee on Investigations of the Senate
Committee on Government Operations, in hearings beginning in July
1970, indicates that, in the several years preceding the hearings, there
were significant increases in illegal acts of violence directed against
Government facilities and a disturbing number of such acts directed
against law enforcement officials. 43
Dean testified, however, that the White House concern was directed
not only toward violent demonstrations, but also to peaceful demon-
strations and dissent. As an illustration he said :
. . . [DJuring the late winter of 1971 . . . the President
happened to look out of the windows of the residence of the
White House and saw a lone man with a large 10-foot sign
stretched out in front of Lafayette Park. Mr. Higby called
me to his office to tell me of the President’s displeasure with
the sign in the park and told me that Mr. Haldeman said the
sign had to come down. When I came out of Mr. Higby’s office,
I ran into Mr. Dwight Chapin who said that he was going to
get some “thugs” to remove that man from Lafayette Park.
He said it would take him a few hours to get them, but they
could do the job. 44
2. THE ENEMIES LIST
The White House’s apparent concern over dissent and opposition is
reflected in an organized effort to compile a constantly updated list
of the administration’s “enemies.” The basic rationale for maintenance
of the enemies list is specified in an August 16, 1971, memorandum
prepared by Dean for Haldeman, Ehrlichman and others. 45
It reads in relevant part :
Dealing with our Political Enemies
This memorandum addresses the matter of how we can
maximize the fact of our incumbency in dealing with persons
known to be active in their opposition to our Administration.
Stated a hit more bluntly — how can we use the available
federal machinery to screw our 'political enemies.
*****
In brief, the system would work as follows :
Key members of the staff (e.g., Colson, Dent, Flanigan,
Buchanan) should be requested to inform us as to who they
feel we should be giving a hard time.
The project coordinator should then determine what sorts
of dealings these individuals have with the Federal govern-
ment and how we can best screw them {e.g., grant availability,
Federal contracts , litigation , prosecution , etc.).
generally , 24 Hearings Before the Permanent Subcommittee on Investigations, at
5313 et seq.
44 3 Hearings 917.
45 4 Hearings 1349-50.
8
The project coordinator then should have access to and the
full support of the top officials of the agency or department
in proceeding to deal with the individual.
*****
As a next step, I would recommend that we develop a small
list of names — not more than ten — as our targets for concen-
tration. Request that Lyn [Nofziger] “do a job” on them and
if he finds he is getting cut off by a department or agency,
that he inform us and we evaluate what is necessary to
proceed. . . . (emphasis added) 46
Dean’s advice to limit the list to not more than ten was not followed.
Even before this memorandum, George T. Bell circulated to Dean,
Jerry Warren and Van Shumway a sizeable “list of opponents” that
“would be useful from time to time.” 47 The list contained such com-
ments next to various names as: “A scandal would be most helpful
here;” “Positive results would stick a pin in Jackson’s white hat;”
“Has known weakness for white females;” “A real media enemy.” 48
On September 9, 1971, Colson sent the same list to Dean, with blue
check marks next to the “enemies” who were “top priority.” Colson
concluded : “. . . I think you will find this is a pretty good list. Right
on!” 49 Other exhibits indicate that the list was constantly updated
and expanded to include businessmen, actors and actresses, labor lead-
ers, reporters, Senators and Representatives, civil rights leaders, Mc-
Govern aides, leaders of peace organizations, general “anti-Nixon”
people, Democratic contributors and others. 50
Dean testified that the plan to penalize administration enemies was
considered important to Haldeman, Ehrlichman, and others. 51
Strachan testified that he believed that the Enemies List “was in exist-
ence when I arrived at the White House in [August 1970] . . . [T]he
list was maintained by Colson’s office ...” 52
White House efforts to use the Federal bureaucracy to punish its
supposed enemies are further reflected in committee exhibits 44 and
65. 53 Exhibit 44 is a memorandum and briefing paper prepared for
Haldeman for a meeting with the head of the Internal Revenue Serv-
ice (which came from John Dean’s White House file) entitled “Oppo-
nents List and Enemies Project.” 54 The memorandum is undated and
not marked other than its heading: “To accomplish: Make IRS polit-
ically responsive.” 55 Attached to this memorandum is an “ I.R.S. Talk-
ing Paper 1 ' 1 that concludes with the following:
[ Johnnie] Walters [of the IRS] must be made to know that
discreet political actions and investigations on behalf of the
Administration are a firm requirement and responsibility on
his part.
We should have direct access to Walters for action in the
sensitive areas and should not have to clear them with
Treasury.
48 Exhibit 48, 4 Hearings 1689-90.
« Exhibit 49, 4 Hearings 1693.
48 Id. at 1695-96.
19 Exhibit 49, 4 Hearings 1692.
80 Exhibits 50-65, 4 Hearings 1693-1753.
81 4 Hearings 1527.
52 Strachan executive session, July 12, 1973, p. 15.
83 4 Hearings 1682, 1753.
54 4 Hearings 1349.
65 4 Hearings 1682.
9
Dean should have access and assurance that Walters will
get the job done properly ! 56
Dean recalled that, after an article was published in Newsday on
Charles (“Bebe”) Bebozo, one of the President’s closest friends, Dean
was told that the “authors of that article should have some prob-
lems.” 57 Dean discussed this with John Caulfield, who had friends
in the IBS. (Dean was reluctant to discuss it with Walters.) Dean
recalls that the IBS did audit the newsman involved. 58
It appears other “enemies” were also subjected to IBS investigation
and audit. During the September 15, 1972, meeting with the Presi-
dent, “Dean reported on IBS investigation of Larry O’Brien,”
according to information Fred Buzhardt, Special Counsel to the
President, provided to minority counsel. 59 In a memorandum of
June 12, 1972, to Dean, Colson wrote that there should be an IBS
audit of a union official who “you should know is an all out enemy,
a McGovernite, ardently anti-Nixon . . . Please let me know if this
one can be started on at once and if there is an informer’s fee, let me
know. There is a good cause at which it can be donated.” 60
In Dean’s meeting with the President on September 15, 1972, the
President, Dean and Haldeman discussed retaliation against admin-
istration “enemies,” according to a purported transcript of this meet-
ing prepared by the House Judiciary Committee published in the
Washington Post on May 17," 1974, at pp. A 26-8. This transcript
indicates the President may have known of the enemies list. Halde-
man, at the beginning of this meeting, referred to the fact that Colson
“has gone through, you know, has worked on the list, and Dean’s
working the, the thing through IBS and, uh, in some cases, I think
. . .” The President allegedly replied, “Yeah.” Other relevant excerpts
from this September 15 meeting based on the Judiciary Committee’s
purported transcript appear below, with emphasis added :
H. [Unintelligible words] John (Dean) , he is one of the
quiet guys that gets a lot done. That was a good move, too,
bring Dean in. But its
P. Yeah.
H. It — He’ll never, he’ll never gain any ground for us. He’s
just not that kind of guy. But, he’s the kind that enables other
people to gain ground while he’s making sure that you don’t
fall through the holes.
P. Oh. You mean
H. Between times, he's doing, he's moving ruthlessly on
the investigation of McGovern people , Kennedy stuff , and all
that too. I just don’t know how much progress he’s making,
’cause I
P . The problem is that’s kind of hard to find.
H. Chuck, Chuck has gone through, you know , has worked
on the list , and Dean’s working the, the thing through IBS
and, uh, in some cases, I think, some other (unintelligible)
56 4 Hearings 1684.
57 3 Hearings 1072,
68 Ibid.
59 Exhibit 70A, 4 Hearings 1796. Dean’s reference to the use of the IRS to attack “ene-
mies is supported by a recent Federal court decision where the court found that, in the
plaintiff’s case, the White House not only attempted but was successful in corruptly
influencing the IRS. Center for Corporate Responsibility v. Shultz 368 F. Supp. 863 (D.D.C.
1973) (C.A. No. 846-73).
60 Exhibit 45, 4 Hearings 1686.
10
things. He’s — He turned out to be tougher than I thought he
would, which is what
P. Yeah.
* * * * *
P. Well, just remember all the trouble they made us on
this. We'll have a chance to get hack at them one day. How are
you doing on your other investigations ? Your — How does this
(unintelligible).
D. I’m j ust about the end of the, uh
H. What’s happened on the bug ?
P. Hard, hard to find — on the what ?
H. The bug.
* * * * *
P. Perhaps the Bureau ought to go over
H. The Bureau ought to go into Edward Bennett Williams
and let's start questioning that son-of-a-hitch. Keep him tied
up for a couple of weeks.
P. Yeah , I hope they do. They — The Bureau better get
over pretty quick and get that red box. We want it cleared
up (unintelligible).
D. That’s exactly the way I, I gave it to Gray, I, uh, uh,
*****
D. On this case. Uh, there is some bitterness between for
example, the finance committee and the political committee.
They feel that they’re taking all the heat, and, and, uh, all the
people upstairs are bad people and they’re not being recog-
nized.
P. Ridiculous.
D. It is — I mean
P. They’re all in it together.
D. That’s right.
P. They should just, uh, just hehave and, and, recognize
this, this is again , this is war. We’re getting a few shots and
it’ll be over, and we’ll give them a few shots, and it’ll be over.
Don’t worry. (Unintelligible) , and I wouldn’t want to be on
the other side right now. Would you ? I wouldn't want to he in
Edward Bennett Williams', Williams' position after this
election.
D. No. No.
P. None of these bastards.
D. He, uh, he’s done some rather unethical things that
have come to light already, which he, again, Richey has
brought to our attention.
P. Yeah?
D. He went down
H. Keep a log on all that
D. Oh, we are, indeed, we are.
P. Yeah.
H. Because afterwards that is a guy
P. We’re going to
H. That is a guy we’ve got to ruin.
D. He had, he had an ex parte
11
P. You want to remember, too, he’s an attorney for the
Washington Post.
D. I’m well aware of that.
P. I think we are going to -fix the son-of-a-bitch. Believe
me. We are going to. We've got to , because he's a bad man.
D. Absolutely.
P. He misbehaved very badly in the Hoffa matter. Our —
some pretty bad conduct, there, too, but go ahead.
D. Well, that’s uh, along the line, uh, one of the things
I’ve tried to do, is just keep notes on a lot of the people who
are emerging as
P. That’s right.
D. As less than our friends.
P. Great !
D. Because this is going to be over someday and they’re —
We shouldn’t forget the way some of them have treated us.
P. I want the most — I want the most comprehensive notes
on all those who tried to do us in. Because they didn’t have
to do it.
D. That’s right.
P. They didn’t have to do it. I mean, if the thing had been
clo — uh, they had a very close election everybody on the other
side would understand this game. But now they are doing this
quite deliberately and they are asking for it and they are go-
ing to get it. And this, this, we — we have not used the power
in this first four years, as you know.
D. That’s right.
P. We have never used it. We haven't used the Bureau and
we haven't used the Justice Department , but things are going
to change now. And they’re going to change, and, and they’re
going to get it right.
D. That’s an exciting prospect.
P. It’s got to be done. It’s the only thing to do.
* # Jfs sfs 3fe
D. Well, there has been some extensive clipping by the
counsel in this case, and I’ve gone through some of these clip-
pings and it’s just phenomenal the, uh
P. Yeah.
D. The amount of coverage this case is getting. They may
never get a fair trial, may never get a fair — I mean they’ll
never get a jury that can convict them or pull it together. And
the Post, as you know, has got a, a, a real large team that
they’ve assigned to do nothing but this, sh — , this case.
Couldn’t believe they put Maury Stans’ story about his libel
suit, which was just playing so heavily on the networks last
night, and in the evening news, they put it way back on about
page 8 of the Post.
P. Sure.
D. And didn’t even cover it as a — in total.
P. I expect that, that’s all right. We’ve (unintelligible).
H. The Post (unintelligible).
P. It's going to have its problems
H. (Unintelligible).
12
D. (Unintelligible) The networks are good with Maury
coming back 3 days in a row and (unintelligible) .
P. That’s right. The main, mam thing is The Post is going
to have damnable , damnable problems out of this one. They
have a television station.
D. That’s right, they do.
P. Does that come up too ? The point is, when does it come
up ?
D. I don’t know. But the practice of non-licensees filing on
top of licensees has certainly gotten more
P. That’s right.
D. More active in the, this area.
P. And it’s going to be God damn active here.
D. (Laughter) (Silence)
P. Well , the game has to be played awfully rough. I don’t
know, well now, you, you’ll follow through with who will over
there? Who — Timmons, or a Ford, or a (unintelligible) there
are a number of Republicans.
3. THE PLUMBEBS
In June 1971, the leak of the Pentagon Papers prompted the Presi-
dent to create a special investigations unit (later known as the Plumb-
ers) inside the White House under the direction of Egil Krogh. 61
Krogh, in turn, was directly supervised by John Ehrlichman. 62 Krogh
was soon joined by David Young and in July the unit, staffing up for
a broader role, added G. Gordon Liddy and E. Howard Hunt, both
known to the White House as persons with investigative experience. 83
Liddy was a former FBI agent 64 ; Hunt, a former CIA agent. 65
The Strategic Arms Limitation Treaty negotiations were compro-
mised by the leak of sensitive documents at the time this unit was
being formed (July 23, 1971) . This problem was included within the
Plumbers’ mission. 66 Two subsequent leaks were likewise added to
the purview of the unit’s activities: The India/USSR leak (Ted
Szulk article of August 13, 1971), and the India/PAK leak (Jack
Anderson article of December 16, 1971). 67 According to Ehrlichman,
it was felt that White House supervision of the Teak-finding unit
would “stimulate the various departments and agencies to do a better
job controlling leaks and the theft or other exposure of National se-
curity secrets from within their departments.” 68
This special investigations unit planned and carried out the bur-
glary of the office of Dr. Daniel Ellsberg’s psychiatrist, Dr. Lewis J.
Fielding. 69 While this burglary is also discussed elsewhere in
this report, 70 it is relevant here as reflective of the White House atti-
tude toward illegal intelligence-gathering. Moreover, the activities
of the Plumbers are closely related to the Watergate break-in because
6 Hearings 2603.
62 6 Hearings 2529.
63 6 Hearings 2531.
64 Hunt executive session, Sept. 14, 1973, p. 423.
65 9 Hearings 3662.
66 6 Hearings 2604.
67 David Young memorandum to the Select Committee, December 11, 1973, at p. 2.
68 6 Hearings 2529.
69 6 Hearings 2578, 2644-45, 9 Hearings 3663.
70 See Chapter II on Campaign Practices.
13
both operations were under the supervision of Hunt and Liddy 71 and
both employed as burglars certain Cuban- Americans recruited by
Hunt. 72 Two of the Hunt recruits participated in both burglaries. 73
Also, fear of revelation of the Ellsberg break-in contributed signifi-
cantly to the massive coverup following the Watergate burglary.
The committee record demonstrates that Krogh and Young, as di-
rectors of the Plumbers, recommended to Ehrlichman a covert opera-
tion to obtain Ellsbergs’ psychiatric records which were in the cus-
tody of Ellsberg’s psychiatrist, Dr. Fielding. Krogh pled guilty on
November 30, 1973, to a federal charge based on his role in that affair. 74
On the question whether Krogh and Young were acting with the ap-
proval of Ehrlichman, the Select Committee received considerable
evidence. On August 11, 1971, Young and Krogh sent a memorandum
to Ehrlichman which included the following report and recommenda-
tion :
We have received the CIA preliminary psychology study
(copy attached at Tab A) which I must say I am disappointed
in and consider very superficial. We will meet tomorrow with
the head psychiatrist, Mr. Bernard Malloy, to impress upon
him the detail and depth that we expect. We will also make
available to him some of the other information we have re-
ceived from the FBI on Ellsberg. In this connection we would
recommend that a covert operation be undertaken to exam-
ine all the medical files still held by Ellsberg’s psychoanalyst
covering the two-year period in which he was undergoing
analysis. 76
Beneath this recommendation were the words “Approve” and “Dis-
approve,” each followed by a blank space. The handwritten letter
“E” was placed in the blank space after the word “Approve” and
beneath it, also in handwriting, was the message “if done under your
assurance that it is not traceable.” 76 Ehrlichman testified that the
letter “E” and the handwriting beneath it are his. 77
Ehrlichman testified that he did not approve or have knowledge
of the break-in in advance and that his understanding of the term
“covert operation” did not include a break-in. 78 And, in the edited
Presidential transcripts for a March 27, 1973 meeting, (p. 330) Ehr-
lichman, in reference to this break-in, is quoted as saying, “Well, sir,
I didn’t know. I didn’t know what this crowd was up to until after-
wards.” However, the committee notes that the August 11 memo-
randum called for a “covert operation” to obtain medical files still
held by Ellsberg' s psychoanalyst.
Other documentary evidence is also relevant. Thus, in a memo-
randum dated August 26, 1971, from Young to Ehrlichman concerning
a plan to disparage Ellsberg by feeding selected information to a
congressional investigation, a footnote makes the following point:
In connection with issue (9) [relating to changing Ells-
berg’s image] it is important to point out that with the recent
71 1 Hearings 158 ; 9 Hearings 3683.
72 1 Hearings 357 ; Barker executive session, May 11, 1973, pp. 160-65.
73 9 Hearings 3711-12.
« Watergate Special Prosecutor Force Annual Report, May 25, 1974.
75 Exhibit 90, 6 Hearings 2644-45.
76 Exhibit 90, 6 Hearings 2546, 2644-45.
77 6 Hearings 2546.
™ 6 Hearings 2547, 2578-79.
14
article on Ellsberg’s lawyer, Boudin, we have already started
on a negative press image for Ellsberg. If the present Hunt/
Liddy Project ffl is successful , it will he absolutely essential
to have an overall game plan developed for its use in conjunc-
tion with the Congressional investigation. In this connection,
I believe that the point of Buchanan’s memorandum on at-
tacking Ellsberg through the press should be borne in mind ;
namely, that the situation being attacked is too big to be
undermined by planted leaks among the friendly press.
If there is to be any damaging of Ellsberg’s image and
those associated with him, it will therefore be necessary to
fold in the press planting with the Congressional investiga-
tion. I mentioned these points to Colson earlier this week,
and his reply was that we should just leave it to him and he
would take care of getting the information out. I believe,
however, that in order to orchestrate this whole operation we
have to be aware of precisely what Colson wants to do.
Recommendation: That you sign the memorandum to Col-
son asking him to draw up a game plan (Tab A). 79 [Em-
phasis added.]
“Tab A” was a memorandum from Ehrlichman to Charles Colson
dated August 27, 1971 (which was only several days prior to the
Ellsberg break-in) on the subject, “Hunt/Liddy Special Project #1.”
The memorandum from Ehrlichman to Colson stated :
On the assumption that the proposed undertaking by Hunt
and Liddy would be carried out and would be successful, I
would appreciate receiving from you by next Wednesday a
game plan as to how and when you believe the materials
should be used. 80
The only Hunt/Liddy special project under consideration when
these memorandums were written was the “covert operation” to obtain
Ellsberg’s medical records, and thus the only materials that would be
received if the project were successful would be those medical records.
It appears from these memorandums and Hunt’s testimony before
the committee 81 that a primary strategy of the Plumbers was to obtain
information to fuel a campaign to damage Ellsberg’s image. This
political motivation is highlighted in Young’s August 26 memoran-
dum to Ehrlichman by a bracketed note connecting Democratic Party
leadership with the Ellsberg matter, which states :
I am sending you a separate Hunt to Colson memorandum
which attempts to select the politically damaging material
involving the Democratic hierarchy. I personally believe a
good deal more material could be developed along these lines.
To begin with, we have Conein, Lansdale, Harkins, and
Xolting who could possibly be called to testify. 82
There is also a July 28, 1971, memorandum from Hunt to Colson
in which Hunt states :
I am proposing a skeletal operations plan aimed at build-
ing a file on Ellsberg that, will contain all available overt,
™ Exhibit 91, 6 Hearings 2650.
80 Exhibit 91, 6 Hearings 2651.
81 9 Hearings 3666.
82 Exhibit 91, 6 Hearings 2649.
15
covert and derogatory information. This basic tool is essen-
tial in determining how to destroy his public image and
credibility. 83
In his testimony before the committee, Hunt denied that the pri-
mary reason for the break-in was to destroy Ellsberg’s public image,
but he did admit that certain material expected to be obtained from
Dr. Fielding’s files might have been useful in discrediting Ellsberg. 84
David Young has insisted to committee staff that the thrust of the
entire psychiatric study of Ellsberg was to determine whether Ells-
berg was the kind of person capable of manipulation or whether he
was acting alone. 85 In this regard it should be noted that in the
memorandum of August 26, referred to above, Young informed
Ehrlichman :
It may well be that although Ellsberg is guilty of the
crimes with which he is charged, he did not in fact turn the
papers over to the New York Times. The Defense Depart-
ment’s analysis of the printed material may even show that
Ellsberg did not have some of the papers which the New York
Times printed.
Furthermore, the whole distribution network may be the
work of still another and even larger network. 86
Krogh, in his statement after sentencing, disavowed any continuing
belief that the Fielding operation was justified by national security.
Judge Gerhard Gesell, the trial judge for the Ellsberg break-in case,
also has rejected national security as a defense in that matter. (Order
of May 24, 1974.) The edited transcripts of Presidential conversa-
tions submitted to the House Judiciary Committee suggest that the
“national security” defense for the Ellsberg break-in may well have
been an afterthought contrived to provide protection for those
involved. 87 The following exchange is at page 336 :
E. [If Hunt talks] I would put the national security tent
over the whole operation.
P. I sure would.
On June 3, 1974, Charles W. Colson pled guilty to a charge of
obstructing justice by engaging in a scheme to prepare and obtain
derogatory information about Daniel Ellsberg and to leak such
information to certain newspapers for the purpose of publicly dis-
crediting Ellsberg. Colson admitted he engaged in this conduct to
prejudice Ellsberg in the criminal case against Ellsberg relating
to the Pentagon Papers’ incident being prosecuted by the Federal
Government. Colson had agreed with Hunt’s recommendation that
Ellsberg’s psychiatrist’s records be obtained — a recommendation that
led to the burglary of Dr. Fielding’s office by the Plumbers.
[Note: On July 12, 1974, after this report w T as prepared, Messrs.
John Ehrlichman, Gordon Liddy, Bernard Barker and Eugenio
Martinez were convicted in Federal court of conspiring to violate
88 Exhibit 150, 9 Hearings 3886.
84 9 Hearings 3674.
85 David Young memorandum, supra , p. 6.
86 Exhibit 91, 6 Hearings 2646.
87 See Edited Presidential Conversations 158, 190-91, 220-22.
16
the civil rights of Dr. Fielding by illegally entering his office. Mr.
Ehrlichman was also convicted on two counts of perjury to the
grand jury investigating this matter.]
The evidence before the committee demonstrates that, in July-
August 1971, the CIA provided technical assistance to Howard Hunt
that, among other uses, was instrumental in the break-in of Dr.
Fielding’s office. This assistance was made available after then Dep-
uty Director General Robert E. Cushman received a request for aid
from the White House and met with Hunt on July 22, 1971. According
to Cushman, CIA assistance to Hunt was terminated when Hunt’s
demands become so extravagant that Cushman refused to meet them.
Cushman testified before the committee that in July 1971 he received
a call from Ehrlichman asking for assistance for Hunt. 88 Cushman
has further testified that Ehrlichman “stated that Howard Hunt was
a bona fide employee, a consultant on security matters, and that Hunt
would come to see me and request assistance which Mr. Ehrlichman
requested that I give.” 89 Ehrlichman has denied any recollection of
this call. He has also said that “any call to the CIA is the kind of call
that I usually have little or no difficulty in remembering.” 90
CIA records, however, indicate that it was Ehrlichman who made
the July 1971 telephone call. The minutes of a meeting of top CIA
officials held several days after the telephone call show that Cushman
reported that it was made by Ehrlichman. 91 A transcript of the Cush-
man-Hunt meeting on July 22, 1971, indicates that Ehrl ichman placed
this call. 92 Also, the CI A has provided the committee with a recently
discovered transcript of the Ehrlichman to Cushman phone call pre-
pared by Cushman’s secretary. The transcript clearly shows that
Ehrlichman made the call seeking assistance for Hunt, and invoked
the President’s name in order to procure this aid. The transcript of this
conversation reveals the following statement by Ehrlichman :
Mr. Ehrlichman. I want to alert you that, an old acquaint-
ance, Howard Hunt has been asked by the President to do
some special consultant work on security problems. He may be
contacting you sometime in the future for some assistance. I
wanted you to know that he was in fact doing some things for
the President. He is a long-time acquaintance with the peo-
ple here. He may want some help on computer runs and other
things. You should consider he has pretty much carte blanche.
There is additional evidence regarding this telephone call that is
instructive. On December 16, 1972, after the Department of Justice
began its investigation of the Fielding matter, Cushman called Ehr-
lichman and stated that he was uncetrain who called him in early
88 8 Hearings 3292, 3296. „ „ , „ , ^ ^
80 Senate Appropriations Subcommittee on Defense, Testimony of General Robert Cush-
man on May 11, 1973, p. 148.
80 Senate Appropriations Subcommittee on Defense, opening statement of John Ehrlich-
man on May 31, 1973 ; reprinterl in New York Times , June 1, 1973, p. 16. Colson supports
Cushman’s Version of the story. Colson testified on June 19, 1973, before the Senate Appro-
priations Subcommittee on Defense that Ehrlichman knew Hunt would be seeking CIA
assistance. (Senate Appropriations Subcommittee on Defense, Testimony of Charles Colson
on .Tune 19, 1973, pp, 451—52, 496-97, 506-7.
81 8 Hearings 3292.
82 Exhibit 124. 8 Hearings 3385.
17
July 1971 about Hunt. 93 Ehrlichman told this to Dean who requested
that Ehrlichman ask Cushman to put this in writing. 94 But Cushman,
on January 8, 1973, sent a memorandum on the Hunt matter to Ehr-
lichman stating that the early July telephone call was probably made
by Ehrlichman, Colson or Dean. 95 Ehrlichman immediately called
Cushman to complain about the inclusion of his name. 96 Cushman,
therefore, sent Ehrlichman another memorandum regarding Hunt,
dated January 10, 1973, which stated that he could not recall who in
the White House had called him. This memorandum was later given
to Assistant U.S. Attorney Silbert, 97 These two memorandums were
written before Cushman refreshed his recollection by examining CIA
documents prior to his testimony before the Select Committee.
In late August 1971, after Hunt’s demands became excessive, Cush-
man called Ehrlichman to complain. 98 Ehrlichman said he then asked
Cushman what Hunt’s assignment was and Cushman said he did not
know. According to Ehrlichman, he (Ehrlichman) then said that he
would take responsibility for terminating the CIA’s assistance to
Hunt and if there were any “squawks or kickbacks from anyone in
the White House- to simply refer them to me.” 99 Shortly after this
telephone call, CIA assistance to Hunt was terminated.
4. PROJECT SANDWEDGE
The Committee to Re-Elect the President was gearing up for its
own political intelligence-gathering program around the same time
as the Ellsberg break-in. In. September 1971, John Dean asked Jeb
Stuart Magruder to join him for lunch with Jack Caulfield. 1 Caul-
field, a White House investigator who had conducted numerous po-
litical investigations, some with Anthony Ulasewicz, 2 wanted to sell
Magruder his political intelligence plan, “Project Sandwedge,” for
use by CEP. 3 Magruder had been organizing the campaign effort
since May 1971, having received this assignment from Mitchell and
Haldeman. 4 In essence, the Sandwedge plan proposed a private cor-
poration operating like a Republican “Intertel” 5 to serve the Presi-
dent’s campaign. 53 - In addition to normal investigative activities, the
Sandwedge plan also included the use of bagmen and other covert
intelligence-gathering operations. 6
Project Sandwedge had been proposed to the White House by
Caulfield in the spring of 1971 7 but was not favorably received by
Mitchell and Ehrlichman. 8 After the initial luncheon meeting be-
03 Cushman’s recollection was later refreshed by reference to the CIA minutes noted
above. (8 Hearings 3296.)
04 Senate Appropriations Subcommittee on Defense, Testimony of John Ehrlichman on
May 30, 1973, pp. 333-34.
05 8 Hearings 3295-96 ; Exhibit 125, 8 Hearings 3390.
96 8 Hearings 3296.
07 See Exhibit 126, 8 Hearings 3391.
98 8 Hearings 3294 ; Senate Appropriations Subcommittee on Defense, Testimony of
General Cushman on May 11. 1973, pp. 150-51.
90 Senate Appropriations Subcommittee on Defense, Testimony of John Ehriichman on
May 30, 1973, p. 239.
1 2 Hearings 786.
2 6 Hearings 2268.
3 2 Hearings 786.
4 2 Hearings 784.
5 Intertel is a private international detective agency.
5a 3 Hearings 924.
0 3 Hearings 925.
7 3 Hearings 924.
8 3 Hearings 925.
35-687 0 - 74-4
18
tween Magruder and Caulfield, the plan was again put to Mitchell —
this time for use by CRP — but he again rejected it. 9
5. THE HIEING OE G. GORDON LIDDY BY THE CAMPAIGN COMMITTEE
With Sandwedge rebuffed, Magruder and Gordon Strachan of
Haldeman’s staff asked Dean to find a lawyer to serve as CRP general
counsel who could also direct an intelligence-gathering program. 10
Magruder stated that he and Dean had, on previous occasions, dis-
cussed the need for such a program with Attorney General Mitchell. 11
The man Dean recruited was G. Gordon Liddy, 12 who moved from the
special investigations unit in the White House to CRP. 13 Magruder
testified that, when Dean sent Liddy to the Committee To Re-Elect the
President in 1971, he (Magruder) was unaware of Liddy’s activities
for the Plumbers, particularly his participation in the break-in of Dr.
Fielding’s office. 14
Dean had first asked Krogh whether David Young would be available
for the special CRP assignment. Krogh said no, but suggested Liddy 15
with the caveat that Ehrlichman must approve of the transfer; sub-
sequently, Krogh informed Dean that Ehrlichman did approve. Dean
then called Mitchell to tell him that Krogh, with Ehrlichman’s sanc-
tion, had recommended Liddy and to arrange for Mitchell to meet
Liddy. 16
Ehrlichman, however, denied in a committee staff interview that he
approved Liddy’s assignment to the CRP and has stated that he first
learned of Liddy’s CRP employment after the Watergate break-in. 17
The record shows that Mitchell (still the Attorney General) inter-
viewed Liddy on November 24, 1971, 18 and approved Liddy for his
position with CRP. 19
B. The Committee foe the Re-Election of the President and Its
Relation to the White House
Before relating the evidence regarding the planning of CRP’s
political intelligence-gathering program that ultimately resulted in
the Watergate break-in, it is important briefly to identify CRP’s close
relationship with, if not domination by, the White House. The evi-
dence accumulated by the Select Committee demonstrates that CRP
was a White House product, answerable to top White House
leadership.
It appears that H. R. Haldeman, the President’s chief of staff, was
principally responsible for organizing CRP ; J ohn Mitchell has stated
that Haldeman was the moving force. 20 In May 1971, Jeb Magruder,
then a Haldeman staff assistant, was released from his White House
position and assigned the task of building the reelection committee. 21
0 4 Hearings 1605.
10 3 Hearings 927.
11 2 Hearings 786. Mitchell, however, testified that the first time he recalled discussing
an intelligence capacity for CRP was on November 24, 1971, in a meeting with Dean and
Liddy. (4 Hearings 1608.)
12 3 Hearings 927-28.
13 2 Hearings 810 ; 3 Hearings 927-28.
14 2 Hearings 786.
15 3 Hearings 927.
16 3 Hearings 927-28.
17 Ehrlichman Interview, May 4, 1973, p. 8.
18 3 Hearings 928 ; 4 Hearings 1608.
19 5 Hearings 1924.
20 4 Hearings 1606-7.
21 2 Hearings 784.
19
With Magruder on this assignment were Harry S. Flemming, Hugh
W . Sloan, J r., Herbert Porter, Robert Odle and Hr. Robert Marik. All
but Marik were former White House aides. 22
Magruder cleared all recruitment of White House personnel for the
committee with Haldeman. 23 Although Attorney General Mitchell also
passed on the appointment of persons to important reelection commit-
tee positions, 24 Richard Kleindienst, in a meeting with the President
on April 15, 197?). characterized Mitchell’s role in the formulation
of CRP as that of “a puppet.” 25 The evidence, however, shows that
Mitchell assumed a political managerial role as to the reelection effort
as early as the spring of 1971, a year before he left his position as At-
torney General. 26 It was understood, even at that early time, that
Mitchell would take full charge of the campaign when it went into
high gear. 27 Thus, Mitchell received memorandums for his informa-
tion and approval from CRP as early as May, 1971. 28
The campaign organization eventually evolved into two entities :
1. The Committee for the Re-Election of the President, which
had the responsibility for political activity.
2. The Finance Committee for the Re-Election of the President,
the organ responsible for campaign fundraising and disburse-
ment. 29
Approximately 35 White House aides left their positions to assume
key or lower level positions at CRP or FCRP. 30 A comparison of the
CRP organization chart 31 and the AVliite House organization chart
for the period 1971-72 32 shows that most important positions in the
campaign organizations were held by former White House aides.
Magruder was the caretaker director of the campaign political arm
from May 1971 until March 1972 when Mitchell took over the duties
of campaign director. 33 To keep Haldeman informed daily of CRP
operations, Gordon Strachan, a Haldeman staff assistant, was des-
ignated as the liaison between Haldeman and Magruder. 34 On a
regular basis, Magruder provided Strachan with reports of CRP ac-
tivities and decision memorandums requiring Haldeman’s approval. 35
Robert Odle, CRP administrative assistant Under Magruder, testi-
fied that CRP memorandums went to the AVliite House in such signif-
icant numbers that there was a sample memorandum in the Staff
Manual showing the prescribed form for a memorandum from a CRP
staffer to Haldeman or other White House personnel. 36 Magruder
also sent a flow of memorandums to Mitchell for his reaction or ap-
proval. 37 Examples of memorandums to Mitchell while he was still At-
22 1 Hearings 10.
23 3 Hearings 3023.
24 1 Hearings 14 ; 4 Hearings 1606.
25 Edited Presidential Conversations, p. 741.
23 2 Hearings 785 ; 4 Hearings 1606.
27 2 H earing s. 785.
28 1 Hearings 18, 40-41.
29 1 Hearings 12. SeA^eral days prior to April 7, 1972, the effective date of the new cam-
paign fund reporting law, this entity was renamed the Finance Committee To Re-Elect the
President.
80 1 Hearings 10, 437^47.
31 Exhibit 7, 1 Hearings 19.
33 Exhibit 9, 1 Hearings 77.
33 1 Hearings 12-13 ; 2 Hearings 784.
34 8 Hearings 3024.
33 2 Hearings 785 ; 8 Hearings 3023.
38 1 Hearings 58 ; Exhibit 4, 1 Hearings 454. Moreover, Haldeman testified that there
were “twice weekly meetings in Mr. Ehrlichman’s office with the campaign committee people
and senior White House people.” (8 Hearings 3023)
87 1 Hearings 18, 40-41 ; 4 Hearings 1607.
20
torney General are exhibits Nos. 74 and 75. 3S As noted, Mitchell’s cam-
paign activity began as early as May 1971. 39 Prior to his appearance
before the Select Committee, Mitchell testified in March 1972 before
the Senate Judiciary Committee that he had “[n]o reelection campaign
responsibilities” before his resignation as Attorney General. 40
The two divisions of the campaign organization were ultimately
headed by two Cabinet Members — Mitchell became director of CRP 41
and Secretary of Commerce Maurice Stans retired to head FCRP. 42
Mr. Stans testified before the committee that, as FCRP director, he
raised approximately $60 million for the campaign. These funds were
disbursed on the basis of decisions made by a budget committee con-
sisting of key officials of CRP and FCRP. 43 These decisions were at
times reviewed by Haldeman.
After the November election, FCRP had a substantial surplus,
much of which was apparently used to defend itself in lawsuits and
to pay legal fees of former CRP and FCRP officials involved in
various Watergate-related legal matters. 44 As the Select Committee
files its final report, approximately $3.5 million in FCRP surplus is
still held by the Campaign Liquidation Trust.
On the basis of this evidence, the committee finds that the Com-
mittee for the Re-Election of the President and the Finance Commit-
tee to Re-Elect the President were, in the main, White House-staffed
and White House-controlled political organizations. It finds that they
were initially conceived and created with the purpose of assuring
White House control over the campaign funds raised by FCRP and
the campaign strategies planned and implemented by CRP.
C. The Planning of “Gemstone”
From the time G. Gordon Liddy was appointed CRP general coun-
sel in December 1971, 45 his principal efforts were devoted to develop-
ing, advocating and implementing a comprehensive political intelli-
gence-gathering program for CRP under the code name “Gemstone.” 46
The Select Committee’s knowledge of Liddy’s activities comes from
sources other than Liddy, himself, since he refused to testify, although
instructed to do so by the committee upon the conference, pursuant
to court order, of “use” immunity. 47 Liddy’s role in the Gemstone
plan was detailed to the committee through the testimonies of James
McCord, Jeb Stuart Magruder, John Dean, John Mitchell and E.
Howard Hunt. Although it is not clear from the testimony who orig-
inated the Gemstone concept, there is no dispute that it was Liddy
who, with the aid of Hunt and McCord, formulated the plan and
presented it for approval to Dean, Magruder, and Mitchell.
38 4 Hearings 1810-11.
39 2 Hearings 785 ; 4 Hearings 1606, 1653-58.
40 Hearings before the Committee on the Judiciary of the U.S. Senate on the Nomination
of Richard G. Kleindienst to be Attorney General, 92d Cong., 2d Sess., Part 2, p. 633.
41 1 Hearings 12.
42 1 Hearings 13.
43 1 Hearings 12.
44 Washington Post , March 30, 1974, p. A6.
45 2 Hearings 786.
40 1 Hearings 126-27 ; 2 Hearings 786-87 ; 9 Hearings 3751.
47 Liddy executive session. June 4, 1973.
21
1. THE MEETING OP JANUARY 2 7, 19 72
The first Gemstone plan was presented to Attorney General Mitchell
by Liddy at a meeting in Mitchell’s Justice Department office on Janu-
ary 27, 1972. Magruder and Dean were also in attendance. The plan was
a Liddy, Hunt, and McCord composite. McCord’s input was the budget
for the equipment needed to implement the electronic surveillance
aspects of the plan. 48 Hunt, still employed at the White House, aided
Liddy in formulating the plans for other intelligence-gathering opera-
tions. 49
The testimony of Mitchell, Dean, and Magruder as to this meeting
is fairly consistent concerning the nature of Liddy’s presentation and
the general contents of the plan. Liddy illustrated his presentation with
six large white posters on an easel, each one portraying a specific coded
component of the overall plan. The plan called for :
1. The use of mugging squads and kidnapping teams to deal
with leaders of anti-Nixon demonstrations ;
2. Prostitutes stationed on a yacht, wired for sound, anchored
offshore from Miami Beach during the Democratic convention;
3. Electronic surveillance and break-ins at various targets not
yet identified at the time of the meeting. The budget for the plan
was $1 million. 50
Liddy’s plan was not approved at the meeting. Dean testified that
he was surprised at Liddy’s plan and bad not known of its contents
prior to the meeting. 61 He testified that Mitchell was likewise amazed
and told Liddy to revise the plan, focusing on the problem of demon-
strations. 52 Magruder testified that he and Dean also indicated to Liddy
that the project must be redone. 53 According to Dean, Mitchell told him
privately that Liddy’s proposal was out of the question. 54
Mitchell testified that, at the January 27 meeting, he told Liddy to
“take the stuff out and burn it.” 55 However, Hunt testified that Liddy
reported that the plan had been turned down because it was too
expensive and that he (Liddy) had been instructed to redraft it. 56
McCord confirms this testimony. 57
Despite these reactions of record by those who listened to Liddy’s
plan on January 27, the fact remains that such a plan was presented
in the office of the Attorney General of the United States and that
Liddy, after the meeting, still held his position as CRP general counsel
and continued to have the responsibility of developing an intelligence-
gathering plan.
Magruder testified that he reported the details of this meeting to
Strachan in accordance with his custom of keeping Strachan advised
on important matters so he (Strachan) could report to Haldeman. 58
Strachan, however, claimed that Magruder mentioned nothing to him
regarding a CRP intelligence plan until after March 30, 1972. 59
48 1 Bearings 127-28.
49 9 Hearings 8663.
60 2 Hearings 787-88 ; 3 Hearings 929 ; 4 Hearings 1610.
51 4 Hearings 1442.
52 3 Hearings 930.
53 2 Hearings 789.
64 3 Hearings 930.
55 5 Hearings 1816.
58 9 Hearings 3734, 3767.
57 1 Hearings 145.
58 2 Hearings 789.
69 6 Hearings 2440-41.
22
2. THE FEBRUARY 4, 1972 MEETING
On February 4, 1972, the same group again met in the Attorney
General’s office and listened to Liddy present a watered-down version
of his intelligence plan. This time the plan called only for surrepti-
tious photography and electronic surveillance. 60
The budget for the new plan had been “stripped down” to $500, 000. 61
According to Magruder, Mitchell actually discussed possible targets
for the new plan including the Democratic National Committee head-
quarters in Washington and at the convention, and the headquarters
of the Democratic nominee. Also, according to Magruder, Mitchell
suggested as additional targets DNC chairman Larry O’Brien and
Las Vegas publisher Hank Greenspun, who allegedly had explosive
material damaging to Senator Muskie in his office safe. 62
Liddy’s proposal, Magruder testified, was not approved at the
February 4 meeting, but postponed for consideration at a later time. 63
Dean testified that, after arriving late for this meeting, he advised
Liddy that such discussions should not go on in front of the Attorney
General of the United States. 64 After the meeting, Dean testified, he
told Liddy that he would never again discuss the matter with him and
that, if Liddy’s plan were approved, he did not want to know. 65 Mitchell
testified that he and Dean were still aghast at Liddy’s proposal. 66
Liddy apparently left the meeting believing that the basics of his
plan were unobjectionable but that his budget was still too high. 67
Moreover, McCord testified that Liddy said Dean had stated to Liddy
that a method would have to be devised to ensure Mitchell’s deniability
regarding the operation, including the means by which the money
would be disbursed. 68 Magruder also testified that a discussion con-
cerning the Attorney General’s deniability took place at the February
4 meeting. 69 Dean testified that Liddy may have misunderstood his
statements concerning the impropriety of discussing the plan in front
of the Attorney General and believed that Dean’s only concern was
with Mitchell’s deniability, not with the appropriateness of the plan. 70
Magruder testified that once again after the meeting he reported
the event to Strachan so Haldeman could be informed. 71 This time,
Magruder testified, he sent Strachan the documents Liddy had pre-
sented at the meeting, including budget sheets 72 and told Strachan by
telephone the general content of the meeting, including the specific
proposed targets for the intelligence operation. 73 Strachan, according
to Magruder, told him that any decision made by Mitchell regarding
the bugging proposal was acceptable to the White House. 74 But
00 2 Hearings 789.
01 2 Hearings 825.
82 2 Hearings 790-91.
63 2 Hearings 791.
64 In his March 21, 1973, meeting with the President, Dean gave the President this same
account. (Edited Presidential Conversations, pp. 175-176.)
03 3 Hearings 930.
66 4 Hearings 1612.
07 9 Hearings 3767-68.
68 Democratic National Committee , et al, v. James McCord, et al (D.D.C. Civ. No. 1233-
72), deposition of James McCord, pp. 70-71, April 30, 1973. (Depositions in this case are
hereinafter cited as e.g., McCord DNC deposition.) McCord executive session, March 28,
1973, pp. 12-15.
69 Magruder executive session, June 12, 1973. pp. 79-80.
70 3 Hearings 1023.
71 2 Hearings 824-25.
72 2 Hearings 825.
73 2 Hearings 825.
74 2 Hearings 839.
23
Strachan, during his testimony, denied receiving this information from
Magruder after the February 4 meeting, and claimed he had no knowl-
edge of the Liddy plan until after March 30, 1972. 75
Dean testified that, following this meeting, he met with Haldeman
and told him about the meeting and the Liddy plan. He testified that
he expressed his own view that the plan was incredible, unnecessary
and unwise and that the White House should have nothing to do with
it. Haldeman, according to Dean, agreed and instructed him to have
no further dealings on the matter. 76
Thus, according to both Magruder’s and Dean’s testimony, Halde-
man knew about the Liddy intelligence plan after the February 4
meeting. Haldeman testified that he has no recollection of Dean’s tell-
ing him about the February 4 meeting, but was willing to accept Dean’s
version of this conversation. 77 But, on March 27, 1973, Haldeman ad-
mitted to the President that he had a meeting with Dean during which
Dean warned him about Liddy’s plan and recommended that it be
dropped. 78 Moreover, Dean informed the President of his conversation
with Haldeman, telling the President, “Bob and I have gone over that
after the fact and he recalls my coming to the office and telling him
about this crazy scheme that was being cooked up.” 79
While Dean may have felt the plan had been disapproved, Magruder
did not leave the February 4 meeting with that view since, as sub-
sequent developments show, he continued to work with Liddy on
modifying the plan and on March 30, 1972, presented it himself a
third time to Mitchell in Key Biscayne, Fla, It is also noteworthy that,
after the February 4 meeting, Liddy continued to serve as general
counsel for CEP.
8. THE COLSON PHONE CALL
There is evidence that Liddy believed he needed additional White
House assistance to get his intelligence plan approved. After the Feb-
ruary 4 meeting, and before his meeting with Mitchell in Key Biscayne
on March 30, Magruder, according to his testimony, received a call from
Charles Colson, special counsel to the President, who told him to “get
on the stick and get the Liddy project approved so we can get the in-
formation from O’Brien.” 80 Hunt testified that, after the February 4
meeting, Liddy requested an introduction to Colson and that he
brought Liddy to Colson’s office. Hunt said he sat in the rear of the
office while Liddy and Colson conversed and was not involved in their
discussion. Colson made some phone calls during the conversation. 81
Colson did not testify under oath before the committee but asserted
his fifth amendment privilege after he w T as informed lie w T as a target of
the grand jury. However, Colson had earlier submitted to a staff inter-
view. At that time Colson admitted that. Liddy and Hunt told him they
could not get anyone to listen to them and that he, therefore, called
Magruder to ask him to hear their plan. 82 Colson summarized this
meeting with Liddy and Hunt in a June 20, 1972, memorandum. Col-
73 6 Hearings 2451-52. { But see Edited Presidential Conversations, p. 146)
78 3 Hearings 930.
77 8 Hearings 3035.
78 Edited Presidential Conversations, pp. 323-24.
79 Id. at p. 962.
80 2 Hearings 835.
81 9 Hearings 3683—84.
82 Colson Interview, May 3, 1973, pp. 2-3.
24
son said Hunt and Liddy told him about elaborate proposals for secu-
rity activities which they could not get approved. Colson said he called
Magruder and urged resolution of the Hunt-Liddy proposal. He stated
in the memorandum that he declined Hunt’s offer to apprise him of
the details because it was “not necessary [and] it was of no concern
to me.” Hunt, however, testified that he did not offer to provide details
to Colson. 83
In his public testimony, Hunt testified that when they left Colson’s
office, after Colson had made the phone calls, Liddy told Hunt, “I
think I may have done us some good.” 84 Hunt also testified it was not
necessary in the March meeting to give Colson details about the Liddy
plan. He stated that in January 1972, he had informed Colson he
would be working on a special project with Liddy that would require
him to use the same Cuban-Americans he had employed in the Ells-
berg break-in and that Colson indicated he was aware of the compre-
hensive covert intelligence plan which Liddy had in preparation and
which had the approval of the White House. 85 Hunt testified, however,
that Colson was not specifically aware that the DNC headquarters
would be a target of the Gemstone plan. 86
Another witness to the Colson call to Magruder apparently was
Fred LaRue. Magruder testified that LaRue was in the room with
him when he receiyed the call 87 and Mitchell testified that LaRue told
him that he was present when Colson called. 88 LaRue, however, could
not recall being present. 89
Magruder’s description of Colson’s call, especially the reference to
a need to “get the information from O’Brien,” 90 provides some evi-
dence that Colson was doing more than simply being helpful to Liddy
and Hunt. Dean told the President in the Oval Office on March 21,
1973, that he thought Colson’s call to Magruder “helped get the thing
off the dime.” At the same time Dean also told the President that
Strachan, on Haldeman’s behalf, was pushing Magruder for intelli-
gence information and that Magruder “took that as a signal to prob-
ably go to Mitchell and to say, ‘They are pushing us like crazy for
this from the White House.’ ” 91
4. THE MARCH 3 0, 19 72 MEETING
The third and final time Liddy’s intelligence plan was presented to
Mitchell was on March 30 in Key Biscayne, Fla. Magruder testified
that he had a large number of accumulated matters, including the
Liddy plan, to submit to Mitchell for his approval. By this time,
the plan’s budget had been reduced to $250,000. 92 Prior to traveling to
Florida, Magruder testified, he sent a copy of a memorandum on the
pared down Liddy plan to Strachan for communication to Haldeman.
Magruder said this was in accordance with his practice to send key
83 Hunt executive session, July 25, 1973, pp. 99-110.
84 9 Hearings 3684.
85 9 Hearings 3674-80.
86 9 Hearings 3722. In earlier executive sessions, Hunt had not provided this information.
He gave it for the first time in the executive session of September 20, 1973 (see pp. 467-73) .
He repeated this testimony at his appearance before the committee in public session. (See
9 Hearings 3681-83.)
87 2 Hearings 794.
88 5 Hearings 1929.
89 6 Hearings 2284.
60 2 Hearings 793.
91 Edited Presidential Conversations, pp. 178-79.
92 2 Hearings 794.
25
papers for discussion with Mitchell to Ilaldeman so that Haldeman
could comment prior to his (Magruder’s) meetings with Mitchell. 93
Strachan, however, denied receiving an advance copy of this memo-
randum. 94
Magruder testified that the Lidcly memorandum was the last item
discussed in his meeting with Mitchell in Key Biscayne, and that,
although no one was enthusiastic after discussing its pros and cons,
Mitchell approved the project. 95 Magruder testified that the approved
$250,000 project called for an initial entry into the Democratic Na-
tional Committee headquarters in Washington and, at further dates
if funds were available, entries into the headquarters of the Democratic
Presidential contenders in Washington and at the convention in
Miami. 96
Mitchell, however, denied approving the Liddy plan. He said he
told Magruder “we don’t need this, I’m tired of hearing it, let’s not
discuss it any further.” 9T LaRue, who was present with Mitchell and
Magruder during the discussion of the various proposals Magruder
presented to Mitchell, testified that, when Mitchell asked him (LaRue)
what he thought of Liddy’s plan, he replied it was not worth the risk
and Mitchell said, “Well this is not something we will have to decide
on at this meeting.” BS
In a March 27, 1973 meeting between the President, Haldeman and
Ehrlichman, Haldeman reported on information CRP lawyer Paul
O’Brien had received from Magruder :
[T]he final step [in approving the Watergate break-in
plan] was when Gordon Strachan called Magruder and said
Haldeman told him to get this going. “The President wants
it done and there is to be no more arguing about it.” This,
meaning the intelligence activity, the Liddy program.
Magruder told Mitchell this, that Strachan had told him to
get it going on Haldeman’s orders on the President’s orders
and Mitchell signed off on it. He said, “OK, if they say to do
it, go ahead.” 1
(Magruder did not give information of this nature to the Select Com-
mittee in either public or executive session.) In addition, during an
April 14, 1973, meeting between the President, Haldeman and Ehrlich-
man, Ehrlichman stated that Magruder told him that Mitchell orally
approved Liddy’s third proposal, but that the approval was reluctant
and that they (Mitchell and Magruder) felt “bulldozed” into it by
Colson. 2
5. FINANCING THE OPERATION
When Magruder returned to Washington the following day, April
1, he took certain actions that indicated his belief that the plan was
approved. He told Robert Reisner, his administrative assistant, that
Liddy’s project had been approved and asked him to notify Liddy.
93 2 Hearings 794.
6 Hearings 2452.
9S 2 Hearings 794.
98 2 Hearings 795.
97 4 Hearings 1613-14,
98 6 Hearings 2281.
1 Edited Presidential Conversations, p. 321.
2 Edited Presidential Conversations, p. 585,
26
He called Strachan to tell him the project was approved and informed
Hugh Sloan, FCRP treasurer, that Liddy was authorized to draw
$250,000 during the campaign and would probably initially need a
sizable amount. 3
Liddy quickly requested $83,000 from Sloan. 4 Sloan testified that he
first checked Liddy ’s request with Magruder, who told him that it was
in order and to comply. Sloan became concerned because the $250,000
budget was to come from cash funds kept in a safe in his office that
represented cash received prior to April 7, 1972, the effective date of
the new Campaign Fund Reporting Law. Since $83,000 was “totally
out of line of anything we had ever done before,” Sloan took the matter
up with Stans, the director of FCRP. Stans told Sloan he would check
with Mitchell. After meeting with Mitchell, Stans confirmed that
Magruder had authority to make this kind of decision and that Sloan
should pay the funds to Liddy. Responding to Sloan’s concern about
the purpose of such a payment, Stans, according to Sloan, said “I do
not want to know and you don’t want to know.” 5 Although Stans dis-
puted the context in which Sloan placed the remark, he agreed that it
was “the substance of what was said.” 6 Mitchell, however, testified
that he only told Stans that Magruder had authority to pay money to
Liddy and that there was no mention of substantial funds. 7
Stans’ meeting with Mitchell to clear the cash payment occurred only
a few days after the March 30 meeting in Key Biscayne among Mit-
chell, Magruder and LaRue.
6. TRA X SMITTA I, OF INFORMATION TO STRACHAN
Magruder testified that he “completely apprised” Strachan of the
Liddy $250,000 plan, including the fact that its first target was the
Watergate I) AC headquarters. 8 In his March 13, 1973, meeting with
the President, Dean told the President that Strachan had prior knowl-
edge of the Watergate burglary. The President immediately con-
cluded : “Well, then, he probably told Bob. He may not have.” 9 Dean
assured the President that Strachan would not testify against Halde-
man. “He was judicious in what he relayed, but Strachan is as tough
as nails. He can go in and stonewall, and say, ‘I don’t know anything
about what you are talking about.’ He has already done it twice you
know, in interviews.” 10
Strachan testified that Magruder told him only that a “sophisticated
political intelligence-gathering system had been approved with a
budget of $300,000.” 11 Strachan stated that he prepared political
action memorandum #18 12 for Haldeman that relayed this informa-
tion. Strachan said that, when the memorandum was returned for
filing, Haldeman had checked the item concerning this matter, indi-
cating he had read it. 13 Haldeman, however, claimed lie did not recall
seeing such an item. 14
3 2 Hearings 795.
4 2 Hearings 539.
6 2 Hearings 539.
6 2 Hearings 727.
7 5 Hearings 1616-17.
8 2 Hearings 826.
9 Edited Presidential Conversations, p. 146.
lUd.
11 6 Hearings 2441.
12 The transcript of Strachan’s testimony on this point refers to memorandum #8, a
typographical error that should read #18. (See e.g., 6 Hearings 2459)
13 6 Hearings 2453.
14 8 Hearings 3036.
27
F our days after the March 30 meeting in Key Biscayne, Haldeman
and Mitchell met. Strachan testified he prepared a talking paper for
Haldeman for the meeting that included a section respecting CRP’s
$300,000 intelligence plan. 15 Haldeman testified he did not recall
directing Strachan to prepare this talking paper, nor did he recall
seeing such a document. Haldeman and Mitchell both testified that a
CRP intelligence plan was not discussed at the April 4 meeting. Hal-
deman testified that his meeting with Mitchell on April 4, 1972, was in
connection with a meeting with the President and Mitchell which “cov-
ered the ITT-Kleindienst hearings and a review of Mitchell’s plans for
assigning campaign responsibilities. They [his notes] indicate no dis-
cussion of intelligence.” 16
Also in April, according to Strachan, Haldeman called him into his
office and told him to inform Liddy to transfer whatever intelligence
capability Liddy had for Muskie to McGovern. Haldeman, Strachan
said, had a “particular interest in discovering what the connection
between McGovern and Senator Kennedy was.” 17 Strachan said he
made a note of the instruction, called Liddy to his office and literally
read the statement to him. 18
D. Events Leading to the Break-In
i. the m ’govern headquarters attempts
In addition to the DNC offices at Watergate and propitious targets
at the Miami convention, the Watergate conspirators hoped to bug
Senator George McGovern’s Washington campaign headquarters. 19
This target appears consistent with the instruction Liddy received
from Haldeman through Strachan in April “to transfer whatever
capability he had from Muskie to McGovern,” although bugging was
not specifically mentioned in that instruction. McCord said he was
involved in several attempts to bug McGovern’s headquarters. 20
On May 15, McCord and Tom Gregory, a student Hunt had hired to
infiltrate the McGovern campaign, walked through the McGovern
headquarters in order to acquaint McCord with the office layout. 21
Later, on the evening of May 26, McCord and Baldwin drove to the
McGovern headquarters and, through the use of walkie-talkies, ren-
dezvoused with another car occupied by Hunt, Liddy and others. The
group had planned to break into the McGovern headquarters that
evening but, because of Gregory’s absence and the continued presence
of a man standing in front of the headquarters, the mission was
canceled. 22
The Watergate conspirators also unsuccessfully attempted to bug
the McGovern headquarters on May 28. McCord had hoped that the
offices of Frank Mankiewicz and Gary Hart would be vacant so that
bugging devices could be installed. 23 But the mission this time was
aborted because persons were working late inside the headquarters,
15 6 Hearings 2454.
18 7 Hearings 2881 ; see also Exhibit 121, 8 Hearings 3372.
17 6 Hearings 2455.
18 IUd.
id ^ Hearings 185
20 McCord DNC deposition, April 30, 1973, p, 157.
21 1 Hearings 164.
22 Baldwin interview, March 30, 1973, p. 7.
28 McCord DNC deposition, April 30, 1973, pp. 157-58.
28
and Gregory, who had been instructed by Hunt to position himself
outside and report when they left, was asked by a policeman to leave
the area. 24
2. THE FIRST WATERGATE BREAK-IN
Liddy and Hunt then turned to the main target of the “Gemstone”
plan — the Democratic National Committee headquarters in the Water-
gate Office Building. They planned the break-in for the Memorial Day
weekend. Hunt alerted his Cuban-American contact in Miami, Bernard
Barker, to be prepared to bring a trained burglary team to Washing-
ton. Barker, who had performed this same type of mission for Hunt
in the Ellsberg matter, had also served under Hunt in the Bay of
Pigs operation. He was a refugee from his native Cuba and consid-
ered himself a patriot committed to the mission of freeing Cuba from
Castro.
The Cuban- Americans he recruited for Hunt’s projects were cut
from the same cloth. The motivations of Barker and his crew were
clearly stated by Baker: “. . . E. Howard Hunt, under the name of
Eduardo, represents to the Cuban people their liberation. I cannot
deny my services in the way that it was proposed to me on a matter
of national security, knowing that with my training, I had personnel
available for this type of operation. I could not deny this request at
the time.” 25
On May 10 or 12, McCord and Hunt reconnoitered the Watergate
Office Building by walking through it in the early evening after work
and, again, around 9 or 10 p.m. 26 On May 17, Martinez purchased six-
one-way tickets to Washington from Miami for Frank Carter (alias
for Barker) , J. Granada (alias for Reynaldo Pico) , Joseph di Alberto
(alias for Sturgis), Raoul Godey (alias for Gonzales), Jose Piedra
(alias for De Diego), and G. Valdes (alias for Martinez). 27 On May
22, the Miamians registered at the Manger-Hamilton Hotel in Wash-
ington and, on May 26, moved to the Watergate Hotel, where they
stayed until May 30. 28
Barker testified that he met with Hunt at the Manger-Hamilton
Hotel shortly after his arrival in Washington and Hunt explained to
him the general nature of the mission. Barker, however, did not relay
the nature of the assignment to his team until just before entry into
the DNC headquarters. 29 At that time, the different tasks of the par-
ticipants were discussed. 30
By the early morning hours of May 28, the Watergate conspirators,
after two frustrated attempts, completed their first break-in of the
DNC. 31 The entry was made late on May 27 when Gonzales picked the
lock of the ground floor door of the Watergate Office Building. 32 The
burglary team then went to the sixth floor offices of the DNC head-
quarters. McCord placed electronic bugging devices (miniature trans-
mitters) in the telephones of DNC chairman Larry O’Brien and an-
24 Watergate trial transcript, pp. 37-39, 488-90.
25 1 Hearings 365.
26 Hunt executive session. December 17, 1973, pp. 17-19.
27 Hearings before the Committee on the Judiciary of the U.S. Senate on the nomina-
tion of L. Patrick Gray III to be Director, Federal Bureau of Investigation, Feb. 28, 1973,
p. 51. (Hereinafter cited as Gray confirmation hearings.)
28 Ibid.
29 ) Hearings 377
30 McCord DNC deposition, April 30, 1973, pp. 106-8.
31 1 Hearings 156.
32 Sturgis executive session, May 15, 1973, p. 430.
29
other official, Spencer Oliver, 33 and Barker and his team photographed
papers from DNC files. 34
3. THE FRUITS OF THE FIRST BREAK-IN
After the DNC telephones were tapped, Alfred Baldwin, a former
FBI agent recruited by McCord, monitored intercepted telephone
conversations from a room in the Howard Johnson Motor Lodge
across the street from the Watergate Office Building. 35 He typed the
conversations almost verbatim and gave the logs to McCord. 36 McCord
gave the logs to Liddy who had several retyped by his secretary, Sally
Harmony. Liddy told McCord he wanted them in final form before
his discussions with Mitchell and other recipients of the logs. 37
The Gemstone project had its own stationery with the word, “Gem-
stone,” printed in large letters at the top. 38 Sally Harmony testified
she used Gemstone stationery when she retyped the telephone logs. 39
Harmony also said she saw a stack of 8" by 10" photographs of docu-
ments from the DNC headquarters held by fingers in rubber gloves. 40
Ms. Harmony testified that she began to type certain general in-
telligence memorandums for Liddy in April that led her to believe
that CRP had infiltrated the headquarters of McGovern and Muskie. 41
In keeping with the spy motif that characterized Liddy’s operations,
code names referring to information sources were used in the intelli-
gence memorandums. The three code names she could recall were
Ruby 1, Ruby 2, and Crystal. 42
Magruder testified that, after Liddy’s project was approved, he
did not hear from Liddy until after May 27 when Liddy reported the
DNC break-in and installation of the telephone tapping devices. 43
Magruder said he reported the May 27 entry to Strachan, but, at that
time, gave Strachan no further details. 44
After the May 27 DNC break-in, Magruder received from Liddy two
installments of documents embodying the fruits of the break-in. The
installments included summaries of phone conversations on Gem-
stone stationery and photographs of documents. 45 Magruder testified
he showed these Gemstone materials to Mitchell in a regular 8 :30
morning meeting with him in his office in either CRP headquarters or
his law firm, which was located in the same building. 46
According to Magruder’s testimony, Mitchell found the documents
of no use and called Liddy to his office and told him the materials he
received “were not satisfactory and it was not worth the money that
he had been paid for it.” 47 Magruder said Liddy explained there was
a technical problem with one wiretap and that one had been improperly
placed. Liddy said he would correct these matters and hopefully obtain
useful information. 48
33 1 Hearings 156—57.
34 Barker executive session, May 11, 1973, pp. 165-67 ; 1 Hearings 358.
35 1 Hearings 401.
36 1 Hearings 409—10.
37 1 Hearings 233.
38 Exhibit 16, 2 Hearings 464, 877.
30 2 Hearings 467.
40 2 Hearings 462.
41 2 Hearings 482—83.
42 2 Hearings 462. These “sources” are discussed in more detail in Chapter 2 of this report.
43 2 Hearings 796— 99.
44 2 Hearings 826.
45 2 Hearings 796-97.
48 2 Hearings 797.
47 Ibid.
48 Ibid.
30
Mitchell denied receiving any Gemstone material or informing
Liddy that he was unhappy with the intelligence information. In fact,
Mitchell testified that he did not see nor talk with Liddy between Feb-
ruary 4, 1972, and June 15, 1972. 49
However, Magruder’s administrative assistant, Bobert Eeisner, tes-
tified that several weeks prior to June 17, 1972, Magruder handed him
materials on stationery bearing the letterhead “Gemstone” for the
purpose of preparing a file for Mr. Mitchell for a meeting between
Mitchell and Magruder. 50 Eeisner also testified that, on another oc-
casion, he saw the Gemstone stationery and envelopes and “photo-
graphs or what appeared to be photographs with the stationery.” 51 Mr.
Eeisner identified committee exhibits 16 and 18, which are copies of
Gemstone stationery and the envelope for Gemstone materials, as being
the same type stationery and envelopes he saw in Magruder’s office and
used to prepare Mr. Mitchell’s file. 52 The Gemstone envelopes bore
the words “Sensitive Material” in large red capital letters and the
words “handle as code word material” in smaller letters. In the lower
left-hand corner of the envelope were printed the abbreviated words,
“Ex Dis,” followed by “No Dism.” These abbreviations apparently
stood for “Executive Distribution” and “No Dissemination.” Also
at the bottom of the Gemstone stationery were the printed words,
“Warning, this information is for intelligence purposes only. Exploita-
tion may compromise source and terminate flow of information.” 53
Magruder also testified that he showed Strachan the Gemstone docu-
ments he received from Liddy. He said that, because of their sensitive
nature, he had Strachan view them in Magruder’s office. He and
Strachan, Magruder said, agreed there was no substance to the docu-
ments. 54
Strachan denied that Magruder showed him wiretap reports or
Gemstone documents and said he never heard the term “Gemstone”
prior to June 17, 1972. 55 Haldeman stated in a staff interview that
Strachan never reported to him that he had seen a Gemstone file. 56
4. FACTORS LEADING TO THE SECOND BREAK-IN
The second Watergate break-in was apparently made to correct
the difficulty experienced with the wiretap device on Mr. O’Brien’s
telephone. Dean testified that on June 19, 1972, 2 days after the June
17 break-in, he met with Liddy who told him that the men arrested in
the DNC were his men. 57 When Dean asked Liddy why he had been in
the DNC, he told Dean that “Magruder had pushed him into doing it.
He told me that he had not wanted to do it, but Magruder had com-
plained about the fact that they were not getting good information
from a bug that they had placed in the DNC earlier. He then explained
something about the steel structure of the Watergate Office Building
that was inhibiting transmission of the bug and that they had gone
into the building to correct this problem.” 58 Dean later gave this same
49 4 Hearings 1620.
50 2 Hearings 494.
61 2 Hearings 495.
62 2 Hearings 493-97.
53 Exhibit 2, 1 Hearings 450.
64 2 Hearings 797-98.
55 6 Hearings 2451.
66 Haldeman interview, June 14, 1973, p. 3.
67 3 Hearings 933.
68 Ibid.
31
account to President Nixon on March 21, 1973. 59 But Ehrlichman, dur-
ing a meeting with the President and Haldeman on April 14, 1973, said
Magruder told him that the second DNC break-in was “Biddy's own
notion” and that “neither Mitchell nor Magruder knew that another
break-in was contemplated.” Ehrlichman said Magruder told him that
Liddy had met with Mitchell and, referencing the difficulties experi-
enced, had only said “Mr. Mitchell, I’ll take care of it.” 60 McCord
testified that Biddy had told him a second break-in was necessary be-
cause Mitchell wanted a second photographic operation and that, in
addition, “as long as that team was going in that Mr. Mitchell wanted
. . . Mr. Biddy to check . . . the malfunctioning of the second device
that was put in . . . and see what the problem was because it was one
of two things — either a malfunction of the equipment or the fact that
the installation of the device w T as in a room which was surrounded by
four walls. In other words, it was shielded and he wanted this corrected
and another device installed.” 61
In any event, it appears that the second DNC break-in in the early
morning hours of June 17 was carried out. with a sense of urgency by
Biddy and without the planning engaged in for the first successful
break-in. The urgency of the second break-in is emphasized by the fact
that the burglars decided to proceed with the operation even though
McCord found that the tape initially placed on the garage door leading
to the stairwell had been removed, making it necessary to pick the
lock again. The risk of discovery was obvious to all the break-in team,
yet, after hurried consultation with Biddy in the Watergate Hotel,
the decision was made to continue.
A second piece of tape was placed on the basement garage door, an
action that was the burglars’ undoing. For it was the Watergate guard,
Frank Wills, who had found the first piece of tape and removed it,
thinking that one of the engineers for the building had put it on the
door. When he made his rounds again and saw the door retaped, he
telephoned the police. 62
Within minutes, Sergeant Beeper’s plainclothes squad arrived at the
Watergate Office Building, searched the stairwell and entered the sixth
floor offices of the Democratic National Committee headquarters. When
Officer Barrett discovered the burglars and yelled, “Hold it ! Come
out !,” the break-in team was apprehended in the midst of setting up
photographic equipment. The next afternoon, Beeper obtained search
warrants for the rooms which the burglars had occupied. 63 There police
found $4,200 in $100 bills, all with serial numbers in sequence, more
electronic equipment, sets of blue surgical gloves, and a small notebook
containing the name, E. Howard Hunt, 64
The burglary was over, but the Watergate scandal had just begun.
II. THE COVERUP
The news of the break-in at the DNC that reached the public in
the newspapers on June 17 and 18 provided little hint of involvement
of high campaign and administration officials. For many months
56 Edited Presidential Conversations, pp. 180-81.
60 Id . at 587.
61 1 Hearings 157,
63 Wills DNC deposition, March 9, 1973, pp. 19-20, 24-25.
63 1 Hearings 107.
64 1 Hearings 107-8.
32
the facts set forth above regarding the planning and implementation
of the Gemstone plan were hidden from public view. This is because
on June 17, just hours after the burglars were arrested, a massive
coverup was begun to conceal the true facts from the Nation. This
coverup eventually encompassed destruction and secretion of docu-
ments, obstruction of official investigations, subornation of perjury
and offers of money and Executive clemency to the Watergate
defendants to secure silence.
That there was a coverup of some form can no longer be seriously
disputed since four of its participants — John Dean, Jeb Magruder,
F red LaRue, and Bart Porter — have pleaded guilty to crimes related
to it. Dean, Magruder and LaRue have admitted involvement in a
conspiracy to obstruct justice, the basis of which was their participa-
tion in coverup activities, and Porter has confessed to making false
statements to the FBI to hide the true Watergate facts.
A. White House and CRP Activity — First Three Days After the
Break-in
On the morning of June 17, Lidcly called Magruder in Los Angeles
and informed him that five men, including McCord, had been appre-
hended in the DNC headquarters. Magruder, who was on a campaign
trip with Mitchell, Fred LaRue, Robert Mardian, and Bart Porter,
repeated Liddy’s report to LaRue, who relayed it to Mitchell. 65
Magruder testified that, later in the day, Mitchell told Mardian to
have Liddy speak to Kleindienst concerning the possibility of releasing
McCord. 66 Mardian denied this, but LaRue said that Mitchell asked
someone — probably Mardian or Magruder — -to tell Liddy to contact
Kleindienst, who in turn was to contact Police Chief Jerry Wilson,
for details. 67
In any event, in the late morning hours of Saturday, June 17, Liddy,
accompanied by CRP staffer Powell Moore, went to the Burning Tree
Country Club near Washington to ask Kleindienst to arrange the
release of the five Watergate burglars. 68 Kleindienst, who had received
word of the break-in from Henry Petersen at 8 a.m., telephoned
Petersen in Liddy’s presence and ordered that the Watergate five
receive no special treatment. Kleindienst testified he then told Liddy
to leave the premises. 69
That afternoon the scene of activity shifted to CRP headquarters.
Liddy, rushing by Hugh Sloan, commented tersely: “My boys got
caught last night ; I made a mistake ; I used someone from here which
I told them I would never do ; I’m afraid I’m going to lose my job.” 70
Robert Odle later observed Liddy go to the shredding room with a pile
of documents about “a foot high.” 71
In a telephone conversation later in the day, Magruder, still in
California, directed Odle and Robert Reisner to take certain sensitive
CRP files home over the weekend. In particular, Magruder asked
them to remove the blue file containing Gemstone papers from the
65 2 Hearings 798 ; 6 Hearings 2284-85.
63 2 Hearings 798.
67 6 Hearings 2285, 2330, 2353.
08 6 Hearings 2353.
60 6 Hearings 2353 ; 9 Hearings 3561-62, 3613.
70 2 Hearings 542.
71 1 Hearings 44.
33
office. Reisner put the Gemstone blue folder file in Odle’s briefcase
for Odle to remove. 72
Meanwhile the FBI investigation of the Watergate incident had
begun. FBI agents first became aware of Hunt’s involvement during
the afternoon of June 17, when, in the course of searching the two
hotel rooms previously occupied by the arrested men, they discovered
address books with White House telephone numbers used by Hunt
and Liddy. The FBI interviewed Hunt on the evening of June 17,
but he revealed little. On that same evening, the FBI contacted Alex-
ander Butterfield of the White House staff to determine Hunt’s precise
affiliation with the White House and to inform the White House that
Hunt was possibly involved in the Watergate break-in. 73
After the disclosure of McCord’s association with CEP appeared
in the newspapers on June 18, Mitchell issued a statement from Los
Angeles: “McCord and the other four men arrested in Democratic
headquarters Saturday were not operating either in our behalf or with
our consent in the alleged bugging attempt.” He commented further
that there “is no place in our campaign or in the electoral process for
this type of activity and we will not permit it or condone it.” 74
In a telephone conversation on June 18, Magruder informed Halde-
man, then in Key Biscayne with the President, of the break-in and
McCord’s involvement. 75 Haldeman responded, Magruder said, by ask-
ing Magruder to “get back to Washington immediately . . . land! talk
with Mr. Dean and Mr. Strachan and Mr. Sloan and others on Monday
to try to find out what actually had happened and whose money it was
and so on.” 76 Haldeman confirms the phone call, but he said the con-
versation concerned a review of a press release on the break-in. 77
The next day, June 19, Ronald Ziegler, also in Key Biscayne, an-
nounced that the White House was not conducting an inquiry into the
Watergate incident. 78 He declined to comment on what he termed a
“third-rate burglary attempt.” 79 On June 20, the press reported that
Hunt’s name had been found in the address books of Barker and Mar-
tinez. 80 After first identifying Hunt as a consultant to Colson, the
White House later denied he worked for Colson.
The coverup began to take form in a number of meetings held on
June 19. Probably the most significant was an evening meeting in
Mitchell’s apartment attended by Mitchell, Magruder, LaRue, Mar-
dian, and Dean. 81 Earlier in the day, Odle had returned various files,
including the Gemstone files, to Magruder. 82 Magruder, according to
his testimony, asked the others present at the meeting what he should
do with these sensitive files. LaRue testified that Mitchell replied that
it might be a good idea if Magruder had a fire in his house. Magruder
similarly testified that those at the meeting concluded that the Gem-
stone file should be destroyed immediately. 83 Mitchell testified that
72 1 Hearings 45-49 ; 2 Hearings 495—96, 799.
73 Gray confirmation hearings, pp. 52, 114, 128.
74 Washington Post , June 19, 1972, pp. Al, A6.
75 8 Hearings 3039.
76 2 Hearings 799, 815.
77 8 Hearings 3039.
78 3 Hearings 955.
79 Washington Post, June 20, 1972, p. Al.
80 Washington Post, June 20, 1972, p. Al.
81 2 Hearings 799-800; 3 Hearings 933-35 ; 4 Hearings 1622 ; 5 Hearings 1877 ; 6 Hear-
ings 2286.
82 1 Hearings 67 ; 2 Hearings 507. On June 18, Reisner had shredded what he assumed
were copies of some papers in the files which Odle had taken home. (2 Hearings 507.)
83 2 Hearings 800.
35-687 O - 74 - R
34
there was no reference to a Gemstone file at the meeting and that he
did not suggest the destruction of any papers. 84 Dean did not remem-
ber whether the destruction of files was mentioned. 85 Mardian testified
that there was no discussion of destruction of “Gemstone files or sen-
sitive files” while he was at the meeting. 86
Dean testified that he participated in a number of other Watergate-
related meetings and conversations on June 19. On that morning, Ehr-
lichman told Dean to discover what he could about the W atergate in-
cident and, specifically, to explore Colson’s involvement. Dean imme-
diately informed Ehrlichman of a conversation he had just had with
Magruder, who had stated that “this was all Liddy’s fault.” Dean
later talked with Colson who suggested that they should meet with
Ehrlichman as soon as possible and expressed concern over the con-
tents of Hunt’s safe.
Shortly before noon, Dean and Liddy met, Liddy told Dean that the
men arrested in the break-in were “his men” and that “Magruder had
pushed him into doing it.” 87 Dean testified that, shortly after his
meeting with Liddy, Strachan came to Dean’s office and reported that,
at Haldeman’s direction, he had removed and destroyed damaging
materials from Haldeman’s files over the weekend. 88 Strachan later
confirmed this in testimony before the committee. 89 Haldeman testi-
fied he did not recall giving Strachan such instructions. 90
Dean met with Ehrlichman twice during the afternoon of J une 19.
In the first meeting, Dean testified, he told Ehrlichman everything
he had learned from Liddy, and Ehrlichman requested that Dean
keep him advised of the results of his inquiries. Dean testified he also
told Ehrlichman at this time about the earlier meetings he attended
in Mitchell’s office in late January and early February and his subse-
quent conversation with Haldeman where he expressed concern oyer
the proposed Liddy plan. 91 Ehrlichman testified he had no recollection
of receiving such a report from Dean at that time. 92 According to the
Edited Presidential Conversations, Ehrlichman made a similar state-
ment to the President. 93
Colson was present at the second meeting, during which, Dean testi-
fied, Ehrlichman instructed him to call Liddy and advise Liddy to
tell Hunt to leave the country. Dean said he did this “without even
thinking,” but later called Liddy back to retract the instruction after
he and Colson convinced Ehrlichman that such a course would be
unwise. 94 Ehrlichman, however, testified that he gave Dean no orders
to instruct Liddy to tell Hunt to leave the country. 95 The edited Presi-
dential transcripts (pp. 1022, 1179-80) indicate that Ehrlichman told
the President that he gave no such instruction.
Colson raised, at this meeting, the matter of Hunt’s safe and sug-
gested — with Ehrlichman’s concu rrence — that Dean take custody of
84 4 Hearings 1622 ; 5 Hearings 1877 ; but see 6 Hearings 2285-86. Mitchell was indicted
by the Watergate grand jury for perjury for this testimony. (Indictment of March 1, 1974,
at pp. 23-24.)
85 3 Hearings 935.
80 6 Hearings 2256-57.
87 3 Hearings 933.
88 3 Hearings 933-34.
80 6 Hearings 2442, 2490.
90 8 Hearings 3038.
01 3 Hearings 934.
02 7 Hearings 2823.
03 Edited Presidential Conversations, pp. 1022, 1179-80.
04 3 Hearings 934.
03 7 Hearings 2718-20, 2830.
35
its contents. Bruce Kehrli, the White House staff secretary, entered
the meeting and was instructed by Ehrlichman to have the safe opened
in Dean’s presence. 96 The safe was opened that evening, after Dean
had departed, by Kehrli with Fred Fielding, Dean’s assistant, in
attendance. Kehrli knew that the contents of the safe were to be
delivered to Dean. 97 Colson’s concern about Hunt’s safe apparently
derived from a comment Hunt had made to Colson’s secretary, Joan
Hall, earlier in the day. Before leaving the White House for the last
time, Hunt stopped by Colson’s office and said to Hall, “I just want
you to know that that safe is loaded.” 98
On June 19 (or possibly June 20), Dean also met with Kleindienst
and Henry Petersen in Kleindienst’s office. 99 Kleindienst testified, and
Petersen agreed, that the purpose of the meeting was “to inform
[Dean] as counsel to the President that the Department of Justice and
the FBI would be compelled and would immediately launch a full-
scale intensive, thorough investigation ...” 1 Dean also testified he
told Kliendienst earlier in the meeting, before Petersen arrived, that
he was “very concerned that this matter could lead directly to the
President,” and that if the investigation led into the White House he
suspected that the chances of reelecting the President would be se-
verely damaged.” 2 Dean also testified he informed Petersen, after
Kleindienst left, that he had no idea where “this thing” might end
but he did not think the White House could stand a wide-open investi-
gation. Dean said Petersen gave him “the impression . . . that he
realized the problems of a wide-open investigation of the White House
in an election year.” 3 Petersen recalls only some discussion about, a
general probe of the White House in an election year. He gave assur-
ances there would be no fishing expedition. 4
B. The Disposition op the Contents op Hunt’s Safe
Dean testified that, in mid-morning on June 20, GSA representa-
tives brought him several cartons containing the contents of Hunt’s
safe and, in the afternoon, he and Fielding examined these materials.
In addition to electronic equipment in a briefcase, Dean discovered
numerous memorandums to Colson regarding the Plumbers, a psycho-
logical study of Ellsberg, various materials relating to the Pentagon
Papers, a number of classified State Department cables, and a forged
cable implicating the Kennedy administration in the assassination of
South Vietnamese President Diem, Dean called David Young, who
agreed to store the classified cables in his office. 5
Subsequently, Dean testified, he met with Ehrlichman and described
for him the contents of the safe. According to Dean’s testimony,
Ehrlichman instructed Dean to shred the documents and to “deep six”
the briefcase containing the electronic equipment. Dean said that when
he asked Ehrlichman what he meant by “deep six,” Ehrlichman ex-
plained, “Well, when you cross over the bridge on your way home,
90 3 Hearings 934-35 ; 7 Hearings 2822.
07 3 Hearings 935.
98 9 Hearings 3689.
09 3 Hearings 936 ; 9 Hearings 3563, 3613-14.
1 9 Hearings 3563, 3613-14.
2 3 Hearings 936.
3 3 Hearings 937.
4 9 Hearings 3614.
6 3 Hearings 937-38 ; 7 Hearings 2826 ; 9 Hearings 3613-14.
36
just toss the briefcase into the river.” 6 Fred Fielding has testified that
Dean told him that Ehrlichman instructed Dean to “deep six” the
briefcases. 7 Ehrlichman denied to the committee that he gave such
instructions. 8 Ehrlichman also denied to the President that he
(Ehrlichman) had given a “deep six” order. 0
Dean testified he did not follow Ehrlichman’s order. 10 However,
in January 1973, Dean, in fact, did destroy certain Hunt notebooks
which had been in the safe. 11 He did not volunteer this information to
the Special Prosecutor until after he had pleaded guilty to a con-
spiracy to obstruct justice charge. Furthermore, he did not volunteer
this information when he testified publicly or privately before this
committee.
Dean testified that, on June 25 or 26, he went to Ehrlichman to ar-
gue that, because there were many witnesses to the removal of the
various items from the safe, it would be too dangerous to destroy them.
He suggested that the material be turned over to the FBI and that
sensitive documents be given directly to Patrick Gray, its Acting
Director. 12 By following this procedure, Dean said, he would be able
to testify under oath that to the best of his knowledge “everything
found in the safe had been turned over to the FBI.”
Dean retrieved the State Department cables from Young and, on
June 26 or 27, gave FBI agents all the materials from the safe except
two envelopes containing politically sensitive materials and the Hunt
notebooks. Dean told Ehrlichman what he had done on June 28 (ap-
parently not mentioning the Hunt notebooks) . Ehrlichman informed
Dean that he was meeting with Gray later that day and that Dean
should attend and bring the politically sensitive documents. 13
Dean testified that, when Gray met with Dean and Ehrlichman in
Ehrlichman’s office, Dean told Gray that the Hunt materials had been
turned over to the FBI agents with the exception of two envelopes
which he did not believe related to Watergate in any way. But, Dean
testified, he told Gray “should they leak out, they would be political
dynamite in an election year and thus should never be made public.” 14
Dean then gave the envelopes to Gray. 15
Gray testified that Dean said that these files were “political dy-
namite,” and “clearly should not see the light of day.” He testified that,
although Ehrlichman and Dean did not expressly instruct him to de-
stroy the files, “the implication of the substance and tone of their
remarks was that these two files were to be destroyed and I interpreted
this to be an order from the counsel to the President of the United
States issued in the presence of one of the two top assistants to the
President of the United States.” 16 Ehrlichman has denied that any-
one instructed Gray that the documents in the envelope should never
see the light of day. 17
a 3 Hearings 938. _
7 Fielding DNC deposition, May 15, 1973, pp. 39-40.
8 7 Hearings 2719, 2825.
9 Edited Presidential Conversations, pp. 935, 1179.
10 3 Hearings 938, 948-49. _ ____ __ _ . • .
11 Testimony of Dean in United States v. Hunt , et al., Cnm. No. 2827-72, Transcript of
November 5, i.973, at 4.
12 3 Hearings 948.
13 3 Hearings 948 ; 6 Hearings 2614.
14 3 Hearings 948-49.
15 3 Hearings 948-49 ; 6 Hearings 2614-15.
16 9 Hearings 3467.
17 6 Hearings 2614-15.
37
However, Gray, in December 1972, burned the documents at his
home in Connecticut. 18
C. White House Concern Over the Mexican and Dahlberg Checks
On the morning of June 21, 1972, Ehrlichman called Gray to in-
form him that Dean would be handling the Watergate inquiry for the
White House and that lie should deal directly with Dean on Water-
gate matters. 19 Dean and Gray met on the 21st and again on the 22nd.
During these meetings Gray informed Dean that the FBI, in the
course of investigating the $100 bills found on the burglars and in
their hotel rooms, had discovered that four Mexican checks totaling
$89,000 and a check for $25,000 from Kenneth Dahlberg, which were
originally contributed to the President’s campaign, had been deposited
in Bernard Barker’s bank account in Miami. 20
Dean testified that, about the same time, Mitchell and Stans asked
him to attempt to prevent disclosure of the Dahlberg check, which
might prove embarrassing for Dwayne Andreas, the campaign con-
tributor behind the check. Dean testified he went to see Gray on
June 22 at the request of Haldeman and Ehrlichman to discuss the
Dahlberg and Mexican checks. 21 Dean had been informed by Stans
that the checks had reached Barker’s account after Sloan turned the
checks over to Liddy for cashing. Liddy had used Barker for this
purpose. 22 The serial numbers on the $100 bills obtained from the
burglars demonstrated that this was money Barker gave Liddy when
he cashed the Mexican and Dahlberg checks. 23
D. White House Use oe the CIA To Restrict the FBI Watergate
Investigation
On June 22, Helms and Gray conversed by telephone. According
to Gray, Helms, during that conversation, assured Gray that the CIA
had nothing to do with the Watergate break-in. 24 Haldeman testified
that the next day, acting at President Nixon’s direction after meeting
with him, Haldeman and Ehrlichman called CIA Director Helms
and Deputy Director Walters to the White House for a meeting. 25
At this session, according to Helms and Walters, Haldeman asked if
there were any CIA connection with the Watergate break-in. Helms
replied there was none. Haldeman, however, suggested that an FBI
investigation in Mexico might uncover CIA operations or assets.
Helms replied that no FBI investigation of Watergate would jeopar-
dize anv CIA operations. Nevertheless, Haldeman and Ehrlichman
directed Walters to meet with Gray and tell him that any further
investigation into Mexico could endanger CIA assets there. 26
Ehrlichman contends the meeting’s only conclusion was that Walters
and Gray “would sit down together and talk through what the prob-
lem might be.” 27 Haldeman does not recall that the question of the
18 9 Hearings 3468 .
19 9 Hearings 3450 .
20 2 Hearings 577 ; 3 Hearings 942-43 ; 9 Hearings 3451 .
21 3 Hearings 942-43 ; 9 Hearings 3450 - 51 .
22 3 Hearings 942 .
23 2 Hearings 577 .
24 9 Hearings 3451 .
25 7 Hearings 2884 .
23 8 Hearings 3238-39 ; 9 Hearings 3404 - 5 .
27 6 Hearings 2557 .
38
Mexican money was raised at the meeting with Helms and Walters or
with the President earlier in the day. 28 But Haldeman testified that
he did request Walters to meet with Gray to assure that the FBI
investigation would not expose “earlier national security or CIA
activities.” 29 Ehrlichman, however, recalled the President’s concern
about “the Mexican money or the Florida bank or whatever . . .” 30
Walters and Gray met later in the afternoon. Walters told Gray he
had just talked with “senior staff members” at the White House and
then related the White House concern about the investigation into
the Mexican money. Gray assured Walters that he would abide by the
general agency agreement that the CIA and the FBI would not
expose each other’s sources. 31 A memorandum which Walters prepared
on this meeting indicates that Gray w r as concerned with how to “low
key” the Watergate investigation, 32 but Gray testified he did not mean
to imply “that the FBI investigation would be other than aggressive
and thorough” and Only wanted to “pursue this investigation without
compromising CIA assets and resources.” 33
After the meeting between Walters and Gray, Gray telephoned
Dean, who urged that the FBI not conduct any interviews that would
expose CIA sources. Gray agreed to postpone temporarily the inter-
view of Manuel Ogarrio, whose name appeared on the four Mexican
checks deposited in Barker’s account. 34
Meanwhile, General Walters, after discussions at the CIA, had con-
cluded that the ongoing FBI investigation could not jeopardize any
CIA sources or activities in Mexico. 35 On June 26, Walters was called
by Dean regarding the matters Haldeman and Ehrlichman had earlier
discussed with Walters at the White House. Walters testified that he
checked on Dean with Ehrlichman, who told him it was appropriate
to discuss these items with Dean because “he is in charge of the whole
matter.” 36
Walters met with Dean on June 26. He testified, and Dean confirmed,
that Dean pressed him about the possibility of CIA involvement in the
Watergate break-in and that he emphasized to Dean that there was no
CIA connection. He said he told Dean :
Mr. Dean, any attempt to involve the Agency in the stifling
of this affair would be a disaster. It would destroy the
credibility of the Agency with the Congress, with the Na-
tion. It would be a grave disservice to the President. I will
not be a party to it and I am prepared to resign before I do
anything that would implicate the Agency in this matter. 37
Walters testified that the following morning, June 27, he again re-
ceived a telephone call from Dean asking him to come to Dean’s
office. He said Dean told him that “some of the suspects were wobbling
and might talk” and that Dean again asked if he had discovered any
CIA involvement in the matter. Walters testified that, when he re-
28 8 Hearings 3042.
29 7 Hearings 2884.
30 6 Hearings 2568.
si 9 Hearings 3407, 3452-53.
32 Exhibit 129, 9 Hearings 3815.
33 9 Hearings 3452-53.
34 9 Hearings 3453-54.
35 9 Hearings 3408.
36 9 Hearings 3408.
37 9 Hearings 3409.
39
plied there was none, Dean asked whether there was any way the CIA
could meet the bail or pay the salaries of the defendants while they
were in jail. Walters said he informed Dean there was no way the
Agency could involve itself in this. 38 Dean testified that he first heard
discussion concerning payments to the defendants at a meeting on
June 23 or 24 with Mardian, Mitchell and LaKue where Mardian told
the group “the CIA could take care of this entire matter if they
wished.” 39
Walters testified that, on June 28, Dean called him again, asking
him to come to his office. Dean then told Walters that a scheduled
meeting between Helms and Gray had been cancelled and that Ehrlich-
man wanted Gray to deal with Walters instead. Dean asked whether
Walters could assist to limit the FBI investigation to the five defend-
ants. Walters said he had no authority in this matter and told Dean
that the CIA could become involved only at the President’s direction. 40
Dean confirmed this testimony. 41
Dean testified that his meetings with Walters were at Ehrlichman’s
express request. Dean said Ehrlichman told him to deal with Walters
because he was a good friend of the "White House, that the White
House had installed him as Deputy Director so it could have influence
over the CIA. 42
On the evening of July 5, Gray telephoned Walters and said he
would pursue the investigation in Mexico unless Helms or Walters
wrote a letter stating that the investigation would uncover CIA as-
sets or activities. 43 The next morning, Walters met with Gray. Walters
testified, “I told Mr. Gray right at the outset that I could not tell and,
even less, could I give him a letter saying that the pursuit of the FBI’s
investigation would in any way jeopardize CIA activities in Mexico.” 44
It was at this meeting, Gray testified, that he first suspected that some-
one might be trying to interfere with his investigation. 45
After Walters left Gray’s office, Gray called Clark MacGregor in
San Clemente and expressed the opinion that “people on the White
House staff are careless and indifferent in their use of the CIA and
FBI.” 46 Gray asked MacGregor to inform President Nixon of his
problem. Thirty-seven minutes later the President telephoned Gray.
Gray testified that he said to the President : 47
Mr. President, there is something that I want to speak to
you about.
Dick Walters and I feel that people on your staff are try-
ing to mortally wound you by using the CIA and FBI and by
confusing the question of CIA interest in, or not in, people
the FBI wishes to interview.
Gray testified that after a “slight pause,” the President said :
Pat, you just continue to conduct your aggressive and
thorough investigation.
38 9 Hearings. 3410 .
39 3 Hearings 945 - 46 .
40 9 Hearings 3411 - 12 .
41 3 Hearings 947 - 48 .
42 3 Hearings 946 .
43 9 Hearings 3413 , 3457 .
44 9 Hearings 3413 .
45 9 Hearings 3523 .
46 9 Hearings 3462 .
47 IUd.
40
Gray testified he believed his message to the President was “ade-
quate to put him on notice that the members of the White House staff
were using the FBI and the CIA.” 48 However, in his May 22, 1973,
statement, the President maintained that, despite his July 6 conversa-
tion with Gray, he was not aware of “efforts to limit the investigation
or to conceal possible involvement of members of the administration
and the campaign committee.” 49 The President did not ask Gray what
people on the staff were trying to use the CIA and FBI ; he did not
indicate that the charges were serious or that he would suspend or
fire those involved. Gray testified :
Frankly, I expected the President to ask me some questions
and for two weeks thereafter, I think it was on the 12th and
again, the 28th, I asked General Walters if the President had
called him. And when I heard nothing, you know, I began to
feel that General Walters and I were alarmists . . . 50
In his May 22, 1973 statement, the President admitted directing
Haldeman and Ehrlichman to take steps to ensure that the FBI
Watergate investigation not expose “an unrelated covert operation’
of the CIA.” 51 The President also conceded in his May 22 statement
that he had directed Haldeman and Ehrlichman to restrict the FBI
Watergate investigation to prevent the exposure of the activities of
the Plumbers. As is shown later in this report, the payoffs and prom-
ises made to Howard Hunt appear to have been largely motivated
by a fear of Hunt’s revelation of his activities for the Plumbers.
E. Mardian -La B uk -Liddy Meeting
On June 20 or 21, 1972, Liddy, Mardian and LaRue met in LaRue’s
apartment to allow Liddy to give a firsthand report of the Watergate
operation. 52 Liddy told Mardian and LaRue that he had employed
the five men arrested at the DNC, that he and Hunt had organized the
operation, that they had occupied a room in the Watergate Hotel dur-
ing the break-in and that he had shredded documents from his files
that related to the break-in. 53 Liddy assured LaRue and Mardian that
the operation could not be traced to him, but that, if an investigation
did implicate him, he would never reveal any information. He stated
that he was even willing to be assassinated “on any street corner at
any time” if LaRue and Mardian were not satisfied with his assur-
ances. 54 Mardian testified 55 that Liddy conveyed the impression that
he conducted the break-in “on the express authority of the President”
with CIA assistance. According to Mardian, Liddy said Hunt felt it
was CRP’s obligation to provide bail money, legal fees and family
support. 56
LaRue testified that Liddy did not discuss who had approved the
Watergate operation, although he did mention that Magruder had
been pressuring him to improve the surveillance equipment in the DNC
45 9 Hearings 3498. . _ _ , ,
49 Presidential press statement, May 22, 1973 ; see Appendix of Legal Documents at 633.
60 9 Hearings 3498.
B1 See Appendix of Legal Documents at p. 632.
52 6 Hearings 2286-87, 2357.
53 6 Hearings 2286-87, 2309, 2362.
64 6 Hearings 2288, 2362.
56 6 Hearings 2359.
68 6 Hearings 2358.
41
offices. 57 During this meeting, LaRue first became aware of financial
commitments to the Watergate defendants for bail, attorneys’ fees and
family support. 58
On the same day, LaRue and Mardian briefed Mitchell on Liddy’s
report. According to Mitchell, he then learned, for the first time, of
Liddy’s involvement in the Watergate burglary, “the Ellsberg matter
. . . the Dita Beard matter, and a few of the other little gems.” 59 Re-
ferring to these other scandals as “White House horrors,” Mitchell
testified that, in his opinion, their exposure would have been more
destructive to the reelection campaign than the Watergate break-in,
and that, therefore, he had participated in activities to conceal these
matters from the public during the campaign. 60
F. Pressures on Hugh Sloan
On June 22, 1972, FCRP treasurer Hugh Sloan and Magruder met
in Magruder’s office prior to Sloan’s being interviewed by FBI agents
later in the day. Magruder suggested the total amount Sloan had dis-
bursed to Liddy was approximately $75,000-$80,000. When Sloan pro-
tested that this figure was far too low and that he had no intention of
perjuring himself, Magruder, according to Sloan’s testimony, replied,
“You may have to.” 61
On the same day, Sloan testified, he was questioned by LaRue con-
cerning a $50,000 cash contribution delivered to Sloan by Herbert Por-
ter after April 7, 1972. Sloan confirmed to LaRue that he had received
this cash, which was then still in his safe because Porter had never
identified its source.
Sloan testified that, when he expressed his concerns regarding the
large expenditures of money to Mitchell, Mitchell’s only response
was : “When the going gets tough, the tough get going.’’ 62 Sloan testi-
fied that he did not understand what Mitchell meant and found his
remark of no assistance. 63 Magruder confirms Sloan’s recollection of
Mitchell’s response to Sloan’s expressions of concern. 64
The FBI interview of Sloan was confined to the identification of
Alfred Baldwin and his employment at CRP. After this interview,
Sloan testified, LaRue sought a briefing on the FBI’s questions and
emphasized to Sloan the importance of giving a low figure for “the
Liddy money” because it was “very political [ly] sensitive.” 65
Sloan was becoming very concerned and thought he should talk to
top "White House officials about the troublesome CRP financial trans-
actions. He arranged an appointment with Ehrlichman on June 23.
Prior to that meeting, Sloan testified, he stopped by Dwight Chapin’s
office, expressed his concerns, and was told by Chapin that he was only
overwrought and needed a vacation. 66
Sloan testified that, when he met with Ehrlichman, he did not “point
fingers.” He did not mention his conversation with Magruder, but told
w 6 Hearings 2288-89, 2304.
68 6 Hearings 2307.
59 4 Hearings 1621-22 ; see also 6 Hearings 2318, 2362-63.
00 4 Hearings 1625-26.
81 2 Hearings 543 ; see also 2 Hearings 800-1.
02 2 /Hearings 544.
03 2 Hearings 544, 809.
64 2 Hearings 809.
05 2 Hearings 544.
00 '2 Hearings 544-45.
42
Ehrlichman he believed that somebody “external to the campaign”
should look at the cash disbursements since the entire campaign might
be in danger. According to Sloan, Ehrlichman’s initial response was
to interpret Sloan’s statement as a personal problem. Ehrlichman said
he would be glad to help Sloan obtain a lawyer, but then, Sloan testi-
fied, Ehrlichman said, “Do not tell me any details ; I do not want to
know; my position would have to be until after the election that I
would have to take executive privilege.” 67 Ehrlichman generally con-
curred in Sloan’s testimony. 68
On June 23, Sloan made a final report to Stans on cash disburse-
ments of pre- April 7 contributions. This report showed cash disburse-
ments totaling $1,777,000. Of this amount, Liddy had received $199,000.
Other cash disbursements of significance were $250,000 to Kalmbach,
$350,000 to Strachan, $100,000 to Porter, and $20,000 to Magruder. As
of the final report to Stans, there was a balance of $81,000 in cash
remaining. 69
According to Sloan, Stans, fearing a GAO audit, told Sloan to take
approximately $40,000 of the remaining $81,000 home with him. 70
Sloan understood that Stans would take a similar amount with him.
However, Sloan said that Stans later told him he never removed the
money from the office. 71 On June 23, at Herbert Kalmbach’s sug-
gestion, Sloan destroyed the cash book he had used to prepare the
report for Stans. 72 Stans later gave his $40,000 to LaRue either di-
rectly or through Mardian. Sloan gave his $40,000 to LaRue about
July 5, 1972, after receiving a telephone call from LaRue asking for
the money. 78
Around June 24, according to Magruder, Mitchell and Magruder
requested that Stans “try to work with Mr. Sloan to see if Mr. Sloan
could be more cooperative about what had happened with the
money.” 74 Sloan testified that he met with Mardian and gave him a
full report on the cash disbursements from the pre- April 7 contribu-
tions. Sloan recalls that when Mardian learned about the $199,000 to
Liddy he exploded, saying, “Magruder lied to John Mitchell. He told
him it was only $40,000.” 75 Maridan’s account is basically consistent
with Sloan’s. 76
On July 5, after Sloan had returned from a Bermuda vacation,
Magruder asked him to have a drink at the Black Horse Tavern. Dur-
ing this meeting Magruder suggested that they visit 17. S. Attorney
Harold Titus. Magruder said he would tell Titus he authorized the
payments to Liddy and that Sloan should merely confirm he made
distributions under Magruder’s instructions. However, according to
Sloan, Magruder said that they had to agree on a figure. The figure
mentioned this time by Magruder, $40,000-$45,000, was even lower
than the figure Magruder suggested earlier. Sloan testified he told
Magruder he would think about the request. 77 But when Sloan met
Magruder again on the morning of July 6, he told Magruder he would
07 2 Hearings 545 - 46 .
68 7 Hearings 2699 .
09 2 Hearings 535 - 40 , 546 , 750 - 51 , 891 .
70 2 Hearings 546 - 47 .
71 Ibid.
72 2 Hearings 572 .
73 2 Hearings 548 , 702 .
74 2 Hearings 809 .
76 2 Hearings 547 .
70 6 Hearings 2363 .
77 2 Hearings 548 .
43
not perjure himself. Sloan said Magruder dropped the subject and
never again suggested seeing Titus. According to Sloan, LaRue
checked with him later that day to ascertain whether he had agreed
on a figure with Magruder, but, when Sloan informed LaRue what he
told Magruder, LaRue discontinued the conversation. 78
On July 6, Sloan testified, he met with Kenneth Parkinson and
Paul O’Brien, attorneys for CRP, during their debriefing of Mrs.
J udy Hoback, Sloan’s bookkeeper, following her testimony before the
grand jury. Robert Odle was also present at the beginning of the
meeting. Sloan testified he asked everyone to leave the room except the
attorneys because he wanted to talk to them alone. 79 Sloan then gave
O’Brien and Parkinson a complete accounting of the cash disburse-
ments and also informed them of Magruder’s efforts to have Sloan
alter his story. Sloan testified that O’Brien and Parkinson became
angry and said, “Well, we have been lied to by the people here. We
have not even been able to see John Mitchell, and we are a month in
this thing.” 80
Sloan said the attorneys remarked that, with the new information
they had available to them, they needed time to confront other cam-
paign officials and suggested that Sloan leave town if he had any
legitimate business reason to do so. Mr. Stans at that time was on a
trip on the west coast and the attorneys suggested that Sloan join him.
Stans, during his testimony, recalled that Mardian recommended that
Sloan join him in California. 81 That evening, Sloan received a tele-
phone call from LaRue in which LaRue impressed on him the urgency
of his departure to California. LaRue suggested he take a 6 a.m.
flight from Dulles Airport the next morning. Sloan followed this rec-
ommendation. 82
Sloan returned from California on July 12 and met with LaRue
the next day. Sloan said LaRue began by reviewing the options open
to Sloan. He suggested that Sloan might have campaign law problems
and might consider taking the fifth amendment with regard to any
testimony before the grand jury. Sloan remarked to LaRue that it
appeared obvious to him that the only way for him to stay in favor
with the campaign organization was either to commit perjury or plead
the fifth amendment, but that he would do neither. He told LaRue it
would probably be in the interest of all concerned if he resigned. 83
LaRue did not challenge Sloan’s assessment of the situation and
suggested that he talk to Stans. Sloan called Stans that evening; Stans
told him not to talk on the telephone but to come to see him the fol-
lowing morning. When Sloan met Stans the next morning, July 14,
Stans told him that he had already informed the FBI that Sloan
had resigned. Although Sloan had not yet resigned, he did so im-
mediately. 84 Stans confirmed the call, stating that, Sloan wanted to
talk about his resignation. 85
On the same day, Sloan retained a lawyer and on July 20 he and
his attorney met with Messrs. Silbert, Glanzer and Campbell of the
78 2 Hearings 549 .
78 Ibid.
80 2 Hearings 550 .
81 2 Hearings 776 .
82 2 Hearings 550 .
83 2 Hearings 550 - 51 .
84 2 Hearings 551 - 52 .
85 2 Hearings 778 .
44
U.S. Attorney’s Office and gave them a complete statement, including
Sloan’s account of Magruder’s effort to suborn his perjury . 86
G. Magruder and Porter Perjury
Mitchell resigned his position as campaign director on June 30, 1972,
but Magruder was retained as deputy director. 87 Dean testified that
during the last 10 days of June he attended a meeting in Haldeman’s
office where Haldeman and Ehrlichman asked Dean for his recommen-
dation on removing Mitchell and Magruder from the reelection com-
mittee. Dean said he told them there was a real chance Magruder
would be indicted and thus should be removed in a graceful way that
would not jeopardize his position. 88 Dean was therefore surprised when
it was publicly announced that Mitchell was resigning but that Ma-
gruder would remain. He said it was clear to him that Magruder was
the link to the White House and that he might not hold his tongue if
indicted. Dean testified that he specifically warned Haldeman about
this possibility. 89
Thereafter, Dean testified, Haldeman and Ehrlichman displayed
a greatly increased interest in Magruder’s problem. Dean testified
he kept them informed on the strategy being developed to create the
appearance that involvement in the break-in stopped at Liddy.
Haldeman and Ehrlichman, according to Dean, frequently asked him
how Magruder was progressing with the FBI investigation and his
preparation for the grand jury. Dean said he also received calls
concerning Magruder’s status from Larry Higby, Haldeman’s staff
assistant. 90 Ehrlichman, however, denies he used Dean as a liaison
man to keep informed about Magruder. 91
Magruder testified, and Mitchell confirmed, that he (Magruder)
volunteered to develop a coverup story that would conceal his in-
volvement and leave Liddy as the top figure in the Watergate con-
spiracy. 92 He said it was important that involvement be stopped at
Liddy, since “if it got to me, it would go higher.” 93
The coverup story, Magruder testified, was developed during a series
of meetings from the time of the break-in until his second grand jury
appearance, most of which were in Mitchell’s office. Attending the
meetings were Mitchell, LaRue, Mardian, Dean and himself. 94 At some
point prior to his second grand jury appearance on August 18, 1972, a
rationale was developed to justify Liddy ’s expenditure of almost
$200,000. Magruder testified that the story invented involved exag-
gerating “to the tune of $230,000” the amount of money spent on cer-
tain legitimate activities for which Liddy was responsible. 95 Magruder
said that Porter was willing to help on the coverup story, “so he took
care of, in effect, $100,000 and I took care of, in effect, $150,000 by
indicating that Mr. Liddv had legal projects for us in the intelligence
field.” Magruder worked on this story with Mitchell, Dean, LaRue
86 2 Hearings 552,
97 5 Hearings 1885.
88 3 Hearings 951.
89 3 Hearings 951-52.
90 3 Hearings 952.
91 7 Hearings 2845,
92 2 Hearings 802 ; 4 Hearings 1625-26.
93 2 Hearings 802.
94 3 Hearings 951—52 ; 4 Hearings 1624.
95 2 Hearings 801-2.
45
and Mardian. “My primary contacts on the story were Mr. Dean and
Mr. Mitchell,” Magruder told the committee. 96 Dean agrees. 97
Ehrlichman, during a meeting with the President and Haldeman on
April 14, 1973, stated that Mitchell had admitted being present when
Dean helped Magruder prepare false testimony for the grand jury. 98
Porter testified he agreed to join in the false coverup story when
Magruder swore to him that neither Magruder nor anyone higher than
Liddy in the campaign or the White House had any involvement
in the Watergate break-in. Porter said Magruder told him the prob-
lem was with the amount of money spent, that Liddy was authorized
to spend the money for certain dirty tricks but “nothing illegal,” and
that the figures could be very embarrassing to the President, Mitchell,
Haldeman and others. Magruder told Porter that his name was sug-
gested as someone whom “we can count on to help in this situation.” 99
Together they agreed that Porter would falsely tell the FBI and the
grand jury that $100,000 of the money Liddy spent was for the purpose
of infiltrating radical groups that could endanger the personal safety
of the surrogate speakers for whom Porter was responsible. 1 Dean
testified he informed Haldeman and Ehrlichman of Magruder’s
fabricated story and Porter’s corroboration. 2 Ehrlichman, however,
contended that Dean did not apprise him of such information. 3
LaRue testified that during June, July, and August, he attended
meetings at which Magruder discussed his coverup story, which La-
Rue knew to be false. 4 LaRue said his motivation in helping prepare
this fake account was a desire to do all in his power to keep secret
information regarding the connection between the burglary and CRP. 5
Mitchell testified that he listened to rehearsals of Magruder’s story,
which he knew to be perjurious. 6
Prior to their appearances before the grand jury, Magruder and
Porter gave the false coverup story to FBI agents. 7 When Magruder
made his first grand jury appearance on July 5, 1972, he testified only
as to the organization of the CRP. However, when called for his sec-
ond appearance on August 18, 1972, he was aware he was a target
of its investigation. The day before his grand jury appearance he was
briefed by lawyers for CRP and Mr. Mardian. Ehrlichman informed
the President of these activities during an April 15, 1973, meeting,
stating that “apparently Mardian was able to get around and coach
witnesses,” he “was very heavy-handed,” and asked the witnesses “to
say things that weren’t true.” 8
Magruder, before his second appearance, was interrogated for ap-
proximately 2 hours by Dean and approximately one-half hour by
Mitchell. 9 Dean, fully aware of the false story Magruder was going
to tell, played “devil’s advocate” asking Magruder questions the pros-
ecutor might ask. 10
03 2 Hearings 801—3.
07 3 Hearings 952.
98 Edited Presidential Conversations, p. 527.
99 2 Hearings 635.
1 2 Hearings 636.
2 3 Hearings 952.
3 7 Hearings. 2845.
4 6 Hearings 2292.
B 6 Hearings 2340-41.
6 5 Hearings 1865.
7 2 Hearings 637, 803.
8 Edited Presidential Conversations, pp. 687-88.
9 2 Hearings 803.
10 2 Hearings 803, 869 ; 3 Hearings 952.
46
On August 18, 1972, Magruder gave the false coverup story to the
grand jury. 11 After Magruder’s appearance, Dean, at Haldeman’s
request, called Assistant Attorney General Henry Petersen to ask
how Magruder’s testimony had gone. 12 Dean testified Petersen said
Magruder “had made it through by the skin of his teeth.” 13
According to Petersen, who subsequently informed the President
of this call during an April 16, 1973i, meeting, 14 he later called Dean
back to give him Assistant U.S. Attorney Earl Silbert’s evaluation :
“Magruder had been a good witness in his own behalf,” but that no
one believed “the story about the money.” 15 Dean repeated Peter-
sen’s comments to Mitchell, Magruder, and Haldeman. Dean testified
that Haldeman was “very pleased” because the White House strategy
to “stop the involvement at Liddy” was succeeding. 16
Magruder was called before the grand jury a third time in early
September to testify concerning entries in his diary reflecting meet-
ings in Mitchell’s office on January 27 and February 4 among Liddy,
Magruder, Dean and Mitchell. Magruder testified he met with Mitch-
ell and Dean to arrive at an explanation for these diary entries. The
story finally developed that the first meeting on January 27 had been
canceled and that, at the second, the participants discussed the new
election law. The presence at the meeting of Liddy, counsel for CEP,
and of Dean, Counsel to the President, gave some credence to this
account. An initial suggestion that the diary entries be erased was
abandoned when it was recognized that erasures could be discovered
by the FBI. Magruder testified he gave this false story to the grand
jury when he appeared. 17
H. Participation op White House and GRP Personnel in FBI
Interviews
White House and CRP officials took other steps to keep abreast of
and interfere with the Watergate investigation. When White House
staff personnel were interviewed by FBI agents, Dean or his assistant,
Fred Fielding, attended the interviews. 18 Also, in most cases when
FBI agents interviewed CRP staff persons, CRP counsel O’Brien or
Parkinson -were present. And, on October 12, the White House received
82 FBI investigative repo its relating to Watergate. 19
The interest in and preparation for the FBI interview of Kathleen
Chenow, the secretary for the Plumbers, is illustrative of the concern
and activity in the White House regarding the FBI’s investigation.
Dean testified that, when the FBI indicated its interest in Chenow,
she was in London. Dean discussed the Chenow matter with Ehrlich -
man and suggested that someone go to London and explain to her
that she should not reveal to the FBI Hunt’s and Liddy’s activities
with the Plumbers. With Ehrlichman’s approval, Fielding flew to
London and brought Chenow back to Washington on first class airline
accommodations paid for by the White House. Fielding and Young
11 2 Hearings 803.
12 3 Hearings 952.
13 Ibid.
14 Edited Presidential Conversations, pp. 868-9.
15 9 Hearings 3651.
10 3 Hearings 952.
17 2 Hearings 804.
18 3 Hearings 940-41 ; Gray confirmation hearings, p. 653.
19 Gray confirmation hearings, pp. 630, 677-78.
47
briefed Chenow before her FBI interview and were present when the
FBI questioned her. 20
Moreover, special arrangements were developed to prevent top White
House officials from directly testifying before the grand jury. Certain
officials — Colson, Krogh, Young, Chapin and Strachan — were per-
mitted to give their testimony to the prosecutors at the Department of
Justice and were, therefore, not exposed to direct questioning by grand
jurors. When Dean asked Petersen to repeat this special procedure for
Maurice Stans, Petersen at first refused. 21 Under direction from the
President, Ehrlichman then approached Petersen and Kleindienst
to prevent Stans from appearing before the grand jury. 22 Although
both told Ehrlichman he could not dictate policy to the J ustice Depart-
ment, they agreed to make another concession for Stans and permitted
his interrogation by the prosecutors with no grand jurors present. 23
In considering the FBI investigation it is important to note that
neither the FBI nor other Department of Justice personnel inter-
viewed Robert A. Reisner, the administrative assistant to CRP deputy
director Magruder, 24 The first time Reisner was subpenaed by any
investigative body was on or about March 30, 1973, when he was sub-
penaed by this committee. 25 The failure to question Reisner was a
crucial omission because, as Magruder later testified, the coverup might
have ended months earlier if Reisner had been interrogated. 26
I. The President’s Statement of August 29 — The So-Called Dean
Report
On August 29, 1972, President Nixon, at a press conference, told the
American people that Dean had conducted a “complete investigation”
for the White House which enabled the President to declare : “I can
state categorically that no one in the White House staff, no one in this
administration, presently employed, was involved in this very bizarre
incident.” 27 The President was briefed for this press conference by
Ehrlichman and Ziegler. 28 Dean testified before the committee that
there was no “Dean Report,” that he never made the investigation
referred to by the President. 29 To the contrary, Dean testified, far from
investigating, he was spending most of his time participating in the
coverup on instructions from Haldeman and Ehrlichman as liaison
between the White House and CRP. The Edited Presidential Con-
versations of a March 20, 1973, telephone call between the President
and Dean casts further light on the President’s August 29 statement.
In the March 20 telephone call, the President suggested to Dean that
he prepare some kind of report that would appear complete, but would
be “very incomplete” which the President could use for public release
and to reassure the Cabinet. Dean asked, “As we did when you, back
in August, made that statement that — ” and the President replied,
“That’s right.” 30
20 3 Hearings 941.
21 3 Hearings 954.
22 7 Hearings 2700-1.
23 9 Hearings 3564-65, 3580, 3618-20.
24 2 Hearings 489.
25 2 Hearings 496, 507-8.
28 2 Hearings 805.
27 Washington Post , August 30 ,1972, p. Al.
28 7 Hearings 2720, 2726.
29 3 Hearings 955-56 ; 4 Hearings 1510.
30 Edited Presidential conversations, pp. 167-68.
48
J. The September 15 Meeting Between Dean and the President
The grand jury returned indictments against Liddy, Hunt, McCord,
Barker, Sturgis, Martinez, and Gonzales on September 15, charging
a number of crimes arising out of the Watergate break-in. The coverup
had worked and the indictments had stopped with Liddy. Higher
CRP and 'White House officials were not yet exposed.
John W. Hushen, the Justice Department’s Director of Public In-
formation, declared on that day that the Department had concluded
its investigation, stating : “We have absolutely no evidence to indicate
that any others should be charged.” 31 Hushen’s comments were fol-
lowed the next day by those of Attorney General Ivleindienst, who said
that the investigation by the FBI and the U.S. Attorney’s Office had
been “one of the most extensive, objective, and thorough” in many
years. That same day Assistant Attorney General Petersen denied
there had been a “whitewash” and cited statistics to prove the thor-
oughness of the investigation. 32
On September 15, after the indictments were issued, the President
summoned Dean to the Oval Office. 33 Haldeman was also present. 34
Dean testified :
The President told me that . . . Haldeman . . . had kept
him posted on my handling of the Watergate case. The Presi-
dent told me I had done a good job and he appreciated how
difficult a task it had been and the President was pleased that
the case had stopped with Liddy ... I told him that all that
I had been able to do was to contain the case and assist in
keeping it out of the White House. I also told him that there
was a long wav to go before this matter would end and that
I certainly could make no assurances that the day would not
come when this matter would start to unravel . . , 35
According to Dean, other topics discussed at the meeting included
the bugging of the 1968 Nixon campaign, the date of the criminal trial,
progress in the various Watergate civil suits, press coverage of Water-
gate, a GAO audit, the Patman Committee’s inquiry, use of the IRS
to attack administration “enemies,” and post-election plans to place of-
ficials responsive to White House requirements in the IRS and other
F ederal agencies. He said the President also asked him “to keep a good
list of the press people giving us trouble, because we will make life
difficult for them after the election.” 36 When he left the meeting, Dean
said, he was “convinced” that the President was aware of the coverup. 37
Haldeman gave a different version of this meeting. He denied any
contemporaneous knowledge of the coverup or- that he had informed
the President of such activities. He testified that the President merely
expressed his satisfaction as to Dean’s investigative work which had
shown no involvement of White House, personnel in the break-in.
1 laldeman confirmed that the 1968 bugging of the Nixon campaign was
sl New York Times , September 16, 1972, p. 1. "
32 Washington Post, September 17, 1972,
33 4 Hearings 1474—75.
34 4 Hearings 1475.
85 3 Hearings 957-59 ; 4 Hearings 1372, 1474-77, 1494-95.
38 3 Hearings 958—59 ; 4 Hearings 1477-82.
37 3 H earings 959, 1028 ; 4 Hearings 1435, 1564-67.
49
discussed along with the civil suit, the GAO audit, the Patman Com-
mittee investigation, and use of the IKS. 38
Alexander Butterfield’s testimony before the committee revealed that
there is a complete tape recording of what was said by the participants
at the September 15 meeting. 39 This fact was corroborated by Halde-
man who informed the committee that he had in fact listened to the
tape. 40 The committee on July 17, 1978, requested the President to pro-
vide the committee with the tape recording of this meeting, among
others. 41 When the President refused on July 23, 1973, the committee
issued a subpena to the President for this and other tape recordings. 42
The President on July 25, 1973, refused to comply with this subpena 43
and the matter was taken to court, ( See Chapter 9. )
The Select Committee has now received — along with the American
public — an edited, unauthenticated partial transcription of the tape
recording of this conversation and others prepared by the White
House. These, transcripts are not conclusive proof as to the contents
of these conversations. They contain a number of deletions and portions
of the taped conversation are alleged to be inaudible or unintelligible.
Also transcripts cannot provide voice tone and inflections which at
times are crucial to understanding the meaning of speakers’ words.
Moreover, the presidential version of the September 15 meeting dif-
fers in significant respects from that purportedly prepared by the
House Judiciary Committee, which lias a copy of the actual record-
ing. 44 At the least, however the Presidential transcripts are useful as
White House versions of what occurred and thus— with the caveat that
they are not the best evidence available — they have been utilized by
the committee in the preparation of this report.
The transcript of the September 15 meeting supports many aspects
of Dean’s testimony. Thus the transcript begins with the President’s
greeting Dean: “You had quite a day today didn’t you? You got
Watergate on the way didn’t you?” Dean replied, “We tried,” 45 and
then, in answer to Haldeman’s question “ How did it all end up?”, an-
swered “Ah, I think we can say ‘well’ at this point,” 46 Shortly there-
after the following colloquy occurred :
D. Three months ago I would have had trouble predict-
ing there would be a day when this would be forgotten but I
think I can say that 54 days from now nothing is going to
come crashing down to our surprise,
P. That what?
D. Nothing is going to come crashing down to our surprise,
P. Oh well, this is a can of worms as you know a lot of
this stuff that went on. And the people who worked this way
are awfully embarrassed. But the way you have handled all
this seems to me has been very skillful putting your fingers
88 7 Hearings 2888-89.
39 5 Hearings 2073—91.
40 7 Hearings 2894.
41 5 Hearings 2178—79.
42 6 Hearings 2478-79.
43 7 Hearings 2657.
44 See Washington Post, May 12, 1974, pp. A26— 28.
45 The purported House version also has Dean responding, “Quite a three months.”
46 Edited Presidential Conversations, p. 55.
50
in the leaks that have sprung here and sprung there. [Em-
phasis added .] 47 48
$ * * Jfc
D. Well as I see it, the only problems we may have are
the hum, an ones and I will keep a close watch on that. [Em-
phasis added.]
P. Union?
D. Human.
H. Human frailties.
D. People get annoyed — some fingerpointing — false accu-
sations —
P. You mean on this case?
D. On this case. There is some bitterness between the
Finance Committee and the Political Committee — they feel
they are taking all the heat and all the people upstairs are
bad people — not being recognized.
P. We are all in it together. This is a war. We take a few
shots and it will be over. We will give them a few shots and
it will be over. Don't worry. I wouldn't want to be on the other
side right now. Would you ? 49 [Emphasis added.]
The transcript also records significant discussion relating to possible
hearings proposed by Congressman Wright Patman, Chairman of
the House Banking and Currency Committee :
D. [The Patman Committee] is the last forum where we
have the least problem right now. Kennedy has already said
he may call hearings of the Administrative Practices sub-
committee. As these committees spin out oracles we used to
get busy on each one. I stopped doing that about two months
ago . 50 We just take one thing at a time.
P. You really can’t sit and worry about it all the time.
The worst may happen but it may not. So you just try to
button it up as well as you can and hope for the best , and
remember basically the damn business is unfortunately try-
ing to cut our losses , 51
D. Certainly that is right and certainly it has had no effect
on you. That’s the good thing.
H. No, it has been kept away from the White House and
of course completely from the President. The only tie to the
White House is the Colson effort they keep trying to pull in.
D. And of, course, the two White House people of lower
level — indicted — one consultant and one member of the Do-
mestic Staff. That is not very much of a tie.
H. That’s right . 52 [Emphasis added.]
The edited transcript does not contain a statement by Dean, as
he testified, that “all that I had been able to do was to contain the
47 Id. at 62.
48 The purported House version reads, . . but the way you, you’ve handled it, it seems
to me, has been very skillful, because you — putting your fingers in the dike every time that
leaks have sprung here and sprung there.”
40 Edited Presidential Conversations, p. 64.
60 The purported House version reads, . . as this case has been all along, you spin out
horribles that uh you can conceive of, and so we just don’t do that. I stopped that about,
uh, two months ago.”
51 The House version allegedly states in part: “And remember that basically the damn
business is just one of those unfortunate things, we’re trying to cut our losses.”
62 Edited Presidential Conversations, pp. 69-70.
51
case and assist in keeping it out of the White House” and that “there
was a long way to go before this matter would end and ... 1 certainly
could make no assurances that the day would not come when this mat-
ter would start to unravel.” Although the edited transcript also does
not reflect a discussion between the President and Dean regarding the
use of the IRS respecting administration enemies, or any specific
reference to an IRS investigation of DXC chairman Lawrence
O’Brien, the reconstruction of this meeting prepared by White House
Counsel Fred Buzhardt and submitted to the committee confirms that
there was such a discussion at the September 15 meeting. 53 Moreover,
the transcript indicates that the final portion of the conversation is
deleted. 54
K. Payoffs to Watergate Defendants
1. EARLY PAYOFF DISCUSSIONS
As already noted, on June 20 or 21, Liddy met with LaRue and
Mardian and told them of commitments made to provide bail, legal
expenses and. family support funds for the Watergate defendants. 55
Mardian said he also discussed Hunt’s request to CRP for legal fees
with CRP counsel Kenneth Parkinson and Paul O’Brien, and with
William Bittman, Hunt’s attorney. Mardian said he thought this
request was blackmail and should not be paid. He said he had no
other discussions regarding payment of money to the defendants. 66
Dean, however, testified that Mardian suggested that the CIA assist
regarding financial support for the defendants. 57 This discussion con-
cerning the CIA, Dean said, arose at a meeting among Dean, Mardian
and Mitchell during which Mitchell suggested that Dean contact
Ehrlichman and Ilaldeman to have the White House request CIA
financial assistance for the defendants. 58 Dean did meet with General
Walters on June 26, June 27 and June 28 and asked Walters whether
the CIA would provide financial assistance for bail, legal defense and
family support. Walters answered in the negative. 59
2. THE ACTIVITIES OF HERBERT KALMBACH AND TONY ULASEWICZ
On June 28, Dean testified he met with Mitchell, LaRue and Mardian
and informed them that the CIA would not provide financial assist-
ance. 60 According to Dean, LaRue then indicated that Stans had only
limited cash — $70,000 or $80,000 — and that much more would be
needed. 61 Dean testified that Mitchell asked him to obtain Haldeman’s
and Ehrlichman’s approval to use Herbert Kalmbach to raise the
necessary money. 62 Mitchell denied being at this meeting and asking
Dean to acquire Ivalmbach’s services. 63
Dean testified he conveyed the suggestion to Haldeman and Ehrlich-
man who told him to contact Kalmbach. During an April 14, 1973,
53 Exhibit 70— A, 4 Hearings 1796.
54 Edited Presidential Conversations, p. 75.
55 6 Hearings 2289, 2358.
60 6 Hearings 2367-68,
57 3 Hearings 945—46.
B8 3 Hearings 946.
59 3 Hearings 946-47.
60 3 Hearings 949—50.
61 3 Hearings 950.
62 3 Hearings 950.
03 4 Hearings 1672.
52
meeting among the President, Ehrlichman and Haldeman, Haldeman
confirmed this fact, stating, “we [Ehrlichman and Haldeman] referred
him [Dean] to Kalmbach.” 64 As a result, Dean called Kalmbach on
June 28, 1972, and told him that Haldeman, Ehrlichman and Mitchell
had requested that he come to Washington as quickly as possible. 65
Kalmbach immediately flew to Washington and met with Dean on
June 29. 66 Dean knew Kalmbach did not wish to engage in further
fundraising. In order to persuade Kalmbach to take this new assign-
ment, Dean said, he told Kalmbach all he knew respecting the break-in
and suggested that the scandal might involve the President himself,
although he did not know this for a fact. He told Kalmbach that
Haldeman, Ehrlichman and Mitchell felt it very important that he
raise the money and instructed Kalmbach to contact LaRue as to the
amounts needed and the timing. 67
Kalmbach confirmed that he met with Dean on June 29 and was
asked by Dean to assume the fundraising assignment. 68 He said Dean
stressed that the assignment required absolute secrecy and indicated
that, if it became known, it might jeopardize the campaign. 69 Kalm-
bach said that, in giving him this assignment, Dean indicated he spoke
for others, not only for himself. He said that, although Dean did not
use Haldeman’s or Ehrlichman’s name, he knew Dean reported to
Ehrlichman and worked for Haldeman. 70 And, since Dean was Counsel
to the President, Kalmbach believed Dean had authority to ask him to
undertake this task. 71
Stans testified he met with Kalmbach on June 29 and gave him
$75,000, after being informed that the money was needed for a special
White House project. Stans said that Kalmbach stated he was asking
for the money on “high authority.” 72 According to both Kalmbach’s
and Stans’ testimony, Kalmbach did not inform Stans how the money
would be used. 73
Kalmbach distributed the money through Tony Ulasewicz, who had
been hired originally by John Ehrlichman for White House assign-
ments. 74 Ulasewicz was unable to deliver the money to either Douglas
Caddy or Paul O’Brien, the first two contacts Kalmbach suggested,
because of their reluctance to receive funds under the conditions set
by Ulasewicz. 75 The third contact, William Bittman, Hunt’s attorney,
after an initial rejection, agreed to accept $25,000 in cash in a brown
envelope placed on a ledge in a telephone booth in his law office build-
ing. Ulasewicz wanted to deliver the full amount received from Stans
($75,000) but Bittman only wanted his initial fee of $25,000. 76
The delivery of these funds was typical of the procedure Ulasewicz
used on future occasions. He placed the envelope containing the $25,000
in the telephone booth and called Bittman to retrieve it. Bittman de-
scribed the color of the suit he was wearing; Ulasewicz hid and
watched until Bittman came out of the elevator, went to the booth,
64 Edited Presidential Conversations, p. 494.
05 3 Hearings 950.
06 5 Hearings 2097—98.
07 3 Hearings 950.
68 5 Hearings 2098.
09 5 Hearings 2164.
70 5 Hearings 2099.
71 5 Hearings 2100.
73 2 Hearings 702-3.
73 2 Hearings 703 ; 5 Hearings 2100.
74 1 Hearings 288.
75 5 Hearings 2103—4.
70 6 Hearings 2225.
53
took the envelope and went back into the elevator. Ulasewicz then left
the building. 77
After making this delivery to Bittman, Ulasewicz received a call
from Kalmbach at another telephone booth. Kalmbach gave Ulasewicz
a telephone number and told him to contact the “writer” or the “waiter’s
wife,” code names for Hunt and Mrs. Hunt. Ulasewicz, using his alias
“Mr. Rivers,” called Mrs. Hunt. He asked her what sums of money
would be needed for the various defendants. Mrs. Hunt gave Ulasewicz
figures for a 5-month period that covered salaries for Hunt, McCord,
and Liddy ($3,000 a month for each), family support for Barker,
Sturgis, Gonzales, and Martinez (totaling about $14,000) and a sepa-
rate $23,000 to Barker which included “$10,000 bail, $10,000 under the
table and $3,000 for other expenses.” 78 Mrs. Hunt also told Ulasewicz
what would be required for legal fees. The lawyers for Hunt, McCord,
Liddy and Barker were each to receive $25,000 ; an additional $10,000
in legal fees for each of the remaining three defendants, Sturgis,
Gonzales and Martinez, was also required. These were only the initial
requirements. The total sum Mrs. Hunt was requesting was in the
vicinity of $400,000-$450,000. 79 This, of course, was very much above
the $75,000 Ulasewicz had received from Kalmbach. Ulasewicz kept
Kalmbach informed respecting his discussions with Mrs. Hunt.
Ulasewicz arranged with Mrs. Hunt the supply of $40,000 as a
“down payment.” 80 Ulasewicz placed the $40,000 for Mrs. Hunt in a
locker at National Airport in Washington and telephoned her instruc-
tions to pick up the key to the locker which would be scotch-taped
under the ledge in a telephone booth at the airport. The key was placed
exactly 5 minutes before Mrs. Hunt arrived to retrieve it. Again
Ulasewicz assumed a position where he could observe the telephone
booth unseen. He saw Mrs. Hunt (whose clothing was known to him)
go to the telephone booth, retrieve the key, open the' locker and remove
the money. 81
Kalmbach came to Washington on July 19 to meet with Dean and
LaRue and receive an additional amount of money from LaRue. 82
According to Kalmbach the amount was $40,000; LaRue, however,
estimated $20,000. 83 This money came from the $81,000 which Sloan
and Stans had removed from Stans’ safe and given to LaRue. 84
Kalmbach testified that he took the $40,000 to New York and gave it to
Ulasewicz. 85
After the July 19 meeting, Kalmbach became concerned over the
clandestine nature of the funding operations, which he found distaste-
ful. Dean, at that meeting, had asked Kalmbach to raise additional
funds for the Watergate defendants and Kalmbach had determined to
talk to Ehrlichman about it. 86 He wanted Ehrlichman’s assurances as
to the propriety of the assignment . Until that time he had distributed
funds given him by Stans or LaRue. Now he was being asked to seek
an outside contributor. 87
77 6 Hearings 2226-27.
78 61 Hearings 2234-35.
79 6 Hearings 2236.
tolMd.
81 6 Hearings 2227-31.
82 5 Hearings 2104.
88 5 Hearings 2104 : 6 Hearings 2291.
84 2 Hearings 546-48.
85 5 Hearings 2105.
86 5 Hearings 2105.
87 5 Hearings 2105-6.
54
On July 26, Kalmbach travelled to Washington and met with Ehr-
lichman. He found Ehrlichman familiar with the fundraising assign-
ment he had received from Dean. He explained to Ehrlichman that the
secrecy of the operation and the various activities connected with it
disturbed him. Kalmbach said he remembered vividly the meeting
with Ehrlichman because :
I looked at him and I said, “John, I am looking right into
your eyes. I know Jeanne and your family, you know Barbara
and my family. You know that my family and my reputation
mean everything to me and it is just absolutely necessary,
John, that you tell me, first that John Dean has the authority
to direct me in this assignment, and that I am to go forward
on it.” 88
Kalmbach said Ehrlichman declared, “Herb, John Dean does have
the authority, it is proper, and you are to go forward.” 89 Ehrlichman
also emphasized the need for the secrecy, stating that if the press were
to learn of these activities, “they would have our heads in their laps.” 90
This satisfied Kalmbach. He left the meeting and later obtained an
additional $30,000 from LaRue which he transmitted to IJlasewicz. 91
Ehrlichman denied that he reassured Kalmbach but did recall a con-
versation where secrecy was discussed, and that Kalmbach told him
“Mr. Ulasewicz was carrying money back and forth.” 92
Kalmbach said he returned to California and raised an additional
$75,000 in cash from a private contributor, Thomas V. Jones, chairman
of Northrop Corp. Mr. Jones did not know the intended use of the
money, and apparently believed he was making a campaign contribu-
tion to the President. Kalmbach notified Ulasewicz to come to Cali-
fornia and meet him in front of the Airporter Inn near Kalmbach’s
office in Newport Beach. Kalmbach picked Ulasewicz up in his car,
they drove a distance, parked, and Kalmbach gave the cash to Ulase-
wicz. 93 Ulasewicz told the committee that, while in California, he
warned Kalmbach that “something here is not Kosher,” that “. . . it’s
definitely not your ball game, Mr. Kalmbach.” He told Kalmbach
that, because of the increasing size of the money demands and other
surrounding circumstances, it was time for both of them to get out
of the project. 94
Kalmbach testified that in mid- August Dean and LaRue contacted
him again seeking additional funds. He decided, however, that he
would not participate further in this assignment. 95 Kalmbach told the
committee that one factor that disturbed him and led him to quit was
the newspaper stories about Watergate appearing in the press. 96
On September 19, at LaRue’s urgent request, Ulasewicz flew to
Washington from New York and delivered the remaining funds
Kalmbach had given him — $53,000 to Mrs. Hunt, $29,000 to LaRue.
This terminated Ulasewicz’s and Kalmbach’s activities respecting the
funding of the Watergate defendants. 97
88 5 Hearings 2106.
89 Ibid.
90 5 Hearings 2107.
91 5 Hearings 2108.
92 6 Hearings 2571-72.
93 5 Hearings 2108-9.
94 6 Hearings 2237.
95 5 Hearings 2110.
90 Ibid.
97 6 Hearings 2237-38.
55
Kalmbach testified that, after these funds were delivered by Ulase-
wicz to Mrs. Hunt and LaRue, he arranged a meeting with Dean and
LaRue in Dean’s office to reconcile with LaRue the amount of money
distributed in the operation. He testified that the total amount received
by him and disbursed through Ulasewicz was approximately $220,000.
As soon as he had made the reconciliation with LaRue, Kalmbach
destroyed his notes by shredding and burning them in Dean’s office. 98
LaRue took over the raising of funds and their distribution to the
TV atergate defendants. His contact became William Bittman, Hunt’s
attorney. 99 However, because of the rising demands for money, it was
soon necessary for LaRue to find additional funds.
3. THE HUNT TO OOLSON TELEPHONE CAUL
In late November 1972, Hunt called Colson to complain about the
failure of the White House and CRP to meet their monetary commit-
ments. Colson recorded the conversation and a copy of its transcript
is entered in the record as exhibit No. 152. 1 In this call, Hunt, among
other things, stated :
• • • I T]here is a great deal of unease and concern on the
part of 7 defendants . . . But there is a great deal of financial
expense that has not been covered and what we have been
getting has been coming in very minor gibs and drabs and
Parkinson, who has been the go-between with my attorney,
doesn’t seem to be very effective and we are now reaching a
point of which . . .
St St St St St
These people have really got to . . . this is a long haul thing
and the stakes are very high and I thought that you would
want to know that this thing must not break apart for foolish
reasons ...
* * * * *
All right, now we’ve set a deadline now for close of busi-
ness on the 25th of November for the resolution on the liquida-
tion of everything that is outstanding . . .
St St s= St St
. . . [W]e’re protecting guys who are really responsible , but
now that’s that . . . and of course that’s a continuing require-
ment, but at the same time, this is a two-way street and as I
said before, we think that now is the time when a move should
be made and surely the cheapest commodity available is
money. These lawyers have not been paid, there are large
sums of money outstanding. That’s the principal thing. Liv-
ing allowances which are due again on the 31st of this month,
we want that stuff well in hand for some months in advance.
I think these are all reasonable requests. They’re all promised
in advance and reaffirmed from time to time to my attorney
and so forth, so in turn I’ve been giving commitments to the
people who look to me [Emphasis added.]
98 5 Hearings 211 ; see also 6 Hearings 2293.
99 6 Hearings 2293.
1 9 Hearings 3888-91.
56
Colson gave a copy of the tape recording to Dean. On November 15,
Dean, Ehrlichman and Haldeman met at Camp David to discuss the
conversation and the increasing, threatening demands transmitted
through Hunt’s lawyer to Paul O’Brien. Dean testified that his in-
structions from Haldeman and Ehrlichman were to meet with Mitchell,
play the tape, and tell him to take care of these problems. 2 Dean went
to New York, played the tape for Mitchell, but received no indication
from Mitchell that he would take any action.
4. THE $350,000 WHITE HOUSE FUND
Prior to April 7, 1972, $350,000 in cash previously kept in Sloan’s
safe at CRP had been sent to the White House at Haldeman’s request,
purportedly for polling purposes. 3 Strachan had received the money
in Sloan’s office and had taken it to the White House. Haldeman had
arranged for a person he trusted, not identified with the White House,
to keep the funds in a private bank account. 4
According to Dean’s testimony: In the first week of December,
Mitchell called Dean and told him that a portion of this $350,000
must be used to meet the demands by Hunt and others. Mitchell indi-
cated that the money used would be later replaced. Mitchell asked
Dean to obtain Haldeman’s approval for this action. Dean conveyed
Mitchell’s message to Haldeman. Although both Dean and Haldeman
were reluctant to use this money, they had no alternative. Haldeman
authorized Dean to inform Strachan to deliver the money to CRP. 5
Strachan testified that, at first, he delivered only $40,000 of the
$350,000 to LaRue. 6 Haldeman confirmed this delivery when, in an
April 14, 1973, meeting with the President, he stated, “then they got
desperate for money, and being desperate for money took back-— I
think that it was $40,000.” 7 But this delivery, Dean testified, did not
satisfy the demands that “continued to be relayed by Mr. Bittman to
Mr. O’Brien who, in turn, would relay them to Mr. Mitchell, Mr.
LaRue, and myself. I, in turn, would tell Haldeman and Ehrlichman
of the demands.” 8
Dean testified that the demands reached the crescendo point shortly
before the trial in early January. He said that O’Brien and LaRue
came to his office and told him of the seriousness of the problem. Also,
he said, Mitchell called him to instruct that once again he should ask
Haldeman for the necessary funds. Dean said he called Haldeman
told him of Mitchell’s request and recommended that they deliver
the entire balance of the $350,000 to LaRue. Haldman acquiesced,
according to Dean, and said “send the entire damn bundle to them
but make sure we get a receipt for $350,000.” Dean testified he called
Strachan and told him to take the money to LaRue. 9
In a meeting on April 14, 1973, Haldeman told the President that he
had given the balance of the $350,000 to LaRue because “. . . they needed
money, and we wanted to get rid of money, it seemed it was of mutual
interest in working it out.” 10 In an April 16, 1973, meeting Haldeman
2 3 Hearings 969-70.
3 6 Hearings 2442, 2461.
* 7 Hearings 2879.
5 3 Hearings 970-71 ; 7 Hearings 2879.
6 6 Hearings 2463.
7 Edited Presidential Conversations, p. 531.
8 3 Hearings 971.
9 Ibid.
10 Edited Presidential Conversations, p. 531.
57
told the President that his participation in payments to the defendants”
[i]n my viewpoint . . . wasn’t to shut them up, but that is a hard case
for anybody to believe, I suppose.” 11
5. ADDITIONAL PRESSURES BY HUNT
Severe pressure from Hunt for additional funds came after the
Watergate trial and prior to his sentence. 12 Hunt testified that he re-
quested his attorney, Mr. Bittman, to arrange a meeting between Hunt
and O’Brien. 13 Hunt told O’Brien when they met that his legal fees
amounted to approximately $60,000, and that he was also concerned
about the future of his family and desired to have the equivalent of 2
years’ subsistence available to them before his incarceration. Although
Hunt testified he did not intend any threat, he told the committee :
And I put it to Mr. O’Brien that I had engaged as he might
or might not know, in other activities, which I believed I
described as seamy activities, for the White House. I do not
believe that I specified them. However, I did make reference
to them. The context of such references was that if anyone
was to receive benefits at that time, in view of my long and
loyal service, if not hazardous service, for the White House
that certainly I should receive priority consideration. 14
Hunt said O’Brien suggested that he send a memorandum to Col-
son. Hunt did not want, to write a memorandum but thought he should
contact Colson to explain his situation to him. 15
Bittman contacted Colson’s office and arranged for Colson’s law
partner, David Shapiro, to meet him on February 16, 1973. Hunt
testified lie told Shapiro substantially the same things he told O’Brien,
including a reference to his “seamy" activities” for the White House.
Hunt was very disappointed with the meeting since Shapiro did not
appear sympathetic. Hunt said he made it clear to Shapiro that he
wanted the money prior to the date of his sentence so he could make
“prudent distribution of that among the members of my family, my
dependents, taking care of insurance premiums and that sort of thing,
that it would have to be delivered to me before I was in jail.” Hunt
testified that on March 20 or 21, just prior to his sentence, he received
$75,000 in cash. 10 La Tvue admitted making the payment to Hunt after
approval from Mitchell. 17
6. THE MARCH 21 MEETING IN THE OVAL OFFICE
The indictment returned against Haldeman, Ehrlichman, Colson,
Mitchell, Strachan, Mardian and Parkinson alleges that the final pay-
ment to Hunt by LaRue was made on March 21, 1973, (not March 20)
shortly after Dean, Haldeman and the President discussed Hunt’s
11 Id. at p. 833. , ^ •
12 This pressure for money and how to handle it was one of the topics discussed at the
February 1974 La Costa meeting attended by Haldeman, Ehrlichman, Dean and Richard
Moore. This meeting is discussed in detail at pp. 76-78 of this report.
13 9 Hearings 3703.
14 9 Hearings 3704.
15 9 Hearings 3705.
10 9 Hearings 3706.
17 6 Hearings 2297-98, 2321. In all, LaRue testified he distributed around $210,000 to
Mr. Hunt’s attorney, Mr. Bittman (6 Hearings 2293—97). He also transmitted $20,000 to
Mr. Liddy’s attorney (6 Hearings 2296). The various sources of the funds LaRue distributed
are discussed at 6 Hearings 2333-34.
58
demands for money. According to the edited presidential transcripts,
it now appears that the conversation Dean testified he had with the
President on March 13, 1973, concerning Hunt’s demand actually oc-
curred on the morning of March 21, although in his testimony before
the committee Dean insisted that he correctly placed this conversa-
tion on March 13. 18 In this conversation, Dean said, he told the
President :
. . that there were money demands being made by the
seven convicted defendants, and that the sentencing of these
individuals was not far off. It was during this conversation
that Haldeman came into the office. After this brief interrup-
tion by Haldeman’s coming in, but while he was still there I
told the President about the fact that there was no money to
pay these individuals to meet their demands. He asked me
how much it would cost. I told him that I could only make an
estimate that it might be as high as $1 million or more. He
told me that that was no problem, and he also looked over at
Haldeman and repeated the same statement. He then asked
me who was demanding the money and I told him it was
principally coming from Hunt through his attorney . . .
The conversation then turned back to the question from
the President regarding the money that was being paid to the
defendants. He asked me how this was done. I told him I
didn’t know much about it other than the fact that the money
was laundered so it could not be traced and then there were
secret deliveries. I told him I was learning about things I
had never known before, but the next time I would certainly
be more knowledgeable . . .” 19
Dean also testified that money matters were discussed during his
morning meeting with the President on March 21. 20
The edited transcript of the March 21 meeting demonstrates that
Dean’s recollection as set forth in his testimony of his principal meet-
ing with the President concerning the hush money demands from the
Watergate defendants was in a large part accurate.
The following portions of the edited transcript supplied by the
President are particularly illustrative :
D. So that is it. That is the extent of the knowledge. So
where are the soft spots on this ? Well, first of all, there is
the problem of the continued blackmail which will not only
go on now, but it will go on while these people are in prison,
and it will compound the obstruction of justice situation. It
will cost money. It is dangerous. People around here are not
pros at this sort of thing. This is the sort of thing Mafia peo-
ple can do : washing money, getting clean money, and things
like that. We just don’t know about those things, because
we are not criminals and not used to dealing in that business.
P. That’s right.
D. It is a tough thing to know how to do.
P. Maybe it takes a gang to do that.
18 4 Hearings 1567.
10 & Hearings 995-96.
20 3 Hearings 998-1000.
59
I). That’s right. There is a real problem as to whether
we could even do it. Plus there is a real problem in raising
money. Mitchell has been working on raising some money.
He is one of the ones with the most to lose. But there is no
denying the fact that the White House, in Ehrlichman,
Haldeman and Dean are involved in some of the early money
decisions.
P. How much money do you need ?
D. I would say these people are going to cost a million
dollars over the next two years.
P. We could get that. On the money, if you need the money
you could get that. You could get a million dollars. You could
get it in cash. I know where it could be gotten. It is not easy,
but it could be done. But the question is who the hell would
handle it ? Any ideas on that ?
D. That’s right. Well, I think that is something that
Mitchell ought to be charged with.
P. I would think so too. [pp. 193-94]
P. What do you think? You don’t need a million right
away, but you need a million ? Is that right ?
D. That is right.
P. You need it in cash don’t you? I am just thinking out
loud here for a moment. Would you put that through the
Cuban Committee ?
D. No.
P. It is going to be checks, cash money, etc. How if that
ever comes out, are you going to handle it ? Is the Cuban Com-
mittee an obstruction of justice, if they want to help ?
D. Well they have priests in it.
P. Would that give a little bit of a cover ?
D. That would give some for the Cubans and possibly Hunt.
Then you’ve got Liddy. McCord is not accepting any money.
So he is not a bought man right now.
P. OK. Go ahead, [pp. 194-95]
P. Just looking at the immediate problem, don’t you think
you have to handle Hunt’s financial situation damn soon ?
D. I think that is — I talked to Mitchell about that last
night and —
P. It seems to me we have to keep the cap on the bottle that
much, or we don’t have any options.
D. That’s right.
P. Either that or it all blows right now ? [pp. 196-97]
P. . . . Talking about your obstruction of justice, though,
I don’t, see it.
D. Well, I have been a conduit for information on taking
care of people out there who are guilty of crimes.
P. Oh, you mean like the blackmailers ?
D. The blackmailers. Eight.
60
P. Well, I wonder if that part of it can’t be — I wonder if
that doesn’t — let me put it frankly : I wonder if that doesn’t
have to be continued ? Let me put it this way : let us suppose
that you get the million bucks, and you get the proper way to
handle it. You could hold that side ?
D. Uh, huh.
P. It would seem to me that would be worthwhile, [p. 206]
*****
P. Another way to do it then Bob, and John realizes this,
is to continue to try to cut our losses. Now we have to take a
look at that course of action. First it is going to require ap-
proximately a million dollars to take care of the jackasses
who are in jail. That can be arranged. That could be arranged.
But you realize that after we are gone, and assuming we can
expend this money, then they are going to crack and it would
be an unseemly story. Frankly, all the people aren’t going to
care that much. [pp. 225-26]
* * * * *
D. They’re going to stonewall it, as it now stands. Ex-
cepting Hunt. That’s why his threat.
H. It’s Hunt’s opportunity.
P. That’s why for your immediate things you have no
choice but to come up with the $120,000, or whatever it is.
Eight?
D. That’s right.
P. Would you agree that that’s the prime thing that you
damn well better get that done ?
D. Obviously he ought to be given some signal anyway.
P. (Expletive deleted ) get it. In a way that — who is going
to talk to him ? Colson ? He is the one who is supposed to know
him ? [Emphasis added.] [pp. 236-37]
At this meeting and at the afternoon meeting on March 21, other
alternatives to paying hush money were considered including certain
public disclosures. During the afternoon meeting, with regard to
public disclosures, the participants perceived no viable “option” which
would not precipitate revelation of the coverup. At the close of the
afternoon March 21 meeting, the President, telling Dean, Haldeman
and Ehrlichman he had to leave, concluded with an unanswered ques-
tion :
P. What the hell does one disclose that isn’t going to
blow something? [p. 269]
7. OTHER RELEVANT PRESIDENTIAL MEETINGS CONCERNING PAYOFFS
The following morning, on March 22, 1973, Dean met with Halde-
man, Ehrlichman and Mitchell in Haldeman’s office. At the beginning
of this meeting, Dean said, Ehrlichman asked Mitchell whether Hunt’s
money problem had been resolved. Dean said Mitchell replied he
didn’t think it was a problem. 21 Mitchell denied this discussion took
place. 22 Ehrlichman recalls a conversation on March 22 when Dean
21 3 Hearings 1001.
22 4 Hearings 1650.
61
(not Ehrlichman) asked Mitchell, without specific reference to Hunt,
“is that matter taken care of?” Mitchell’s answer, Ehrlichman says,
was something like “I guess so.” 23
Dean’s version is supported by the edited Presidential tran-
scripts. The transcripts show that, in a meeting between the President
and Dean in the Oval Office on April 16, 1973, Dean recalled that a few
days after the March 21 meeting he met with Haldeman, Ehrlichman
and Mitchell. Dean said Ehrlichman asked him : “Well, is that problem
with Hunt straightened out?” Dean said he told Ehrlichman to ask
Mitchell who, in turn, replied, “I think the problem is solved.” The
conversation between the President and Dean continued :
P. That’s all?
D. That’s all he said.
P. In other words, that was done at the Mitchell level ?
D. That’s right.
P. But you had knowledge; Haldeman had knowledge;
Ehrlichman had knowledge and I suppose I did that night.
That assumes culpability on that, doesn’t it? [p. 798]
Also relevant is an April 17, 1973, conversation among the Presi-
dent, Haldeman and Ehrlichman :
P. Well (inaudible). I suppose then we should have cut —
shut if off, ’cause later on you met in your office and Mitchell
said, “ That teas taken care of."
H. The next day. Maybe I can find the date by that
P. Yeah. And Dean was there and said, “What about this
money for Hunt ?” Wasn’t Dean there ?
H. No, what happened was — Ehrlichman and Dean and
Mitchell and I were in the office, in my office, and we were
discussing other matters. And in the process of it, Mitchell
said — he turned to Dean and said, “Let me raise another point.
Ah, have you taken care of the other problem — the Hunt
problem?” But we all knexo instantly what he meamt. Dean
kind of looked a little flustered and said, “Well, well, no. I
don’t know where that is or something,” and Mitchell said,
“Well I guess it’s taken care of.” And so we assumed from
that that Mitchell had taken care of it, and there was no
further squeak out of it so I now assume that Mitchell took
care of it. [Emphasis added.] [pp. 1035-36]
Just prior to the above exchange, the President recalled his dis-
cussion with Dean on March 21 about the possibility that it might
require $1 million to meet the blackmail demands from Watergate
defendants. Haldeman (inaccurately) recalled to the President that
he (the President) had told Dean, “Once you start down the path
with blackmail it’s constant escalation.” Then Haldeman said:
“They could jump and then say, ‘Yes, well that was morally wrong.
What you should have said is that blackmail is wrong not that it’s
too costly.’ ” 24 At the same meeting, the following colloquy took place
between the President and Haldeman :
23 7 Hearings 2853.
24 Edited Presidential Conversations, p. 1034.
62
H. We left it — that we can’t do anything about it anyway.
We don’t have any money, and it isn’t a question to be directed
here. This is something relates to Mitchell’s problem.
Ehrlichman has no problem with this thing with Hunt. And
Ehrlichman said, (expletive removed) “if you’re going to
get into blackmail, to hell with it.”
P. Good (unintelligible) Thank God you were in there
when it happened. But you remember the conversation ?
H. Yes, sir.
P. I didn’t tell him to go get the money did I ?
H. No. [pp. 1032-33]
Some of the participants involved in the payments to defendants
(Haldeman, Ehrlichman, Kalmbach) told the committee that pay-
ments were authorized, not to buy the silence of the defendants, but
solely to create a defense fund for the Watergate burglars, a fund
which they said they believed was legitimate. 25 And in an April 14,
1973, meeting between the President and Haldeman, the following
colloquy took place :
H. That was the line they used around here. That we’ve got
to have money for their legal fees and family.
P. Support. Well, I heard something about that at a much
later time.
* * * * *
P. And, frankly, not knowing much about obstruction of
justice, I thought it was perfectly proper.
* * * * *
P. Would it be perfectly proper?
E. The defense of the
P. Berrigans?
E. The Chicago Seven.
P. The Chicago Seven ?
H. They have a defense fund for everybody, [p . 431 ; see also
p. 833]
This evidence must be considered in light of the contrary evidence
presented above. As indicated, none of those who authorized or par-
ticipated in the making of the payments to the Watergate defendants
used their own money; to the contrary they used campaign funds
contributed by others who had no knowledge that their money was
being employed to pay the legal fees of the Watergate defendants and
to support their families. Also relevant is the clandestine nature of
the payoffs which were made with $100 bills and placed in “drops”
by an unseen intermediary using a code name. Even the President
recognized that the payoffs smacked of coverup. In an April 27 meet-
ing with Henry Petersen, the secret payments of money to the Water-
gate defendants were discussed :
HP. . . . Once you do it in a clandestine fashion, it takes on
the elements —
P. Elements of a coverup.
HP. That’s right, and obstruction of justice. [Edited Pres-
idential Conversations, p. 1281.]
25 5 Hearings 2092 , 2165 ; 6 Hearings 2568 , 2570-72 ; 7 Hearings 2879 .
63
L. Representations Concerning Executive Clemency
Only the President of the United States can grant Executive clem-
ency in a matter involving a Federal crime. The evidence reveals that,
during the latter part of 1972 and in early January 1973 prior to the
first Watergate trial, promises of Executive clemency were made to
certain Watergate defendants in a further effort to maintain their
silence. These promises of Executive clemency were made with the
representation that they were authorized by high officials close to the
President. 26
Ehrlichman testified that he discussed Executive clemency with the
President as early as July 1972. According to Ehrlichman, the Presi-
dent did not even want members of the White House staff to discuss
clemency with anyone involved in the case, much less to offer it. 27 The
President, in a statement on August 15, 1973, confirmed Ehrlichman’s
statement that he told Ehrlichman in July that under no circumstances
could Executive clemency be considered for participants in the Water-
gate affair.
| 1. REPRESENTATIONS TO JAMES m’CORD
McCord testified that, in late September or early October 1972,
Gerald Alch, his attorney, met with William Bittman who represented
Hunt. After this meeting, McCord said, Alch told McCord that Execu-
tive clemency, financial support and rehabilitation would be made
available to the Watergate defendants.
Alch denied in his testimony before the committee that he trans-
mitted these assurances of Executive clemency to McCord. To the
contrary, he testified he told McCord: “Jim, it can be Christmas,
Easter, and Thanksgiving all rolled into one, but in my opinion, the
President would not touch this with a 10-foot pole, so do not rely on
any prospect of Executive clemency.” 28 McCord testified Hunt also
told him that Executive clemency would be granted and “spoke in
terms as though it had already been committed.” 29 McCord said these
assurances from Hunt were made in late September or October while
Hunt and McCord were at the courthouse. 30
McCord stated that discussions involving Executive clemency also
occurred with Hunt’s wife, and that, from September to December,
Mrs. Hunt pressured McCord to remain silent and accept the proposal
for Executive clemency, which he declined. McCord was told that simi-
lar proposals were made to Barker, Gonzales, Martinez, Sturgis and
Liddy. 31
More direct promises of Executive clemency came to McCord after
he sent an anonymous letter on December 31 to Jack Caulfield, which
dramatically warned that : “If Helms goes and if the Watergate opera-
tion is laid at the CIA’s feet, where it does not belong, every tree in
the forest will fall. It will be a scorched desert. The whole matter is
26 The Federal indictment issued on March 1, 1974, relating to the coverup of the Water-
gate affair alleges that, as part of a conspiracy to obstruct justice, offers of Executive
clemency were made to McCord, Hunt, Magruder, and Liddy. (See indictment p. 7.)
27 6 Hearings 2608.
28 1 Hearings 303.
29 1 Hearings 150.
30 1 Hearings 131.
31 McCord DNC deposition, May 1, 1973, pp. 301-2. On March 21, Dean told the President
that “You are going to have a clemency problem with the others.” (Edited Presidential
Conversations, p. 205.)
64
at the precipice now. J ust pass the message that if they want it to
blow, they are on exactly the right course. I am sorry that you will
get hurt in the fall-out.” 32 McCord had become increasingly alarmed
over what he considered efforts by his attorney and persons at CRP
and the White House to have him falsely assert, as a defense to the
criminal charges against him, that the break-in was part of a CIA
mission. 33
Caulfield, who believed the letter came from McCord, immediately
telephoned its contents to Dean’s assistant, Fred Fielding, and later
gave the letter to Dean. Dean discussed the problem with Paul O’Brien.
O’Brien reported the matter to Mitchell who directed O’Brien to have
Caulfield determine McCord’s intentions. 34 On January 8, 1973, Dean
asked O’Brien to communicate to McCord’s lawyer that a friend of
McCord’s would contact McCord, which O’Brien did. O’Brien also
told Hunt’s lawyer, Bittman, about the conversation with Dean. 33
Later that day, McCord and Alch visited Bittman’s office and, after
Alch met with Bittman alone, Alch told McCord that he would receive
a call that evening from a White House “friend.” 36
The initial contact with McCord was made by Caulfield through
Tony Ulasewicz, who telephoned McCord in the early morning hours
of January 9, 1973, and told him to go to a nearby phone booth to
receive a message. McCord complied and heard a voice, unfamiliar to
him, say :
“Plead guilty. One year is a long time. You will get Execu-
tive clemency. Your family will be taken care of and when
you get out, you will be rehabilitated and a job will be found
for you. Don’t take immunity when called before the grand
jury. 37
After delivering the message, Ulasewicz reported McCord’s apparent
satisfaction to Caulfield. 38
In the meantime, according to Dean, O’Brien and Mitchell both
contacted Dean and told him that, since Hunt had received an assur-
ance of Executive clemency (as discussed below), McCord and the
others were similarly entitled. Mitchell and O’Brien felt Caulfield
could most effectively carry that message to McCord. 39 Dean testified
that he called Caulfield, told him to see McCord in person, and gave
him a clemency message for McCord similar to the one transmitted to
Hunt through Bittman. 40 Mitchell’s testimony before the committee
indicated he knew in January 1973 that Dean asked Caulfield to talk
to McCord to ascertain McCord’s plans, but Mitchell does not remem-
ber contemporaneously learning that Caulfield had offered McCord
clemency. 41
Caulfield arranged a meeting with McCord on the George Washing-
ton Parkway in Virginia (the first of several) through another tele-
phone call from Ulasewicz to McCord at the telephone booth near
33 3 Hearings 1235.
33 1 Hearings 193.
34 3 Hearings 974.
35 O’Brien interview, May 31, 1973, p. 5.
36 1 Hearings 135, 150.
37 1 Hearings 135.
38 1 Hearings 254—55.
39 3 Hearings 975.
40 3 Hearings 975.
41 4 Hearings 1632.
65
McCord’s home. This meeting took place on January 12. 42 McCord
testified that Caulfield then urged him to plead guilty, receive clemency
and be rehabilitated afterward. According to McCord, Caulfield said
that he carried the clemency message “from the very highest levels of
the White House.” 43 McCord said he was told by Caulfield that the
President would be apprised of the meeting and that Caulfield said “I
may have a message to you at our next meeting from the President
himself.” 44
Caulfield testified that, on January 13, Dean advised him to stress
to McCord the sincerity of the clemency offer. When Caulfield asked
if the offer came from the President, Dean replied it came “from the
top.” Caulfield said that he assumed this implied Ehrlichman speaking
for the President, because Dean rarely made decisions without
Ehrlichman’s input. Caulfield, however, never had personal discus-
sions with the President on this matter and had no personal knowl-
edge that the President authorized a clemency offer to McCord. 45
On January 14 Caulfield again met with McCord on the George
Washington Parkway and told McCord that his efforts to develop, as
a defense to the criminal charges against him, his claims of Govern-
ment wiretaps of certain phone calls he had made to foreign embassies
would not be successful. McCord became very concerned and was as-
sured that he would receive clemency after 10 or 11 months’ imprison-
ment. Caulfield on this occasion told McCord :
The President’s ability to govern is at stake. Another Tea-
pot Dome scandal is possible and the Government may fall.
Everybody else is on track but you, you are not following the
game plan, get closer to your attorney. 46
There followed two telephone conversations on January 15 and
J anuary 16, during which McCord indicated to Caulfield that he had
no desire to talk to him further and suggested that, if the White
House wanted to be honest, it should look into McCord’s perjury
charges against Magruder and his claims as to the tapping of his two
embassy calls. 47 However, a final meeting was arranged between Mc-
Cord and Caulfield on the George Washington Parkway for January
25. McCord testified that, at this meeting, Caulfield repeated the offers
of clemency, financial support and rehabilitation. According to Mc-
Cord, Caulfield discouraged his hopes for White House action on his
wiretap defense and cautioned him that, if he made public allegations
against high administration officials, the administration would un-
doubtedly defend itself. McCord interpreted this as a “personal
threat” to his safety, but stated his willingness to take the risk. 48
Caulfield testified that, in this final meeting, he concluded that Mc-
Cord was definitely going to speak out on the Watergate burglary and
would probably make allegations against White House and other
high officials. 49 Caulfield said he told McCord, “Jim, I have worked
with these people and I know them to be as tough-minded as you and I.
42 1 Hearings 187 .
43 1 Hearings 138 , 228 .
44 1 Hearings 138 .
45 1 Hearings 250 - 57 , 266 , 273 - 74 .
46 1 Hearings 139 - 40 , 152 .
47 1 Hearings 140 .
48 1 Hearings 140 - 41 , 260 .
49 1 Hearings 260 .
35-687 0 - 74 -7
66
When you make your statement, don’t underestimate them. If I were
in your shoes, I would probably be doing the same thing.” 50
2. REPRESENTATIONS TO HOWARD HUNT
On December 8, 1972, Hunt’s wife, Dorothy, died in an airplane
crash in Chicago. Three weeks later, on December 31, Hunt sent a
letter to Colson that stated :
I had understood you to say that you would be willing to
see my attorney, Bill Bittman, at any time. After my wife’s
death, I asked him to see you, but his efforts were unavailing.
And though I believe I understand the delicacy of your overt
position, I nevertheless feel myself even more isolated than
before. My wife’s death, the imminent trial, my present men-
tal depression, and my inability to get any relief from my
present situation, all contribute to a sense of abandonment by
friends on whom I had in good faith relied. I can’t tell you
how important it is under the circumstances, for Bill Bittman
to have the opportunity to meet with you, and I trust that you
will do me that favor.
There is a limit to the endurance of any man trapped in a
hostile situation and mine was reached on December 8. I do
believe in God — not necessarily a Just God but in governance
of a Divine Being. His Will, however, is often enacted
through human hands, and human adversaries are arraigned
against me. 51
Colson sent Dean a copy of the letter with a note that asked, “Now
what the hell do I do?” 52
Dean testified that on January 2, 1973, Paul O’Brien called him and,
with some urgency, requested that Dean meet with him concerning
serious problems with Hunt. When Dean met with O’Brien that eve-
ning, O’Brien told Dean that Hunt wished to plead guilty but, before
changing his plea, Hunt wanted White House assurance of Executive
clemency. 53 On January 3, Colson called Dean to say that he did not
want to meet with Bittman. Dean testified he went to Ehrlichman and
told him the situation. Ehrlichman, according to Dean, asked Colson
to meet with Bittman, which Colson did. 54
After meeting with Bittman that same day, Colson met with Dean
and Ehrlichman in Ehrlichman’s office. Dean testified that Colson
was upset and said it was imperative to offer Hunt Executive clem-
ency. Dean said Ehrlichman indicated he would speak to the President
about it and directed Colson not to address the President on the sub-
ject. 55 Ehrlichman testified that, at this meeting, he told Dean and
Colson of his July 1972 conversation with the President where the
President had stressed that no one in the White House was to discuss
or offer clemency. 56
60 1 Hearings 266.
61 Exhibit 153, 9 Hearings 3892.
52 3 Hearings 1053.
53 3 Hearings 9T3-74.
54 3 Hearings 973, 1053.
55 3 Hearings 973. 1079.
50 6 Hearings 2608-9.
67
The next day, according to Dean, Ehrlichman confided to Dean that
he had given Colson an affirmative answer regarding clemency for
Hunt and that Colson had again met with Bittman. On January 5,
Colson reported his second meeting with Bittman to Ehrlichman
and Dean. Colson said he gave Bittman a “general assurance” respect-
ing clemency, rather than a firm commitment, saying that although a
year is a long time, clemency usually comes around Christmas. 57 Dean
said he expressed the feeling that the other defendants would expect
the same type of arrangement and that Ehrlichman said the same
assurance would apply to all. 58 According to Dean, Colson, after the
meeting, told Dean he had ignored Ehrlichman’s instructions and dis-
cussed clemency with the President. 59
Ehrlichman confirms that in January he met with Colson and Dean
to discuss the Hunt-Bittman request for help. Ehrlichman said the
main purpose of the meeting was to attempt to deal with Hunt’s de-
pressed state of mind and to determine how best to aid him. But,
Ehrlichman testified, he made it clear to Colson that under no cir-
cumstances could Executive clemency be offered Hunt. 60 His version
of the January 5 meeting was that Colson gave Dean and Ehrlichman
“the strongest kinds of assurances that he had not made any sort of
commitment.” 61 However, Hunt did change his plea to guilty at the
opening of the trial on J anuary 10. 62
The edited Presidential transcripts reveal that the following com-
ments and recollections regarding clemency to Hunt were made at
the March 21, 1973, meeting among the President, Haldeman and
Dean, before Hunt, was sentenced :
D. . . . Here is what is happening right now. What sort of
brings matters to the (unintelligible). One, this is going to
be a continual blackmail operation by Hunt and Biddy and
the Cubans. No doubt about it. And McCord, who is another
one involved. McCord lias asked for nothing. McCord did ask
to meet with somebody, with Jack Caulfield who is his old
friend who had gotten him hired over there. And when Caul-
field had him hired, he was a perfectly legitimate security
man. And he wanted to talk about commutation, and things
like that. And as you know Colson has talked indirectly to
Hunt about commutation. All of these things are bad, in that
they are problems, they are promises, they are commitments.
They are the very sort of thing that the Senate is going to be
looking most for. I don’t think they can find them, frankly.
P. Pretty hard.
D. Pretty hard. Damn hard. It’s all cash.
P. Pretty hard I mean as far as the witnesses are concerned.
[pp. 188-89.] [Emphasis added.]
* if: sf: * if:
57 3 Hearings, 973-74. Mitchell testified that, early in 1973, he learned of meetings where
Executive clemency was discussed between Hunt’s lawyer and Colson, (4 Hearings 1632.)
58 3 Hearings 974, 1079.
59 3 Hearings 974 : 4 Hearings 1484.
80 7 Hearings 2770—71, .
81 6 Hearings 2610.
62 Watergate trial transcript, p. 91.
68
P. ... As a matter of fact, there was a discussion with some-
body about Hunt’s problem on account of his wife and I
said, of course communtation could be considered on the basis
of his wife’s death, and that is the only conversation I ever
had in that light.
D. Right, [p. 192.]
P. ... You have the problem with Hunt and his clemency.
D. That’s right. And you are going to have a clemency
problem with the others. They all are going to expect to be
out and that may put you in a position that is just untenable
at some point. You know, the Watergate Hearings just over,
Hunt now demanding clemency or he is going to Mow. And
politically, it’s impossible for you to do it. You know, after
everybody
P. That’s right !
D. I am not sure that you will ever be able to deliver on
the clemency. It may be just too hot.
P. You can’t do it politically until after the ’7k elections ,
that’s for sure. Your point is that even then you couldn’t
doit.
D. That’s right. It may further involve you in a way you
should not be involved in this.
P. No — it is wrong that’s for sure, [p, 206-7.]
* * * ^ *
P. . . . And the second thing is, we are not going to be able
to deliver on any of a clemency thing. You know Colson has
gone around on this clemency thing with Hunt and the rest?
D. Hunt is now talking about being out by Christmas.
H. This year ?
D. This year. He was told by O’Brien, who is my conveyor
of doom back and forth, that hell, he would be lucky if he were
out a year from now, or after Ervin’s hearings were over.
He said how in the Lord’s name could you be commuted
that quickly? He said, “Well, that is my commitment from
Colson.”
H. By Christmas of this year ?
D. Yeah.
H. See that, really, that is verbal evil. Colson is — that is
your fatal flaw in Chuck. He is an operator in expediency,
and he will pay at the time and where he is to accomplish
whatever he is there to do. And that, and that’s — I would
believe that he has made that commitment if Hunt says he
has. I would believe he is capable of saying that.
P. The only thing we could do with him would be to parole
him like the (unintelligible) situation. But you couldn’t buy
clemency. [pp. 226-27.] [Emphasis added.]
Another relevant discussion occurred on April 14, 1973, when the
President met with Haldeman and Ehrlichman. In a discussion of
the possibility of Executive clemency the President said:
69
It’s a shame. There could be clemency in this case and at
the proper time having in mind the extraordinary sentences
of Magruder, etc., etc., but you know damn well it is ridicu-
lous to talk about clemency. They all knew that. Colson
knew that. I mean when you [Ehrlichman] talked to Colson
and he talked to me. 63 [Emphasis added.]
Dean met again with the President on April 15, 1973. By this time,
Dean had retained counsel, gone to the U.S. Attorney’s office and
begun to give information about the coverup. Dean testified he was
somewhat shaken wdien he went to the meeting because he was acting
to end the coverup and knew there would be serious problems for the
President. 64 Dean said the most interesting event of the meeting came
near the very end. He said the President “got up out of his chair,
went behind his chair to the corner of the Executive Office Building
office and in a nearly inaudible tone said to me he was probably foolish
to have discussed Hunt’s clemency with Colson.” 65 It was this conduct
that led Dean to believe that this conversation was taped.. As the
committee learned later, there was, indeed, a taping system in opera-
tion. However, the President has informed the U.S. District Court
for the District of Columbia that, unknown to the President at the
time, the recorder’s tape had “run out” just prior to the President’s
meeting with Dean and that the meeting 'was thus not recorded. 66
Subsequently, in an April 16, 1973, meeting, the President and
Dean again discussed the subject of Executive clemency for Hunt:
D. All the obstruction is technical stuff that mounts up.
P. Well, you take, for example, the clemency bit. That is
solely Mitchell apparently and Colson’s talk with Bittman
where he says he will do everything I can because as a friend.
D. No, that was with Ehrlichman.
P. Hunt?
D. That was with Ehrlichman.
P. Ehrlichman with whom ?
D. Ehrlichman and Colson and I sat up there. Colson pre-
sented his story to Ehrlichman regarding it and then John
gave Chuck very clear instructions on going back and telling
him. “Give him the inference he’s got clemency but don’t
give him any commitment.”
P. No commitment.
D. Bight.
P. That’s alright. No commitment. I have a right to say
here — take a fellow like Hunt or a Cuban whose wife is sick
or something and give them clemency for that purpose —
isn’t that right ?
D. That’s right.
P. But John specifically said “No commitment”, did he?
D. Yes.
03 Edited Presidential Conversations, p. 544.
64 3 Hearings. 1015.
65 3 Bearings 1017.
86 In re: Siibpenas Duces Tecum Issued to President Richard M. Nixon (D.D.C. Mise.
Nos. 47-73) transcript of proceedings, p. 21. During another April 15, 1973, meeting, before
the recorder’s tape “ran out,” the President indicated to Ehrlichman he was aware that
Hunt and Bittman could provide a link to Colson “up to his navel.” [Edited Presidential
Conversations, p. 672.]
70
P. And then Colson went on apparently to
D. T don’t know how Colson delivered it
P. To Hunt’s lawyer — isn’t that your understanding ?
D. Yes, but I don’t know what he did or how
P. Where did this business of the Christmas thing get out,
John ? What in the hell is that all about it ? That must have
been Mitchell, huh ?
D. No, that was Chuck again.
P. That they would all be out by Christmas ?
D. No, I think he said something to the effect that Christ-
mas is the time the clemency generally occurs.
P. Oh yeah. Well, I don’t think that is going to hurt him.
Do you ?
D. No.
P. Clemency is one thing. He is a friend of Hunt’s. I am
just trying to put the best face on it, but if it is the wrong
thing to do I have to know. [pp. 811-12.]
3. REPRESENTATION S TO JEB MAGRUDER
Dean testified that on August 16, 1972. Magruder, concerned oyer his
upcoming grand jury appearance, asked him, “What happens if this
whole thing comes tumbling down? Will I get Executive clemency
and will my family be taken care of ?” 67 Dean told Magruder that “I
a, m sure you will,” but Magruder did not consider that statement to
be a firm offer of Executive clemency. 68
On March 23, 1973, Chief Judge Sirica read aloud the sealed letter
received from McCord. As noted, the letter charged that pressure had
been exerted on the defendants to plead guilty and remain silent, that
perjury had been committed during the Watergate trial and that others
than those adjudged guilty had participated in the Watergate opera-
tion. McCord indicated his desire to meet with Judge Sirica and
elaborate further on his assertions. He stated that he lacked confidence
in the FBI, the Department of Justice, and other such “Government
representatives,” and thus did not want to present his information to
them. McCord, however, was willing to speak to representatives of
the Select Committee.
McCord’s letter caused Magruder concern regarding his previous
testimony. 69 On March 25, Magruder presented his situation to CRP
lawyers and they advised him to retain counsel. 70 Magruder testified
that the lawyers apparently transmitted his concern to Mitchell be-
cause, on March 27, Mitchell phoned Magruder and asked Magruder
to meet with him in New York. 71 Magruder flew T there that day and
told Mitchell his worries. As Magruder recalled it, Mitchell assured
him “he would take care of things, that everything would be taken
care of.” According to Magruder. “everything” included a guaranteed
salary and Executive clemency. 72 Mitchell confirmed the meeting with
Magruder, as well as Magruder’s discussion of the potential perjury
67 4 Hearings 1444.
68 Ibid.
69 2 Hearings 806.
79 Ibid .
71 2 Hearings 806-7.
72 2 Hearings 807.
71
charge against him. 73 While Mitchell recalled offering to help
Magruder “in any conceivable way,” he denied promising clemency. 74
Mitchell also testified that, in their March 27 meeting, Magruder
requested further assui’ance from someone still in the White House
and Mitchell suggested a meeting with Haldeman. 75 Magruder testi-
fied that in January, when he became concerned he might be made
a scapegoat, he went to Haldeman and said, “I just want you to know
that this whole Watergate situation and other activities was a con-
certed effort by a number of people, and so I went through a literal
monologue on what had occurred.” 76 However, Haldeman testified :
“At no meeting with Magruder did he raise with me a monologue as
he has described.” 77
Dean testified that on March 28 Haldeman called him at Camp David
and asked him to return to Washington to meet with Mitchell and
Magruder. Although Dean resisted, Haldeman persuaded him to
participate. 78 Dean said his meeting with Haldeman, Mitchell, and
Magruder concerned how Dean planned to testify, if called before an
appropriate body, regarding the January 27 and February 4, 1972,
meetings in Mitchell’s office. Dean said he would not agree to help
support the perjured testimony already given by Magruder in this
regard. 79 Mitchell testified that, at the meeting, Haldeman offered to
help Magruder as a friend, but made no other commitments. 80 Ma-
gruder recalled that Haldeman was careful to articulate that he
“could make no commitments for the President.” 81 Because of Dean’s
stand and the advice of CEP lawyers, Magruder decided to retain
personal counsel. 82
The transcript of an April 14, 1973, meeting among the President,
Haldeman, and Ehrlichman indicates the President’s view as to how
an inference of Executive clemency could be given to Magruder in
return for his claiming ultimate responsibility (along with Mitchell)
for the Watergate affair :
P. I would also, though, I’d put a couple of things in and
say, Jeb, let me just start here by telling you the President
holds great affection for you and your family. I was just
thinking last night, this poor kid
H. Yeah, beautiful kids.
P. Lovely wife and all the rest, it just breaks your heart.
And say this, this is a very painful message for me to bring —
I’ve been asked to give you, but I must do it and it is that :
Put it right out that way. Also I would put that in so he knows
I have personal affection. That's the way the so-called clem-
ency's got to he handled. Do you see John ?
E. I understand.
H. Do the same thing with Mitchell. 83
[Emphasis added.]
73 4 Hearings 1633.
74 4 Hearings 1634.
73 4 Hearings 1634.
76 2 Hearings 806.
77 7 Hearings. 2887.
78 3 Hearings 1005.
79 3 Hearings 1006.
80 4 Hearings 1634.
81 2 Hearings 807.
83 2 H[ earing 8 808
83 Edited Presidential Conversations 502-03. See also id. at 439, 442, 451, 459, 501, where
the need to have Magruder and Mitchell present a congruent false story is discussed.
72
4. REPRESENTATIONS TO G. GORDON LIDDY
The edited Presidential transcripts contain a reference to a pur-
ported promise by Mitchell of a pardon or clemency to Liddy. The
following passage is from the April 14, 1972, meeting among the
President, Haldeman, and Ehrlichman:
P. He’s not talking because he thinks the President doesn’t
want him to talk ? Is that the point ?
E. He’s — according to them, Mitchell’s given him a promise
of a pardon.
P. Bittman ?
E. According to Colson and Shapiro.
P. I don’t know where they get that. Mitchell has promised
Liddy a pardon ?
E. Yes, sir. [p. 412.]
On pages 485-87, the following colloquy from the same meeting
appears :
P. Colson to Bittman. I guess that’s the only thing we have
on that — except Mitchell, apparently had said something
about clemency to people.
H. To Liddy.
P. And Mitchell has never, never — Has he ever discussed
clemency with you ?
E. No.
P. Has he ever discussed it with you ?
H. No.
P. (Unintelligible.) We were all here in the room.
H. Well, may have said, “Look we’ve got to take care of
this.”
P. But he’s never said, “Look you’re going to get a pardon
from these people when this is over.” Never used any such
language around here, has he, John ?
E. Not to me.
H. I don’t think so.
P. With Dean has he ?
E. Well, I don’t know. That’s a question I can’t answer
P. Well, but Dean’s never raised it. In fact, Dean told me
when he talked about Hunt. I said, John, “where does it all
lead?” I said, what’s it going to cost. You can’t just continue
this way. He said, “About a million dollars.” (Unintelligible)
I said, John, that’s the point. (Unintelligible) Unless I could
get them up and say look fellows, it’s too bad and I give you
Executive clemency like tomorrow, what the hell do you
think, Dean?
P. I mean, you think, the point is, Hunt and the Cubans
are not going to sit in jail for 4 years and they are not being
taken care of ?
H. That’s the point. Now where are you going to get the
money for that ?
P. That’s the reason this whole thing falls apart. It’s
that — It’s that that astonishes me about Mitchell and the rest.
E. Big problem.
[Material unrelated to Presidential actions deleted.]
73
P- The word never came up, but I said, “I appreciate what
you’re doing.” I knew it was for the purpose of helping the
poor bastards through the trial, but you can’t offer that John.
You can’t — or could you? I guess you could. Attorneys’ fees?
Could you go a support program for these people for four
years?
E. I haven’t any idea. I have no idea. 84
5. CONSIDERATION OF CLEMENCY FOR DEAN AND MITCHELL
Comments by the President, at an April 14, 1973, meeting with
Ehrlichman, indicated he considered Executive clemency for Dean
and Mitchell in return for Dean’s and Mitchell’s cooperation in the
Watergate affair:
P. . . . one point, you are going to talk to Dean ?
E. I am.
P. What are you going to say to him ?
E. Well to get off this passing the buck business.
P. J ohn, that’s
E. It is a little touchy and I don’t know how far I can go.
P. John, that is not going to help you. Look he [Dean] has
to look down the road to one point. There is only one man who
could restore him to the ability to practice law in case things
go wrong. He’s got to have that in the back of his mind.
' E. TTh, huh.
P. He’s got to know that will happen. You don’t tell him,
but you know and I know that with him and Mitchell there
isn’t going to be any damn question, because they got a bad
rap. 85
M. Activities Relating to Other Investigations and
Court Proceedings
White House and CRP officials were also concerned that other in-
vestigations besides the grand jury proceeding might uncover the
true facts relating to the Watergate break-in.
1. THE PATMAN HEARINGS
On August 19, 1972, Representative Wright Patman, Chairman of
the House Banking and Currency Committee, ordered his committee
staff to investigate the President’s campaign finances, including the
checks deposited in Barker’s account. By early September, White
House concern over the Patman Committee’s investigation had
mounted. Dean testified that, from the beginning of this probe, the
White House had two major fears: “First, the hearings would have
resulted in more adverse pre-election publicity regarding Watergate
and, second, they just might stumble into something that would start
unraveling the coverup.” 86
84 See also, 3 Hearings 975 ; 7 Hearings 2801.
85 Edited Presidential Conversations, pp. 668—69.
m 3 Hearings 953—59. See also. Edited Presidential Conversations, pp. 67-69, which con-
cern the meeting of September 15, 1972. among the President. Haldeman and Dean and show
substantial conversation between the President and Dean as to how to deal with the prob-
lems posed by these hearings.
74
According to Dean, CEP counsel Parkinson was put in touch with
Congressman Garry Brown, a committee member, to persuade Brown
to help limit the scope of the committee’s hearings. On September 8,
Brown sent a letter to Attorney General Kleindienst which, according
to Dean, Parkinson had drafted. 87 The letter inquired as to the
propriety of Stans’ testimony before the committee, scheduled for
September 14, in view of pending civil and criminal suits. Congressman
Brown has filed a sworn statement with the committee denying that
Parkinson drafted this letter, and Dean’s statement, admittedly based
on hearsay, has not been corroborated. 88 The committee has found no
evidence that Congressman Brown committed any improprieties.
The Justice Department, according to Dean, declined at this time
to recommend that Stans not be required to testify, being of the view
such a suggestion would appear part of a concerted effort to block the
hearings. Nonetheless, Parkinson informed the committee that Stans
would not appear in order to avoid prejudicing pending criminal
investigations. 89
In the last week of September, Dean took an active role in White
House efforts to hinder the work of the Patman investigation. After
Patman announced on September 25 that he would hold a vote on
October 3 on issuing subpenas to witnesses, Haldeman suggested that
Dean talk to John Connally about blocking the committee’s hearings.
Connally, Dean said, responded that Patman’s only “soft spot” was a
rumor that he had not reported large contributions from lobbyists.
Dean then asked Parkinson to investigate the reports filed by members
of the committee with the Clerk of the House concerning campaign
contributions. Parkinson furnished such a report on September 26,
which Dean said he did not use.
Dean next persuaded Henry Petersen, Chief of the Criminal Divi-
sion of the Department of Justice, to write committee members to
dissuade them from issuing subpenas. 90 Petersen, in an October 2
letter to the members, asked that they delay their investigation because
it might jeopardize fair criminal trials. 91 On October 3, the committee
voted not to hold hearings. 92
However, on October 10, Patman announced that his committee
would convene in 2 days in another attempt to investigate the Water-
gate affair. Patman requested Dean, Mitchell, MacGregor and Stans
to appear. 93 Dean declined to appear, claiming executive privilege.
The others declined on advice of counsel and Patman did not recon-
vene the committee.
2. TUB CIVIL SUITS
A counteroffensive was likewise mounted regarding the civil suits
brought by the Democratic National Committee against CEP. Dean
testified that, around September 9 or 10, both Haldeman and Colson
relayed to him a request from the President that, a counteraction be
filed against the Democrats “as quickly as humanly possible.” 94 On
September 13, CEP filed a $2,500,000 countersuit against the DNC
87 3 Hearings 959.
88 Exhibit 69, 4 Hearings 1791.
89 3 Hearings 959—60.
00 3 Hearings 960-62.
91 3 Hearings 1194.
92 3 Hearings 962.
93 3 Hearings 962.
94 3 Hearings 956.
75
for abuse of process and, on September 14, Stans brought a $5 million
libel suit against Lawrence O’Brien, DNC chairman.
Dean testified that, when he met with the President on September 15,
the various civil cases were discussed. Dean stated he told the President
that CRP lawyers were handling both the DNC suit and one filed by
Common Cause. He said Judge Ritchie had been helpful in slowing
down these civil cases. The President was informed as to the status
of the CRP abuse of process suit and the Stans libel action. Halde-
man’s testimony and the edited transcripts support Dean’s testimony
in this regard. 95 The edited transcripts, at p. 60, contain the following
exchange :
D. You might be interested in some of the allocations we
got. The Stans’ libel action was assigned to Judge Ritchie.
P. (Expletive deleted.)
D. Well now that is good and bad. Judge Ritchie is not
known to be one of the (inaudible) on the bench, that is con-
sidered by me. He is fairly candid in dealing with people
about the question. He has made several entrees off the
bench — one to Kleindienst and one to Roemer McPhee to keep
Roemer abreast of what his thinking is. He told Roemer he
thought Maury ought to file a libel action.
P. Did he ? 96
H. Can he deal with this concurrently with the court case ?
D. Yeah. The fact that the civil case drew to a halt — that
the depositions were halted he is freed.
II. It was just off for a few days, wasn’t it?
D. It did more than that- — he had been talking to Silbert,
one of the Assistant U.S. Attorneys down here. Silbert said,
“We are going to have a hell of a time drawing these indict-
ments because these civil depositions will be coming out and
the Grand Jury has one out on this civil case but it is nothing
typical.
3. CIA INVESTIGATIVE MATERIALS
According to Dean, shortly after the Select Committee was created,
Ehrlichman urged him to have the CIA retrieve from the Department
of Justice certain photographs which came from a CIA camera sup-
plied Hunt that Hunt had returned to the Agency. The pictures in-
cluded one of Liddy posed in front of Dr. Fielding's office which was
burglarized. 97 Dean said Ehrlichman wanted the photographs and ac-
companying documents retrieved “before the Senate investigators
got a copy of the material.” 98
Dean further testified he sought to obtain the photographs from
Henry Petersen, claiming they had nothing to do with Watergate.
Petersen told Dean that the Justice Department had received a letter
from Senator Mansfield asking preservation of all evidentiary ma-
terials that might have any relationship to Watergate. Petersen stated
he would be willing to return the materials to the CIA, if it requested
95 3 Hearings 958 ; 7 Hearings 2888-89 ; Edited Presidential Conversations, pp. 60-61,
74-75.
98 The purported House version has the President adding the comment ‘'Good” after the
above question.
07 3 Hearings 977—78.
98 3 Hearings. 978.
76
such action, and leave a card in the Department’s file indicating what
he had done." Subsequently, General Walters of the CIA visited Dean
to state that he was opposed to retrieving the material under those cir-
cumstances and the idea was dropped. 1
4. OTHER ACTIVITIES RELATING TO THE SELECT COMMITTEE
Evidence received by the Select Committee demonstrates consider-
able concern on the part of certain White House officials as to how to
deal with the Select Committee, which, Dean said, was viewed as an un-
controllable, if not hostile, body that presented new and possibly more
dangerous problems than the criminal trials. 2
a. The La Costa Meeting
A major meeting of White House officials to develop strategy regard-
ing the Select Committee took place at the La Costa Resort Hotel,
south of San Clemente, on February 10 and 11, 1973. Attending
the meeting were Haldeman, Ehrlichman, Dean and Richard Moore. 3
Dean stated that the meeting at La Costa was wide-ranging, involving
an evaluation of Select Committee members and the White House
strategy for dealing with the committee. 4 According to Dean, the
basic strategy was :
The White House will take a public posture of full coopera-
tion but privately will attempt to restrain the investigation
and make it as difficult as possible to get information and wit-
nesses. A behind-the-scenes media effort would be made to
make the Senate inquiry appear very partisan. The ultimate
goal would be to discredit the hearings and reduce their im-
pact by attempting to show that the Democrats have engaged
in the same type of activities. 5
Dean said a special program was planned to handle press coverage
of the Senate hearings. Haldeman, he said, suggested that Pat Bu-
chanan be used as a press watchdog. Buchanan would prepare speeches
on biased press coverage, write op-ed articles, attend the hearings
and be the White House spokesman to take pressure off Ronald Ziegler
in his daily briefings. 6 Moore and Haldeman, however, recollect that
it was Dean who suggested this role for Buchanan. 7
Special plans were made as to CRP activities regarding the hear-
ings. It was decided that CRP would increase its legal and public
relations staff and that Paul O’Brien and Ken Parkinson would be
responsible for handling CRP witnesses called to testify. 8 Ehrlichman
testified it was generally concluded that CRP, with Mitchell returning
as its head, would operationally be the best entity to deal with the
Select Committee hearings. 9
99 3 Hearings 978.
1 3 Hearings 979.
2 3 Hearings 980-81.
3 3 Hearings 982.
4 3 Hearings 983-84.
5 3 Hearings 984.
6 3 Hearings 985.
7 5 Hearings 1941 ; 7 Hearings 2891.
8 3 Hearings 985.
9 7 Hearings 2850.
77
Dean said that toward the end of the meeting on February 11 Ehr-
lichman raised the “bottom line” question : “Would the seven Water-
gate defendants remain silent through the Senate hearings?” 10 This
was important, Dean said, since their entire strategy rested on the
continued silence of the Watergate defendants. Dean told Haldeman
and Ehrlichman there were still demands for more money. Richard
Moore, Dean said, was therefore assigned to go to New York to see
Mitchell “simply [to] lay it out that it was Mitchell’s responsibility
to raise the necessary funds for these men.” 11 Moore confirmed this
testimony :
Dean, in a sort of by-the-way reference, said he had been
told by the lawyers — and I think that was the way he put it,
but I cannot be precise about his language — that they may be
needing some more money, and did we have any ideas ? Some-
one said, isn’t that something that John Mitchell might handle
with his rich New York friends. It was suggested that since
I would be meeting with Mr. Mitchell I should mention this
when I saw him and I said I would. 12
Ehrlichman also confirms that Moore was sent to New York to see
Mitchell about raising money for the Watergate defendants whose
sentences were pending. 13 When Moore broached the issue with
Mitchell, Mitchell said — according to Moore — “get lost,” or “tell them
to get lost.” 14 Mitchell confirms that he declined Moore’s fundraising
suggestion. He testified that the “general tenor of the subject matter”
was that the money was for the “payment for the support and the
legal fees of the people that were involved in the Watergate.” 15
Moore, Ehrlichman and Haldeman provided further confirmation
and elaboration of Dean’s testimony concerning the La Costa discus-
sion. Moore testified that at this meeting the participants discussed
preparation for the Select Committee hearings, executive privilege,
a possible White House statement on Watergate in advance of the
hearings, manpower for CRP to cope with the hearings, and the pend-
ing lawsuits. 16
Ehrlichman testified that the La Costa meeting was called “because
the President had asked who was handling the preparation of the
White House case for the Senate Select Committee hearings, and
what planning was being done, and what was the White House posi-
tion going to be on matters like executive privilege, and there were
no answers to those questions.” 17 Ehrlichman admitted that the La
Costa group discussed steps to affect the Select Committee’s resolution
and also evaluated members of the committee. 18 He also confirmed
that a strategy to block or delay the hearings was discussed, including
a proposal to seek judicial delay. 19 Haldeman basically concurred in
Moore’s recollections of the La Costa meeting. 20 The interest of the
10 3 Hearings 985 .
11 3 Hearings 985 - 86 .
32 5 Hearings 1941 - 42 .
13 7 Hearings 2850 .
14 5 Hearings 2049 .
15 5 Hearings 1935 .
16 5 Hearings 1940 - 41 , 1964 , 1966 .
17 7 Hearings 2849 .
18 7 Hearings . 2850 .
19 7 Hearings 2850 - 51 .
20 7 Hearings 2890 .
78
White House in effecting the outcome of the Select Committee’s hear-
ings is further demonstrated by numerous passages in the edited presi-
dential transcripts where the President, Ehrlichman, Haldeman and
Dean discussed various ways to deal with the upcoming hearings to
limit the Select Committee’s effectiveness, and to “cut the losses” of
the White House. See e.g., the meeting of February 28, 1973, between
the President and Dean at pp. 55-76, which is subsequently discussed.
b. Documentary and Other Evidence Indicating the
White House Strategy
In support of his testimony concerning White House preparations
for the hearings, Dean submitted to the committee a February 9, 1973,
“Eyes Only” memorandum from Haldeman to Dean emphasizing the
need for a minority counsel to the Ervin Committee who was a “real
tiger, not an old man or a soft-head. . . .” Also, Haldeman indicated
therein that Dean would instruct Kleindienst to order the FBI to pre-
pare a file on the “1968 bugging” of candidate Richard Nixon in prepa-
ration for a counteroffensive. 21 Haldeman, under questioning, authenti-
cated this memorandum. 22
Another memorandum supplied by Dean was from Lawrence Hig-
by, Haldeman ’s assistant, to Dean, dated February 10, 1973. This docu-
ment emphasized the need “to get a thorough itemization as quickly
as possible of all the disruptions that occurred in the campaign . . .
for our Watergate tactics with the Ervin Committee.” 23
A demonstration of the strong counteroffensive Haldeman was
planning is found in a memorandum from Haldeman to Dean, dated
February 10, 1973 :
We need to get our people to put out the story on the foreign
or Communist money that was used in support of demonstra-
tions against the President in 1972. We should tie all 1972
demonstrations to McGovern and thus to the Democrats as
part of the peace movement.
The investigation should be brought to include the peace
movement which leads directly to McGovern and Teddy
Kennedy. This is a good counteroffensive to be developed. . .
We need to develop the plan on to what extent the Demo-
crats were responsible for the demonstrations that led to
violence or disruption.
There’s also the question of whether w T e should let out the
Fort Wayne story now. 24 — that we ran a clean campaign com-
pared to theirs of libel and slander such as against Rebozo,
etc.
We could let Evans and Novak put it out and then be asked
about it to make the point that we knew and the President
said it was not to be used under any circumstances. In any
event, we have to play a very hard game on this whole thing
and get our investigations going as a counter move. 26
21 Exhibit No. 34-33 ; 3 Hearings 1240.
22 8 Hearings 3203-5.
24 TI^Fort^Wayne story involved a Democratic public official’s alleged illegitimate child.
25 3 Hearings 1242.
79
Haldeman accepted responsibility for the contents of this memo-
randum. 26
Dean testified the White House feared the Senate hearing might
force the J ustice Department into further criminal investigations that
would lead back to the White House. It was important, Dean said, that
the President meet with Kleindienst and “bring [him] back in the
family to protect the White House . . .” 27 Dean indicated he felt the
President should “solicit Kleindienst’s assistance during the hearings
and, if anything should develop during the hearings, to not let all
hell break loose in a subsequent investigation.” 28 The proposed meet-
ing between the President and Kleindienst was to be a “stroking ses-
sion.” In a February 22, 1973, talking paper which Dean submitted
to Haldeman for transmittal to the President the following recom-
mendations were made respecting this proposed meeting:
Kleindienst should be asked to remain in office until at
least one full year from this date (i.e. until after the Water-
gate hearings have passed), because the hearings may well
result in a request for additional action by the Department of
Justice. We can’t afford bitterness at Justice nor can we risk
a new Attorney General being able to handle some of the
potential problems.
Kleindienst should be asked to follow the hearings closely
and keep us apprised of any potential problems from a De-
partment of Justice standpoint.
Kleindienst should be given the feeling that he is an im-
portant member of the team and it is not merely because
of these hearings that he is being asked to stay on. 20
Kleindienst confirmed that he met with President Nixon in late Feb-
ruary and that the President requested him to stay at his post until
the investigation was over. 30
Several days later, on February 28, the President personally ex-
pressed to Dean his concern over the upcoming Select Committee
hearings. The President stated his hope that the committee would
have one “big slambang thing for a whole week,” after which “interest
in the whole thing will fall off.” 31 Dean warned the President that :
I think this is going to be very different. It will be hot. I
think they are going to be tough. I think they are going to be
gory in some regards, but I am also convinced that if every-
one pulls their own oar in this thing, in all those we’ve got
with various concerns, we can make it through these things
and minimal people will be hurt. And they may even paint
themselves as being such partisans. . . . [p. 93.]
The President said he hoped the committee would “be partisan rather
than for them to have a facade of fairness and all the rest.” 32 The
February 28 meeting concluded with President Nixon telling Dean
28 8 Hearings 3180.
27 3 Hearings 989.
28 3 Hearings 989.
29 Exhibits Nos. 34-36 ; 3 Hearings 1247-48.
30 9 Hearings 3568—69.
31 Edited Presidential Conversations, p. 79.
32 Id. at p. 93.
80
that he expected Mitchell “won’t allow himself to be ruined [by
Watergate]. He will put on his big stone face [before the committee].
But I hope he does and he will.” 33 [Emphasis added.] Dean expressed
concern that the Select Committee was out to get him, a notion the
President discounted. The President, however, did indicate a belief
that the Select Committee was “after” Haldeman, Colson, or Ehrlich-
man. 34
5 . henry peteesen’s communications to the president
The edited transcripts of Presidential conversations show that
Henry Petersen, Chief of the Justice Department’s Criminal Division,
served as a conduit for a constant flow of information from the grand
jury and the prosecutors first to Dean and then to the President. The
transcripts also demonstrate that the President kept Haldeman and
Ehrlichman informed of what he learned from Petersen. Petersen’s
conduct raises a serious question as to whether high Department of
Justice officials can effectively administer criminal justice where White
House personnel, or the President himself, are the subjects of the
investigation. The conflict of interest is apparent and a committee
recommendation deals directly with this issue. (See Recommen-
dation 1, this chapter.)
Early in the Watergate investigation (in 1972) Petersen had kept
Dean informed. Dean told the President during their morning March
21 meeting that Petersen had made him “totally aware” of relevant
information with respect to the prosecutorial effort.
There is no doubt that I was totally aware of what the
Bureau [FBI] was doing at all times. I was totally aware of
what the Grand Jury was doing. I knew what witnesses were
going to be called. I knew ichat they were asked, and l had
to. 35 [Emphasis added.]
The President asked Dean: “Why did Petersen play the game so
straight with us?” Dean replied:
Because Petersen is a soldier. He kept me informed. He
told me when we had problems . where we had problems and
the like. He believed in you and he believes in this Adminis-
tration. This Administration made him. I don’t think he had
done anything improper , but he did make sure that the inves-
tigation was narrowed down to the very , very fine criminal
thing which ivas a break for us. There is no doubt about it. 33
[Emphasis added.]
Dean assured the President during this meeting that Petersen is “the
only man I know . . . that really could tell us how this could be put
together so that it did the maximum to carve it away with a minimum
of damage to individuals involved.” 37
Later, in April 1972, Petersen and the President met on several
occasions to discuss the progress of the Watergate investigation. At
one session, Petersen assured the President that the investigation would
33 Id. at p. no.
m Ibid.
35 Edited Presidential Conversations, p. 185 : Meeting of March 21, 1973.
36 Ibid.
3 7 Id. at p. 205.
81
not reach him because the Department of Justice had no jurisdiction
to investigate the President:
I’ve said to [U.S. Attorney Harold H.] Titus “We have to
draw the line. We have no mandate to investigate the Presi-
dent. We investigate Watergate.” 38
He continued :
My understanding of law is — my understanding of our
responsibilities, is that if it came to that I would have to
come to you and say, “We can’t do that.” The only people
who have jurisdiction to do that is the House of Representa-
tives, as far as I’m concerned. 39
Petersen, however, at an April IT meeting told the President that :
Mr. President, if I thought you were trying to protect
somebody, I would have walked out. 40
Petersen’s role as a conduit of secret grand jury information is il-
lustrated by his telephone conversation of April 16, 1973, with the
President (from 8:68 to 9:14 p.m.). The conversation began:
P. I just want to know if there are any developments I
should know about and, second, that of course as you know,
anything you tell me, as I think I told you earlier, will not
be passed on.
HP. I understand, Mr. President,
P. Because I know the rules of the grand jury . 41 [Emphasis
added.]
Petersen then began to relate to the President secret information
before the grand jury. He relayed to the President the factual details
of the investigation, even indicating where there were gaps. Thus he
told the President that Dean “got in touch with Kalmbaoh to arrange
for money, the details of which we really don’t know as yet.” 42
The next morning, April 17, from 9 :47 to 9 :59 a.m., the President
met with Haldeman and discussed strategy for dealing with the
Watergate affair. In the course of that conversation, the President,
who had been informed that the Justice Department did not know
the details of Kalmbach’s arrangement for money, said to Haldeman :
Another thing, if you could get John [Ehrlichman] and
yourself to sit down and do some hard thinking about what
kind of strategy you are going to have with the money. Y ou
know what I mean , 43 [Emphasis added.]
The President also told Haldeman :
Well, be sure that Kalmbach is at least aware of this, that
LaRue has talked very freely. He is a broken man. . . . 44
Petersen had informed the President on April 16, 1973, that Dean
had said that Liddy “confessed to Dean” on June 19, 1972, and that
38 Id. at p. 1259, meeting of April 27, 1973.
39 Id. at p. 1259-60.
40 Id. at p. 1086.
41 Id. at p. 966. . ,
42 Id. at 969. Earlier in the day, the President had informed Ehrlichman and Ziegler that
‘I’ve got Petersen on a short leash”. [Edited Presidential Conversations, p. 94.]
43 Edited Presidential Conversations, p. 983.
44 Ibid .
35-687 0 - 74 -8
82
I )ean then told Ehrlichman what Liddy had said. 45 The next morning
the President told Haldeman :
Dean met with Liddy on June 19th, must have been when
he did it. He was in California in January but that is irrele-
vant. But they keep banging around and banging around.
The prosecution gets out the damn stuff. Did John talk with
you about it ?
H. Yeh, he mentioned it. Dean did tell us that story in
Ehrlichman’s office last week or two weeks ago.
P. But not to go all through this.
H. I don’t think so. 46
The transcript of the President-Petersen meeting of April 17 pro-
vides another example of Petersen’s briefing the President on infor-
mation received by the prosecutors and grand jury. 47 This conversa-
tion also shows that Petersen was giving the President tactical advice
as to the posture the White House should strike during the investiga-
tion. During this conversation, the President told Petersen not to tell
him “anything out of the grand jury unless you think I need to know
it. If it corroborates something or anybody here I need to know it —
otherwise I don’t, want to know about it.” 48
The President then asked: “I guess it would be legal for me to
know ?” and Petersen responded : “Well yes, I think it is legal for you
to know.” 49 Petersen subsequently left this meeting, Haldeman and
Ehrlichman appeared and the President proceeded then to relay to
them the information obtained from Petersen. 50
At least by April 27, Petersen’s constant contact with the White
House created suspicions among the Department of Justice Watergate
investigators. Petersen admitted to the President on April 27 :
We had a kind of crisis of confidence night before last. . . .
And in effect it concerned me — whether or not they were at
ease with my reporting to you, and I pointed out to them that
I had very specific instructions, discussed that with them
before on that subject. ... As a consequence — I kind of laid
into [Harold] Titus yesterday and it cleared the air a little
bit, but there is a very suspicious atmosphere. They are con-
cerned and scared. . . , 51
N. The Beginning of the Unraveling of the Coverup
The coverup began publicly to unravel when McCord broke his
silence on March 21, 1972, with his letter to Judge Sirica which was
read in open court on March 23. It was soon learned that McCord had
accused Magruder of perjury and Mitchell, Magruder and Dean of
participating in planning the Watergate break-in. Even before Mc-
Cord broke his silence, Magruder and Dean were concerned about the
viability of the coverup. Magruder, according to his testimony, ex-
pressed his concerns to Haldeman as early as January 1973, and to
43 Id. at p. 974.
46 Id. at p. 982.
47 Id. at p. 1060, et seq.
48 I <1. at 1060.
49 Id. at 1061.
68 Id. at p. 1115 et seq.
81 Id. at p. 1258.
83
Mitchell and Dean in March ; Dean voiced his fears to the President
on several occasions.
1. THE FEBRUARY 28 MEETING
According to Dean, he met with the President on February 28, 1973,
and, after discussion of a number of matters, informed him that he
(Dean) was involved in the post- June 17 activities regarding Water-
gate. “I briefly described to him why I thought I had legal problems,
and that I had been a conduit for many of the decisions that were made
and, therefore, could be involved in an obstruction of justice.” Dean
said the President did not accept his analysis, wanted no details and
told him not to worry because he had no legal problems. 52
The edited Presidential transcript of this meeting does not, in sig-
nificant respects, bear out Dean’s recollection of this meeting. However,
in Dean’s meeting with the President on March 21, he did tell the
President that he could go to prison for obstruction of justice since he
was acting as a conduit in the payments of money to the defendants.
The President discounted this possibility, as Dean has testified, on the
ground that Dean was acting as a lawyer. 53 This conversation is quite
similar to the one Dean testified took place on February 28 and it thus
appears, from these unauthenticated transcripts, that Dean placed
this discussion with the President on the wrong date when he testified
before the Select Committee. Nonetheless, there are certain statements
during the February 28th meeting that can be construed as referenc-
ing the coverup then in progress :
P. I feel for those poor guys in jail, particularly for Hunt
and with his wife dead.
D. Well there is every indication they are hanging in tough
light now.
P. What the hell do they expect though ? Do they expect
clemency in a reasonable time ? What would you advise on
that ?
D. I think it is one of those things we will have to watch
very closely. For example,
P. You couldn’t do it, say, in six months.
D. No, you couldn’t. This thing may become so political as
a result of these hearings that it is a vendetta. This judge may
go off the deep end in sentencing, and make it so absurd that
it’s clearly injustice, that they have been heavily [p. 102.]
* * * * *
D. Well I was — we have come a long road on this thing
now. / had though t it was an impossible task to hold together
until after the election until things started, falling out , but we
ha ve made it this far and I am convinced we are going to make
it the whole road and put this thing in the funny pages of
history books rather than anything serious because actu-
ally — .
P. It will be somewhat serious but the main thing, of course
is also the isolation of the President.
53 3 Hearings 992-93,
53 Edited Presidential conversations, pp. 204-6.
84
D. Absolutely ! Totally true !
P. Because that, fortunately, is totally true.
D. I know that sir !
P. [Expletive deleted.] Of course, I am not dumb and I will
never forget when I heard about this [adjective deleted]
forced entry and bugging. I thought, what in the hell is this ?
What is the matter with these people? Are they crazy? I
thought they were nuts ! A prank ! But it wasn’t ! It wasn’t
very funny. I think that our Democratic friends know that
too. They know what the hell it was. They don’t think we’d be
involved in such. [pp. 108-9.]
* * * * *
P. But I think it is very important that you have these talks
with our good friend Kleindienst.
D. That will be done.
P. Tell him we have to get these things worked out. We have
to work together on this thing. I would build him up. He is
the man who can make the difference. Also point out to him
what we have, (expletive deleted) Colson’s got (character-
ization deleted), but I really, really, — this stuff here — let’s
forget this. But let’s remember this was not done by the White
House. This teas done by the Committee to Re-Elect , and
Mitchell was the Chairman, correct f
D. That’s correct !
P. And Kleindienst owes Mitchell everything. Mitchell
wanted him for Attorney General. Wanted him for Deputy,
and here he is. Now, (expletive deleted) . Baker’s got to realize
this, and that if he allows this thing to get out of hand he is
going to potentially ruin John Mitchell. He won't. Mitchell
won't allow himself to be ruined. He will put on his big stone
face. But / hope he does and he will. There is no question
what they are after. What the Committee is after is somebody
at the White House. They would like to get Haldeman or
Colson or Ehrlichman.
D. Or possibly Dean. — You know. I am a small fish.
P. Anybody at the White House they would — but in your
case I think they realize you are the lawyer and they know
you didn't have a [ adjective deleted ] thing to do with the
campaign.
D. That’s right.
P. That’s what I think. Well, we’ll see you. [pp. 109-10.]
[Emphasis added throughout.]
2. THE MARCH 13 MEETING
Dean’s testimony was that the money demands by Hunt and how to
meet, them and the promise of clemency to Hunt were discussed with
the President and Haldeman at this meeting. This testimony is not
supported by the edited Presidential transcripts of this meeting. It
appears from that document and Haldeman’s testimony 54 that Dean
confused his morning meeting with the President on March 21 — where
54 7 Hearings 2898.
85
Hunt’s money demands and clemency were discussed — with the events
of March 13. Nevertheless, the March 13 transcript is significant
because it shows that, on that date, Dean revealed at least some of the
aspects of the coverup to the President. Some illustrative passages
from the edited Presidential conversations follow :
P. Who is going to be the first witness up there ?
D. Sloan.
P. Unfortunate.
D. No doubt about it —
P. He’s scared ?
D. He’s scared, he’s weak. He has a compulsion to cleanse
his soul by confession. We are giving him a lot of stroking.
Funny thing is this fellow goes down to the Courthouse
here before Sirica, testifies as honestly as he can testify, and
Sirica looks around and called him a liar. He just said —
Sloan just can’t win! So Kalmbach has been dealing with
Sloan. Sloan is like a child. Kalmbach has done a lot of that.
The person who will have a greater problem as a result
of Sloan’s testimony is Kalmbach and Stans. So they are
working closely with him to make sure that he settles down.
[p. 138.]
* 5fe :|c ^ #
D. . . . [Kalmbach'] is solid.
P. He will — how does he tell his story? He has a pretty
hard row to hoe — he and Stans have.
D. He will be good. Herb is the kind of guy who will
check, not once nor twice, on his story — not three times — but
probably fifty to a hundred times. He will go over it. He will
know it. There won’t be a hole in it. Probably he will do his
own Q and A. He will have people cross-examine him from
ten ways. He will be ready, as Maury Stans will be ready.
P. Mitchell is now studying , is he.?
D. He is studying. Sloan will be the worst witness, I think
Magruder will be a good witness. This fellow, Bart Porter,
will be a good witness. They have already been through
grand jury. They have been through a trial. They did
well . . . [p. 140.']
* * * * *
D. Chapin didn’t know anything about the Watergate.
P. Don’t you think so ?
D. Absolutely not.
P. Strachan ?
D. Yes.
P. He knew ?
D. Yes.
P. About the Watergate?
D. Yes.
P. Well , then he 'probably told Bob. He may not have.
D. He was judicious in what he relayed, but Strachan is as
tough as nails. He can go in and stonewall and. say,?'/ don’t
know anything about what you are talking about.'” He has
already done it twice you know , in interviews.
86
P. I guess he should, shouldn’t he? I suppose we can't call
that justice , can we?
IX Well, it is a personal loyalty to him. He doesn’t want it
any other way. He didn’t have to be told. He didn’t have to be
asked. It just is something that he found was the way he
wanted to handle the situation.
P. But he knew ? He knew about Watergate ? Strachan did ?
D. Yes.
P. I will be damned ! Well that is the problem in Bob's case.
Not Chapin then, but Strachan. Strachan worked for him,
didn’t he ?
D. Yes. They would have one hell of a time proving that
Strachan had knowledge of it, though.
P. Who knew better ? Magruder ?
D. Magruder and Liddy.
P. Oh, I see. The other weak link for Bob is Magruder,
he hired him et cetera.
D. That applies to Mitchell, too. [pp. 146-47.]
❖ * * * *
P. Is it too late to go the hang-out road ?
D. Yes, I think it is. The hang-out road
P. The hang- out road (inaudible).
D. It was kicked around Bob and I and
P. Ehrlichman always felt it should be hang-out.
D. Well, I think I convinced him why he would not want to
hang-out either. There is a certain domino situation here. If
some things start going , a lot of other things are going to start
going , and there can be a lot of problems if everything starts
falling. So there are dangers, Mr. President. I would be less
than candid if I did not tell you there are. There is a reason
for not everyone going up awl testifying.
P. I see, Oh no, no, no ! I didn’t mean to have everyone go
up and testify.
D. Well I mean they’re just starting to hang-out and say
here’s our story — —
P. I mean put the story out PR people, here is the story, the
true story about Watergate.
D. They would never believe it . . . [pp. 150-51.]
[Emphasis added throughout.]
3. THE MARCH 21 MEETING
On March 21, 2 days before McCord’s letter to Judge Sirica became
public, Dean met with the President to give him a report of his knowl-
edge of the Watergate facts and to explain the implications of those
facts. Dean’s testimony before the Select Committee was as follows :
He told the President that “there was a cancer growing on the Presi-
dency and that if the cancer was not removed the President himself
would be killed by it.” He told the President that the cancer must be
excised immediately because it was growing more deadly every day.
He then gave the President a broad overview of the Watergate affair,
including a description of the meetings in January and February 1972
87
in Mitchell’s office. He told the President he did not know how the
plan was approved but that he was informed that Mitchell and Halde-
man (the latter through Strachan) had received illegal wiretap infor-
mation. 53 Dean informed the President of the highlights of the
coverup, including the use of Kalmbach by Ehrlichman, Haldeman,
and Mitchell to raise hush money to pay the Watergate defendants. He
spoke of Magruder’s false story before the grand jury and of his role
in assisting Magruder to commit perjury. He told the President that,
for the coverup to continue, it would require even more perjury and
more money. 56
Certain portions of the edited Presidential transcript for this meet-
ing relating to hush money and clemency have been previously pre-
sented in this report. The following quotations provide further indica-
tion of the tenor of the conversation at that meeting :
P. Magruder is (unintelligible)
D. Yeah. Magruder is totally knowledgeable on the whole
thing.
P. Yeah.
D. Alright now, we have gone through the trial. I don’t
know if Mitchell has perjured himself in the Grand Jury or
not.
P. Who?
D. Mitchell. I don’t know how much knowledge he actually
had. I know that Magruder has perjured himself in the Grand
Jury. I know that Porter has perjured himself in the Grand
Jury.
P. W 1 10 is Porter ? ( unintelligible)
D. He is one of Magruder’s deputies. They net up thin
scenario which they ran by me. They said “ How about thrift
/ said. “/ don’t know. If this is what you are going to hang
on, fine.” [p. 182.]
❖ * * * *
D. . . . Now what has happened post June 17 ? I was under
pretty clear instructions not- to investigate this , but this could
have been disastrous on the electorate if all hell had broken
loose. I worked on a theory of containment
P. Sure.
D. To try to hold it right where it was.
P. Right, [p. 185.]
* * * * *
D. . . . Liddy said if they all got counsel instantly and said
we will ride this thing out. Alright, then they started making
demands. “We have to have attorneys fees. We don’t have
any money ourselves, and you are asking us to take this
through the election.” Alright so arrangements were made
through Mitchell, initiating it. And I was present in discus-
sions where these guys had to be taken care of. Their attorney
fees had to be done. Kalmbach was brought in. Kalmbach
raised some cash.
55 3 Hearings 998 ; see also 8 Hearings 3074 — 75 .
58 3 Hearings 998-1000 ; see also 8 Hearings 3074 .
88
P. They put that under the cover of a Cuban Committee , I
suppose?
I). Well, they had a Cuban Committee and they had — some
of it was given to Hunt’s lawyer, who in turn passed it out.
You know, when Hunt’s wife was flying to Chicago with
$10,000 she was actually, I understand after the fact now, was
going to pass that money to one of the Cubans — to meet him
in Chicago and pass it to somebody there.
P. (unintelligible) but I would, certainly keep that cover
for whatever it is worth.
D. That’s the most troublesome post-thing because (1) Bob
is involved in that ; (2) John is involved in that : (3) I am in-
volved in that; (4) Mitchell is involved in that. And that is
an obstruction of justice, [p. 187.]
[Emphasis added throughout.]
Dean told the committee that he informed the President on March 21
that he did not believe that all of the seven defendants would main-
tain their silence forever and that one or more would likely break
rank. 57 The transcripts reveal an extended discussion about various
individuals capable of “blowing” 58 and about others who -were
“solid.” 59 The edited transcripts indicate that Dean told the President :
“I know, sir. I can just tell from our conversation that these are things
you have no knowledge of.” The President replied: “You certainly
can !” 60 (These last remarks are consistent with Richard Moore’s
testimony that Dean had said to him that the President was not aware
of White House coverup activity.) 61 According to the edited tran-
scripts, the President, shortly thereafter, told Dean :
P. Let’s come back to this problem. What are your feelings
yourself, John ? You know what they are all saying. What are
your feelings about the chances ?
D. I am not confident that we can ride through this. I think
there are soft spots.
P. You : used to be — [p. 203.]
[Emphasis added.] 62
Dean said that in this meeting he told the President that, because
he did not think they could carry the coverup any further, it was
important for the President to get out in front in revealing the true
facts. 63 The edited transcript released by the President reveals the
following exchange :
P. So what you really come to is -what we do. Let’s suppose
that you and Haldeman and Ehrlichman and Mitchell say we
can’t hold this ? What then are you going to say ? What are you
going to put out after it. Complete disclosure, isn't that the
best way to do it ?
sjs sfc sfs s|s
57 H Hearings 998-1000.
58 Edited Presidential Conversations, p. 196.
59 Id, at p. 192.
00 Id. at p. 202.
01 5 Hearings 1944-45.
82 On the afternoon of March 21st, the following colloquy occurred :
P. Well, it is a long road isn't it ? When you look back on it, as John has pointed out here,
it really has been a long road for all of you , of us.
H. It sure is.
P. For all of us, for all of us . . . (p. 253). [Emphasis added. ]
03 3 Hearings 1000.
89
D. One way to do it is for yon to tell the Attorney General
that you finally know. Really, this is the first time you are
getting all the pieces together, [pp. 203-4.]
But this recommendation was not followed. Dean testified that,
despite his full disclosures to the President, a meeting with the Presi-
dent, Hal deman, Ehrlichman and Mitchell the following day,
March 22, focused entirely on the White House’s relationship with the
Select Committee, particularly in regard to the assertion of executive
privilege. The edited transcript of that meeting shows that this was
the principal subject of discussion. Dean testified that he then became
convinced that there would no effort to stop the coverup. 64
4. THE CAMP DAVID TRIP
Dean testified that on March 23, 1973, after McCord’s letter was
read in open court, the President called Dean and, referring to
McCord’s letter, said: “Well, John, you were right in your
prediction.” 65 The President suggested that he go to Camp David to
analyze the situation. According to Dean, when he arrived at Camp
David, he received a telephone call from Haldeman who instructed
him to write a report on everything he knew about Watergate. 66 While
Dean indicated this was his first instruction to put his knowledge in
writing, the edited transcript of the March 21st afternoon meeting
indicates that the President, at that meeting, asked Dean to write a
report on Watergate. 67 Dean said lie spent that day and the next think-
ing about the entire matter and concluded that the true facts must be
publicly revealed because the situation would not improve, only
worsen. He said he had several telephone conversations with Richard
Moore, trying out ideas as to how' the President could make the whole
truth public. He said Moore seemed receptive but suggested he get
Haldeman’s reaction.
Dean spoke to Haldeman and concluded he w T as “intrigued but not
overwhelmed” by the idea of public revelation. Dean said, “It was
becoming increasingly clear that no one involved was willing to stand
up and account for themselves.” 68 Dean, at Camp David, did write a
report but decided not to give it to Haldeman or the President when
he returned. 69
5. dean’s initial contacts with prosecutors and the select
COMMITTEE
On March 28, Haldeman asked Dean to return to Washington to
meet with Mitchell and Magruder. Although Dean did not wish to do
so, Haldeman insisted. Dean testified he had the distinct impression
that Haldeman was “back-pedaling fast,” that he was in the process
of uninvolving himself even if it meant sacrificing others. 70
81 Id. at 1002.
* Id. at 1003.
» Ibid.
67 Edited Presidential Conversations, p. 283.
68 3 Hearings 1003-5.
69 Id. at 1006.
™ Ibid .
90
The March 28 meeting between Dean, Mitchell and Magruder has
been discussed earlier in this report. Magruder was concerned that
everyone stick to the coverup story Magruder had given the grand jury
as to the entries in Magruder’s diary for the meetings in Mitchell’s
office on January 27 and February 4, 1972. Dean testified he refused
to perpetuate this false story. 71
On March 30, Dean retained an attorney, and, on April 2, he and
his attorney met with the U.S. Attorneys. Dean told them he was will-
ing to come forward with everything he knew about the Watergate
affair. 72 Shortly afterward, Dean began providing information to
the Select Committee imder a special arrangement, approved by the
committee, whereby he would speak only with the chief counsel to
allow him to evaluate the information Dean could provide to determine
whether the committee should offer Dean “use” immunity.
6. THE EHRLICHMAN INVESTIGATION'
As indicated above, when Dean returned from Camp David he did
not submit a written report on Watergate to the President or Halde-
man. Because of this, Haldeman said, the President, on March 30,
ceased dealing with Dean on Watergate and transferred the White
House Watergate investigation to Ehrlichman. 73 It appears, however,
from the edited Presidential transcripts that this account of the genesis
of the Ehrlichman “investigation” was developed during an April 16,
1973, meeting among the President, Haldeman and Ehrlichman. 74 Ac-
cording to the transcript, the President asked Haldeman and Ehrlich-
man how the “scenario worked out.” Ehrlichman and Haldeman
advised the President that the White House’s position should be that
the Watergate investigation was taken from Dean and given to Ehr-
lichman because Dean failed to write a report. According to this
“scenario,” it was Ehrlichman’s report to the President that led the
President to contact Kleindienst and Petersen on April 15 to inform
them of his knowledge of the Watergate facts. 75
Ehrlichman, however, told the committee he did not conduct a
thorough investigation of the Watergate matter but only interviewed
several White House and CRP officials including Mitchell, O’Brien
and Magruder. 76 He testified he gave an oral report to the President
on April 14, 1973, that was based on these few interviews. 77 Ehrlich-
man testified that, after his report, the President directed him to “ad-
vise the Attorney General” of his findings. 78 Ehrlichman telephoned
Kleindienst at 5 :15 p.m. on April 14 and related to him the contents
of his report to the President. 79 As will subsequently appear, the pros-
ecution already possessed much of the evidence Ehrlichman offered.
71 Ibid.
72 Id. at 1009.
7 » 7 Hearings 2902. On March 28, 1973, Ehrlichman called Kleindienst and taped the
telephone conversation. (Exhibit 99, 7 Hearings 2941-45.) During this discussion, Ehrlich-
man told Kleindienst that, according to the President’s best information, “neither Dean nor
Haldeman nor Colson nor anybody in the White House” had any prior knowledge of this
burglary. In fact, as indicated earlier in this report, the President was told by at least
March 13 that Strachan and possibly Haldeman had prior knowledge.
74 Edited Presidential Conversations, pp. 820-23.
75 This episode is discussed below, p. 91-2.
78 7 Hearings 2763.
77 Id. at 2757.
78 Id. at 2758.
79 Id. at 2857.
91
7. THE ATTEMPT TO HAVE MITCHELL TAKE THE BLAME
Dean testified that his first meeting to give information to the Fed-
eral prosecutors was scheduled for April 8. He said he felt obliged to
tell Haldeman of his intentions and thus telephoned him that morn-
ing at San Clemente. Haldeman advised Dean against this course, say-
ing : “Once the toothpaste is out of the tube, it’s going to be very hard
to get it back in.” Dean ignored Haldeman’s advice and met with the
prosecutors that afternoon. 80 Moreover, Magruder in early April be-
gan talking with the prosecutors; his first substantive, conversation
with them was on April 14. 81
Dean, according to his testimony, then began avoiding Haldeman
and Ehrlichman. He did, however, have several conversations with
them between April 9 and April 14, 1973. Certain of these discussions,
according to Dean, involved a strategy to persuade Mitchell to “step
forward” and take the blame. 82 Dean’s testimony that this strategy
existed is corroborated by the edited transcript of the April 14 meet-
ing among the President, Ehrlichman and Haldeman. This transcript
basically portrays a discussion as to how to persuade Mitchell and Ma-
gruder, whom they evidently believed involved, to assume respon-
sibility for the Watergate affair and proclaim that the White House
was in no way involved. 83 Various methods of persuasion were dis-
cussed. One was to suggest to both Mitchell and Magruder— without
being specific — that clemency would be possible. The President in-
structed Ehrlichman to tell Mitchell and Magruder that “the Presi-
dent holds great affection for you and your family.” He added, “That’s
the way the so-called clemency’s got to be handled.” «
The April 14 conversation also indicates discussion regarding the
dismissal of Dean, who was then talking to the Federal prosecutors.
From the conversation, it appears that the strategy to sacrifice Mitch-
ell was motivated by the information Ehrlichman had received that
Hunt was going to testify before the grand jury. Ehrlichman reported
that Colson was very concerned about Hunt’s possible testimony be-
cause “once Hunt goes on, that’s the ball game.” The President sum-
marized Colson’s advice to the White House as “get busy and nail
Mitchell in a hurry.” 85 The President, Ehrlichman and Haldeman
decided to appeal to Mitchell’s loyalty and enlist his aid in limiting the
unraveling of the coverup. The President instructed Ehrlichman and
Haldeman to approach Mitchell by saying, “there’s nobody that can
really do it except you.” The President wanted Mitchell to testify
that “[njobody in the White House is involved, etc. and so on.” 86
8. THE president’s APRIL 15 MEETING WITH KLEINDIENST AND
PETERSEN
Meanwhile, TJ.S. Attorney Titus, and Assistant U.S. Attorneys
Earl Silbert, Donald Campbell and Seymour Glanzer, were outlining
for Henry Petersen their discoveries in the case, which were largely
based on information they were obtaining from Magruder and Dean.
80 3 Hearings 1010.
81 2 Hearings 808.
82 3 Hearings 1011.
83 See, e.g. t Edited Presidential Conversations, pp. 442-43, 450-51, 459, 501.
84 Edited Presidential Conversations, pp. 502-3.
85 Id. at pp. 409-10, 412.
88 Id. at p. 451.
92
According to Petersen, he subsequently arranged for Kleindienst to
meet with these prosecutors on the evening of April 14. 87 An all-night
session ensued and the next day, a Sunday, Petersen and Kleindienst
briefed the President on the evidence they had received, which indi-
cated a massive coverup. 88 Both Petersen and Kleindienst said the
President expressed no sign to them that Dean or anyone else had
already imparted such information. 89 Petersen testified he urged the
President to dismiss Haldeman and Ehrlichman because of their ap-
parent involvement in the coverup, but not Dean, since Dean was co-
operating with the prosecutors in its unraveling. 90 ’ 91
9. FURTHER MEETINGS BETWEEN THE PRESIDENT AND DEAN
On the evening of April 15, 1973, Dean said he met with the Presi-
dent to inform him of his discussions with the prosecutors. He testified
he told the President his conduct was not “an act of disloyalty” but
an action he believed necessary because “I felt this matter had to
end.” The President asked whether he had received immunity and
he advised that no deal had been made. Dean stated the President in-
structed him not to discuss national security matters or Presidential
conversations with the prosecutors. He said the President then at-
tempted to clarify his earlier March 21 comment that it would be no
problem to raise $1 million in hush money. Dean said the President
told him he had only been joking when he made that remark.
Contrary to Petersen’s advice, the President decided that Dean
should leave the White House but that Haldeman and Ehrlichman
should stay. Dean testified that, on April 1(1, the President called
him into the Oval Office and gave him two letters prepared for his
signature, “one letter requested the acceptance of Dean’s resignation,
the other letter requested an indefinite leave of absence.” Both letters
cited “my * * * involvement in the Watergate matter” as cause for
departure. Dean testified he refused to sign either letter. The President
then, Dean said, requested Dean to prepare his own letter of resigna-
tion, which Dean agreed to do. 92 However, later in the day, Dean
said, he informed the President that he would not resign unless
Ehrlichman and Haldeman followed suit. 93
The edited transcripts of these meetings confirm Dean’s testimony
in large part. At the first meeting, the President told Dean he would
have to say something about Dean’s resignation “or otherwise they
87 According to Dean's opening statement before the Committee, Silbert, Campbell and
Glanzer had originally agreed with Dean’s counsel to keep confidential the information Dean
was giving them. But, after Dean informed Ehrlichman on April 14 that his attorney had
told him that Haldeman and Ehrlichman were targets of the grand jury, Dean’s counsel,
late that evening, called Dean and told him that the prosecutors had informed him (Dean’s
counsel) that ‘‘they were going to have to breach the agreement they had made regarding
keeping all [Dean’s] conversations with them private.” The reason given by the prosecutors
for this change of position was that “the Attorney General had called Petersen and them
and wanted a full report on everything that was going on before the grand jury and where
the grand jury was headed” (3 Hearings 1014).
88 9 Hearings 3627—28.
89 Id. at 3586-87, 3634.
00 Id. at 3628-29.
91 The edited transcript of an April 14 Oval Office meeting among the President, Haide-
man. and Ehrlichman reveals that this meeting focused in part on Dean’s plans to give
testimony to the prosecutors and the question of whether Dean should be dismissed. The
President described one tactic supporting Dean’s dismissal as follows : “* * * cut your
losses and get rid of ’em. Give ’em an hors d’oeuvre and maybe they won’t come back for
the main course. Well, out, John Dean.” (Edited Presidential Conversations, pp. 491—92.)
92 3 Hearings 1017-18.
99 Ibid.
93
will say ‘What the hell, after Dean told you all of this, what did you
do?’ You see?” The following colloquy then took place:
P. But what is your feeling on that? See what I mean?
D. Well, I think it ought to be Dean, Ehrlichman, and
Haldeman.
P. Well, I thought Dean at the moment,
D. All right.
*****
P. * * * And what I would think we would want to do is
to have it in two different forms here * * * It seems to me
that your form should be to request an immediate leave of
absence. That would be one thing. The other, of course, would
be a straight resignation.
D. Uh, huh
P. First, what I would suggest is that you sign both * * *
# % ifc *
D. What I would like to do is draft up for you an alterna-
tive letter putting in both options and you can just put them
in the file. Short and sweet.
P. All right. Fine. I had dictated something myself. All
my own. If you can give me a better form, fine. I just want to
do it either way. Do you ? Or do you want to prepare some-
thing ?
D. I would like to prepare something, [pp. 788-91.]
Later that day Dean returned with his draft :
D. I wrote : “Dear Mr. President : Inasmuch as you have in-
formed me that John Ehrlichman and Bob Haldeman have
verbally tendered their requests for immediate and indefinite
leave of absence from the staff, I declare I wish also to con-
firm my similar request as having accepted a leave of absence
from the staff.” Well, I think there is a problem.
P. You don’t want to go if they stay
D. There is the problem for you of the scapegoat theory.
P. You mean making use of it.
D. That’s right, [p. 958.]
10. THE QUESTION OE IMMUNITY FOR DEAN
In the evening of April 17, 1973, President Nixon told the Nation:
I have expressed to the appropriate authorities my view
that no individual holding in the past or at present a position
of major importance in the Administration should be given
immunity from prosecution.
Dean testified that :
When the President issued his statement on April 17, in
which he was quite obviously trying to affect any discussions
I was having with the Government regarding my testimony
by inserting the phrase therein regarding “no immunity” and
combined with the fact that he had requested that I sign a vir-
94
tual confession on Monday of that week, I decided that indeed
I was being set up * * * 94
The edited Presidential transcripts provide some support for Dean’s
intimation that the President did not want him to receive immunity
because of concern over his testimony. On the afternoon of April 17,
the President expressed his concern over the threat Dean posed :
P. I’m not ruling out kicking him (Dean) out. But you got
to figure what the hell does Dean know. What kind of black-
mail does he have? [p. 992.]
Later that afternoon the President, observing that “Dean is the only
one who can sink Haldeman or Ehrlichman,” informed Haldeman and
Ehrlichman he had told Assistant Attorney General Petersen “specifi-
cally, that nobody should be granted immunity in any case.” 95 He
told them, “I want you to go forward at all costs to beat the damned
rap. They’ll have one hell of a time proving it.” 96
On April 18, Petersen testified, the President called him to inquire
whether Dean had been immunized. After checking with Dean’s lawyer
and Mr. Silbert, Petersen assured the President that Dean had not
received immunity. The President told Petersen he had a tape of an
April 15 conversation with Dean in which Dean said he had been
immunized. The President offered to let Petersen hear the tape, but
Petersen refused. 97
On April 19, the President met with Haldeman’s and Ehrlichman’s
lawyers, John J. Wilson and Frank Strickler. The following passage
from the edited transcript of this conversation is significant:
P. Then, you got to remember Dean, as I have said, is a
loose cannon.
W. I know he is.
P. The damndest charges you’ve ever heard. Some of them
are unbelievable.
W. Yes.
P. This fellow that was sitting in here and who in the
Office of the President — a very bright young guy — but he
now wants to drag them down with him.
W. Yes. Oh, he’s bad.
P. They must have told him what I — they — I think — have
told Dean that, “// lie'll — if he can get Haldeman and Ehr-
lichman — he gets immunity. ” Now on that point , do you
tcant Petersen to give him: immunity , or not f
W. Uh
P. Dean.
W. Well.
P. Should he ?
W. Uh. Let me — as I understood, they were hung up on
that right now.
P. They are.
W. Now.
9A 3 Hearings 1020.
95 Edited Presidential Conversations, p. 1193.
96 Id. at p. 1197.
07 9 Hearings 3655. It was this conversation that the White House said later was never
recorded because the tape “ran out.”
95
P. See, that's why — I put out a statement that no major
figure should he given immunity.
W. Let me tell you
P. Basically, because I think it would look bad if — (un-
intelligible) from our standpoint * * * [pp. 1239-1240.]
[Emphasis added throughout.]
The edited transcripts also demonstrate that Secretary of State Rogers
agreed with the President that it would look bad to give Dean
immunity. 98
On April 19, 2 days after the President’s no-immunity statement,
Dean issued a public statement that he would not be made a “scape-
goat” in the Watergate affair. 99 On the same day Dean made this state-
ment, White House aide Stephen Bull was asked to investigate Dean’s
awareness of the White House taping system. In his testimony during
the Watergate tapes hearings before Judge Sirica, Bull was unable
to recall who instructed him to make this check. He ascertained from
a White House Secret Service official that Dean did not know about the
system. 1 As former Presidential Assistant Alexander Butterfield testi-
fied, very few individuals were cognizant of the secret taping system. 2
On Easter Sunday, April 22, according to Dean, the President tele-
phoned to wish him happy Easter. Dean characterized this as a “strok-
ing” call. 3
11. THE president’s APRIL 30 STATEMENT
On April 30, 1973, President Nixon addressed the American public
on Watergate, declaring he accepted full “responsibility” for the
abuses that had transpired. The President announced the- resignations
of Haldeman and Ehrlichman, “two of my closest associates in the
White House” and “two of the finest public servants it has been my
privilege to know.” He also revealed the resignations of Kleindienst
and Dean and his selection of Elliot Richardson as Kleindienst’s
replacement. The President stated that Dean’s resignation had been
requested.
The President also claimed in this address that he had begun an
“intensive” new investigation into the Watergate matter on March
21. The background of this statement is found in the edited presiden-
tial transcript of a meeting on April 17, at pp. 1121-22 :
P. The next part is what I’m concerned about. “I began
new inquiries,” shall we say ?
E. Well, I don’t know.
P. “I began new inquiries into this matter as a result of
serious charges, which were reported publicly and privately.”
Should we say that ?
E. Publicly, comma “which in some cases were reported
publicly.”
P. “Four weeks ago we,” Why do-nit we say , shall we set
a date? That sounds a hell of a lot stronger if we set a date.
(Emphasis added.)
98 Edited Presidential Conversations, p. 1144.
99 3 Hearings 1020.
1 In re: Subpenas Duces Tecum Issued to President Richard M. Nixon (D.D.C. Misc. No.
47-73). transcript of proceedings, pp. 2544—47.
2 5 Hearings 2077.
3 3 Hearings 1020.
96
E. All right.
P. “On March 21, I began new inquiries.” Strike that. “I
ordered an investigation, new inquiries throughout the gov-
ernment — ”
On May 17 the committee opened its public hearings into the Water-
gate burglary and its aftermath. By August 7, 1973, when the first
phase of hearings ended, the Gemstone plan, the break-in, the details
of the coverup, and much more had been revealed.
III. RECOMMENDATIONS
1. The committee recommends that Congress enact legislation
to establish a permanent Office of Public Attorney which would
have jurisdiction to prosecute criminal cases in which there is
a real or apparent conflict of interest within the executive branch.
The Public Attorney would also have jurisdiction to inquire into
(with power to gain access to executive records) the status and
progress of complaints and criminal charges concerning matters
pending in or involving the conduct of Federal departments
and regulatory agencies. The Public Attorney would be appointed
for a fixed term (e.g., 5 years), be subject to Senate confirmation
and be chosen by members of the judicial branch to ensure his
independence from executive control or influence.
In each of the Nation’s two major scandals during the- past half
century, Teapot Dome and Watergate, the appointment of a special
prosecutor was essential to preserve the integrity of the criminal jus-
tice system and public confidence in the rule of law. In both situa-
tions, the office was created after serious abuses had occurred.
The evidence gathered by the Select Committee indicates that un-
monitored executive investigative and prosecutorial agencies may be
reluctant to expose wrongdoing in the executive branch. It is thus
essential that an independent Public Attorney’s Office be created to
investigate and prosecute where conflicts of interest in the executive
branch exist. This Office should be given power to inquire fully into
corruption in the executive branch and have access to all records re-
lating to such corruption. The operations of the current special pros-
ecution force demonstrate the effective role such an entity can play.
The 'preventative role this Office could fulfill must be emphasized.
Permanent status for this Office could help insure responsible action
by executive branch officials who have primary responsibility to ad-
minister and enforce the law*. Indeed, it is reasonable to speculate
that the existence of a Public Attorney’s Office might have served as
a deterrent against some of the wrongful acts that comprise the Water-
gate scandal. Because of this preventive role, it is unwise to wait until
another national crisis to re-institute the Office of Special Prosecutor.
It is far better to create a permanent institution now than to consider
its wisdom at some future time w*hen emotions may be high and un-
known political factors at play.
The Public Attorney w T e recommend would not be only a “special
prosecutor” but an ombudsman having power to inquire into the ad-
ministration of justice in the executive branch. With the power of
access to executive records, he could appropriately respond to com-
plaints from the public, the Congress, the courts and other public
97
and private institutions. If he became aware of misconduct in the
executive branch, he could assume the role of special prosecutor. The
Public Attorney should also be required to make periodic reports to
Congress on the affairs of his office and the need for new legislation
within his jurisdiction, a function that should be of great assistance
to the relevant congressional oversight committees.
The Attorney General should find such an Office advantageous in
cases involving charges against administration officials or persons
otherwise close to high executive officers, particularly where a proper
exercise of discretion not to prosecute would give rise to public sus-
picion of coverup. Such cases could be referred by the Attorney Gen-
eral to the Public Attorney. The Public Attorney would also have juris-
diction to prosecute all criminal cases referred to it by the Federal
Elections Commission, which is elsewhere recommended in this report.
It is not anticipated that there would be substantial jurisdictional
disputes between the Justice Department and the Public Attorney.
The statute establishing the Public Attorney should grant him dis-
cretionary jurisdiction in any situation where there is a reasonable
basis to conclude that a conflict of interest exists. He should have ex-
clusive jurisdiction over criminal cases referred to him by the Federal
Elections Commission. As to cases where a jurisdictional dispute
cannot be resolved, provision should be made for special judicial deter-
mination on an expedited basis. Deciding such jurisdictional disputes
would be well within the competence of the courts for the question
would primarily be one of statutory interpretation. 4
The present immunity statute would have to be amended to allow
the independent prosecutor to grant “use” immunity without the
consent of the Attorney General. The procedure by which the Public
Attorney obtains immunity should be made similar to that applicable
to congressional requests for immunity. The Attorney General would
be informed of an immunity request, but he could only delay the im-
munity, not prevent it. Similarly, the Attorney General would inform
the Public Attorney of his immiuiity decisions; the Public Attorney
would have the power to delay, not prevent, immunity.
To guarantee true independence from the executive branch, the
Public Attorney should be appointed for a fixed term (e.g., 5 years) .
He should be removable only by the appointing authority (described
below) for gross improprieties. Because it is highly important that
the Special Prosecutor act solely in the interest of justice and not for
personal benefit, he should be ineligible for appointment or election
to Federal office for a period of 2 years after his term expires or he
resigns or is removed.
Crucial to the independence of the Public Attorney is the appoint-
ing authority. If the appointing authority is vested in the President
or the Attorney General (who is responsible to the President), the
appearance of political influence would remain even if the Public
Attorney has an extended tenure. The argument in favor of presiden-
tial appointment is that criminal prosecution is an executive func-
tion and there is a presumption of regularity respecting the exercise
4 When Dwayne Andreas attacked the jurisdiction of Special Prosecutor Cox to investi-
gate a campaign violation that allegedly occurred during the 1968 election, a District
Court in Minnesota promptly decided the jurisdictional issue in favor of the Special
Prosecutor. See United States v. Andreas, 4-73— CR. 201 (D. Minn. 1973).
35-687 0 - 74 -9
98
of Presidential power that should not be disregarded because of the
unique abuses of Watergate. But Watergate at least teaches that the
abuse of power must be anticipated. The committee’s recommendation
that responsibility for appointment of the Public Attorney should
rest with the judicial rather than with the executive would establish
a check against future abuse of power.
The Constitution allows the vesting of the appointment power in
others besides the Chief Executive. Article II, section 2, paragraph
2, cl. 2, provides :
. . . [T]he Congress may by Law* vest the appointment of
such inferior Officers, as they think proper, in the President
alone, in the Courts of Law , or in the Heads of Departments.
[Emphasis added.]
The few cases interpreting this clause support a plan by which the
Public Attorney is appointed by the courts of law.
The leading case is Ex Parte Siebold , 100 U.S. 371 ( 1879 ) . Congress,
pursuant to the Enforcement Acts of 1870 and 1871, vested the appoint-
ment of election supervisors in the circuit courts. The Supreme Court
upheld the constitutionality of this appointment power, observing
that there could be other appointments which Congress might want a
court to make, such as a marshal. “The marshal is preeminently the
officer of the courts . . . ” Id. at 397. Apparently, the only limitation
on the courts’ appointment power is that the office involved must not
be of “such incongruity [to the judicial function] as to excuse the
courts from . . . performance [of the appointing function], or to
render their acts void.” Id. at 398. Since a prosecutor is more an officer
of the court than a marshal or election supervisor, it is difficult to con-
tend that the appointment of a Public Attorney is “incongruous”
to the judicial function.
The district court for the District of Columbia relied heavily on
E x Parte Siebold in upholding the constitutionality of a provision of
the D.C. Code which required the members of the Board of Education
to be appointed by the judges of that court. Hobson v. Hansen , 265 F.
Supp. 902 (D.D.C. 1967). 5 The court read the congruity requirement
of Ex Parte Siebold narrowly :
The limitation which is referred to in Siebold is not an
affirmative requirement that the duty of the officer be re-
lated to the administration of justice, it is a negative require-
ment that the duty may not have “such incongruity” with the
judicial function as would void the power sought to be con-
ferred. Id. at 913.
In short, given the clear congruity between the public attorney’s
tasks and the judicial function, it should be constitutional for the Con-
gress to vest the appointment power in the judicial branch. See also
Rice v. Ames , 180 IT.S. 371 (1901) (Congress has power to authorize
circuit courts to appoint commissioners to handle extradition mat-
ters) ; Russell v. Thomas. 21 Fed. Cases 12, 162 (1874) (Congress has
power to authorize courts to appoint IT.S. Commissioners of insol-
5 Hobson also relied on the plenary power of Congress to legislate for the District. Yet
it seems clear that its statement on the reach of art. II, see. 2, cl. 2, should be regarded
as at least an alternative holding. See Id. at 911 : “[W]e could rest alone upon art. I, but
sec. 31-301 gains support also from art. II § 2, cl. 2, of the Constitution.”
99
vency) ; Birch v. Steele , 165 F. 577 (5tli Cir. 1908) (Congress has
power to authorize courts to appoint referees in bankruptcy). 6
While it is thus constitutional to vest the appointment of a Public
Attorney in the judicial branch, the question remains as to what part
of the judicial branch should have this power. It would be a safer
constitutional scheme if the appointing authority were in no way in-
volved in hearing the cases to be prosecuted by - the Public Attorney.
If a district judge, for example, was directly responsible for appoint-
ing a Public Attorney to prosecute certain individuals before that
same district judge, questions respecting an appearance of partiality
and the lack of due process might be raised. In Hobson v. Hansen . , 265
F. Supp. 902 (D.D.C. 1967), the court recognized possible due process
problems, but stated that the
. . . official act of participating in the selection of Board
members does not in and of itself preclude on due process
grounds the ability of the judge to decide fairly the merits of
litigation challenging the validity of the performance by a
Board member of his duties as such. If in a particular case
such a challenge were made its soundness on due process
grounds would depend on the circumstances bearing thereon
and not on the mere fact that the judge had performed the
duty reposed upon him by Congress in sec. 31-101. 265 F.
Supp. at 918.
The possible problems raised in Hobson were also discussed in V rated
States v. Solomon , 216 F. Supp. 835 ( S.D.N.V . 1963). The Solomon
court upheld the validity of 28 U.S.C. § 506 (now 28 U.S.C. § 546)
which permitted the district court, to appoint a 1 J.S. attorney when a
vacancy occurs to serve until that vacancy is filled by the President.
But the court emphasized that the judicial appointment was temporary
in holding that the “statutory scheme for the temporary appointment
by the judiciary of the U.S. attorney comports in all respects with due
process of law.” Id. at 843. The court was apparently concerned that,
if it also had the power to remove the prosecutor it appointed, there
might be a “nexus between court and prosecutor too close to comport
with due process.” Although the concerns expressed in Solomon were
dictum, it would be the wiser course to avoid an appointment proce-
dure which would involve active judges who might hear cases brought
by a prosecutor they appointed and could remove. 7
To avoid these constitutional problems and to create an office of
Public Attorney that is not only tndy independent blit also appears
truly independent, the Congress should vest the appointment power
as follows : The Chief Justice should be given the power and duty
to select three retired circuit court judges who, in turn, would appoint
the public attorney. After the Chief Justice makes the initial appoint-
ment of the three circuit court judges, his responsibilities would be
ended; the three retired circuit court judges — who would not sit on
8 It is of interest that in some States, e.g Connecticut, the courts generally appoint
prosecutors. 51 Conn. Gen. Stats., sec. 175. And Federal courts have long appointed
defense counsel for indigents. „ .
i See also Nader v. Bork, C.A. 1954-73 (D.D.C. Nov. 14, 1973), where the court, in
opposing congressional proposals to have the courts appoint a special prosecutor for
Watergate matters, stated in obvious dictum that the courts “must remain neutral. Their
duties are not prosecutorial.” (File Opinion at 10). We do not suggest that courts be
given prosecutorial duties. As Hobson v. Hansen , 255 F. Supp. 902 (D.D.C. 1967) made
clear, the appointing of an election supervisor is not the performance by the court of
the functions of election supervisor. Id. at 913.
100
any cases, either at trial or in an appellate capacity, in which the Public
Attorney’s office was involved — would make the actual appointment,
which would be subject to confirmation by the Senate. The Public
Attorney could be removed only by the three retired circuit court
judges and only upon a finding of gross improprieties. At the end of
the 5-year period, the Chief Justice would appoint (or reappoint)
three retired circuit court judges and they, in turn, would choose a new
Public Attorney, or reappoint the outgoing Public Attorney for one
additional term only. 8
Although Canon 5(g) of the Code of Judicial Conduct discourages
extra-judicial assignments in controversial matters, it does permit as-
signments dealing with “the administration of justice.” Thus, the
acceptance of an appointment by a senior judge to a Public Attorney
Supervisory Committee would be permissible under the canons. A
senior judge accepting the appointment would not receive any addi-
tional salary because of such service.
2. The committee recommends that, in connection with its revi-
sion of the Federal Criminal Code, Congress should treat as a
separate Federal offense, with separate penalties, any felony
defined in the code (except those felonies that specifically relate
to Federal elections) that is committed with the purpose of
interfering with or affecting the outcome of a Federal election
or nominating process.
The purpose of this proposal is primarily to establish, as a separate
Federal crime, the commission of certain traditionally common law
offenses such as burglary and larceny where these crimes are committed
with the intent of interfering with or affecting a Federal election or
nominating process. To understand this proposal, it is necessary to
comprehend the workings of the three main proposed revisions of the
criminal code now before 'Congress — H.R. 10047 (the Brown Commis-
sion proposal) S. 1400 (the administration’s proposal) and S. 1 (the
proposal of the staff of the Criminal Procedure Subcommittee of the
Senate Judiciary Committee) .
Each of these proposals would make certain traditional common
law offenses, usually prosecutable only in the State courts. Federal
offenses in certain circumstances — for example, if the victim is a Fed-
eral public servant or if the property that is the subject of the offense
is federally owned. Each proposal defines the various common law
crimes that will become Federal crimes triable in Federal courts in the
proper circumstances. In each case the list is lengthy.
As noted, the proposal the committee offers is to make various com-
mon law crimes Federal offenses prosecutable in Federal courts when
the offenses are conducted with the intent to interfere with or affect a
Federal election. It would thus add another jurisdictional base for the
Federal courts to those already suggested by the existing revisions —
for example, that the crime is against a Federal employee. The pro-
posal also establishes a separate offense all other violations of Federal
criminal law (except those laws that specifically relate to Federal
elections) where the offense is committed with intent to interfere with
or affect a Federal election or nominating process.
8 Senior circuit judges, with salaries fixed for life, are, of course, totally independent
from the other two branches of government.
101
The committee feels that the amendment it proposes is needed. Under
existing law, the DhTC burglary and the break-in of Dr. Fielding’s
office could not be tried in a U.S. district court under a burglary indict-
ment. The defendants in the Fielding break-in matter were prosecuted
on conspiracy and perjury counts.
Adoption of the above proposal would not add redundancy to the
criminal law. Bather, it would allow the prosecution of crimes in which
there is a Federal interest in Federal courts. And it would allow the
prosecutor to present an election related offense to the jury in proper
perspective — that is, as an attempt to violate the integrity of a Federal
election or nominating process. Such a statute would carry appropriate
penalties to indicate the gravity of corrupt interference with the Fed-
eral electoral process (for example, a fine up to $25,000 and/or im-
prisonment up to 5 years) .
3. The committee recommends that Congress enact legislation
making it unlawful for any employee in the Executive Office of
the President, or assigned to the White House, directly or indi-
rectly to authorize or engage in any investigative or intelligence
gathering activity concerning national or domestic security not
authorized by Congress.
The evidence received concerning the establishment, by direction
of the President, of a special investigative unit in the White House
(the Plumbers) and the operations of the Plumbers illustrates the
danger to individual rights presented by such secret investigative
activity.
By statute Congress has already established various professional
investigative agencies to serve the Executive’s legitimate investiga-
tive needs ; for example, the CIA, the FBI, the Secret Service. These
bodies are wisely restricted in their jurisdiction and authority by
stringent statutory provisions and are answerable not only to the
Executive but also to special oversight committees of Congress. Thus
our free society is served, not controlled, by its police agencies. No
President should be allowed to circumvent these agencies and erect
a secret White House investigative operation such as the Plumbers
not subject to statutory controls and congressional oversight. If any
agency charged with investigative efforts is deficient, the President
should reform it, not create a substitute.
Under the proposed recommendation it would be a criminal offense
for anyone in the White House or the Executive Office of the Presi-
dent to perform investigative or police functions relating to internal
or national security matters, unless existing statutory law already au-
thorizes such functions (as with the Secret Service). Similarly, it
would be illegal for anyone in the Executive Office of the President or
on the White House staff to employ any person to conduct such
functions. 9
4. The committee recommends that the appropriate congres-
sional oversight committees should more closely supervise the
operations of the intelligence and law enforcement “community.”
In particular, these committees should continually examine the
9 This proposal would not restrain otherwise lawful investigations carried out for
political purposes— e.g. f to discover the foibles of one’s political opponents.
102
relations between Federal law enforcement and intelligence
agencies and the White House, and promptly determine if any
revision of law is necessary relating to the jurisdiction or activi-
ties of these agencies.
From its beginning, the Central Intelligence Agency has been pro-
hibited from performing police and internal security functions within
the United States. Thus, 50 U.S.C. sec. 403(d) (3) explicitly provides:
That the Agency shall have no police, subpena, law enforce-
ment powers, or internal-security functions . . .
Notwithstanding this clear and longstanding prohibition, the Select
Committee produced evidence that the White House sought and
achieved CIA aid for the Plumbers and unsuccessfully sought to in-
volve the CIA in the Watergate coverup. These efforts on the part of
the White House underline the need for constant and vigorous con-
gressional oversight. The congressional committees charged with re-
sponsibility for the CIA should thus consider the need for hearings to
determine if more explicit statutory language would be useful to
restrain the CIA to its legitimate sphere of operation.
As for law enforcement agencies, testimony of the former Acting
Director of the Federal Bureau of Investigation, Patrick Gray, and
others, regarding White House attempts to interfere with the FBI’s
investigation of the Watergate affair, as well as evidence received by
the committee as to efforts by the White House to influence IRS opera-
tions, indicate that similar oversight functions should be strengthened
with regard to the FBI, IRS, and other similar agencies.
5. The committee recommends that Congress amend:
(1) The false declaration prohibition of 18 U.S.C. sec. 1623
to make it equally applicable to congressional proceedings
under oath.
(2) Section 1621 of Title 18 to provide that, once the oath
has been properly administered by a Congressman in a public
or private congressional hearing, it is not a defense to a
perjury charge that subsequently a quorum was absent or
no Congressman was present when the perjurious statement
was made.
(1) The false declaration prohibition of 18 U.S.C. sec. 1623(c)
in effect provides that, to sustain a perjury conviction regarding state-
ments made under oath to a court or grand jury, or in a civil deposition,
the Government must only show that two statements made under oath
in any of these forums are inconsistent. 10 This provision should be made
equally applicable to congressional proceedings under oath. There is no
10 This provision reads: An indictment or information for violation of this section
alleging that, in any proceedings before or ancillary to any court or grand jury of the
United States, the defendant under oath has knowingly made tw r o or more declarations,
which are inconsistent to the degree that one of them is necessarily false, need not specify
which declaration is false if —
(1) each declaration was material to the point in question, and
(2) each declaration was made within the period of the statute of limitations
for the offense charged under this section.
In any prosecution under this section, the falsity of a declaration set forth in the
indictment of information shall be established sufficient for conviction by proof that the
defendant while under oath made irreconcilably contradictory declarations material to
the point in question in any proceeding before or ancillary to any court or grand jury.
It shall be a defense to an indictment or information made pursuant to the first sentence
of this subsection that the defendant at the time he made each declaration believed the
declaration was true.
103
policy justification for granting proceedings in other forums a greater
protection from perjury than given congressional investigations.
(2) Under section 1621 of title 18, as interpreted by the courts, it
appears that conviction for perjury before a congressional body will
not lie in the absence of a quorum when the offending statement was
made. See Christoff el v. United States , 338 U.'S. 84 (1949) which con-
cerned a House subcommittee and the analogous District of Columbia
perjury statute, D.C. Code section 22-2501. The Select Committee has
found it necessary to conduct numerous executive sessions under oath
where a Senator was not present for the entire hearing. To require a
Senator or Congressman to be present at all times during executive
sessions stifles vigorous, far-reaching investigations because there is
simply not enough congressional time available.
Section 1621 of title 18 should thus be amended to provide that,
in regard to a perjury charge relating to congressional testimony
under oath, it is not a defense that there was no quorum 11 or no Con-
gressman present when the perjurious statement was made. When a
witness has been placed under oath, he is on fair notice that his tes-
timony must be truthful. A civil litigant can depose a witness, under
penalty of perjury, without a judge present and the law should not
require that, in order to sustain a perjury charge regarding congres-
sional testimony, a Congressman be present. The fact that a Congress-
man is required to place a witness under oath should provide ample
protection against possible harassment by staff investigators. See 2
U.S.C. sec. 191 (“Oath to Witnesses”) . 12
The present recommendation is not intended to require a witness
to answer questions when a quorum of the congressional committee is
not present. It relates only to a witness who has been sworn when a
quorum is present and who chooses to respond to questions in the ab-
sence of a quorum.
6. The committee recommends that the Congress refrain from
adopting proposed revisions of title 18 which would unjustifiably
broaden the present defenses to criminal charges of official mis-
take of law and execution of public duty. The committee supports
the predominant rule of law adopted in the American Law In-
stitute’s model penal code that any reliance on a mistake of law
or superior orders must be objectively reasonable to constitute
a valid defense.
There are several proposals before the Congress — H.K. 10047 (secs.
521 and 532) and S. 1 (secs. 303 and 1-306 (b) ) — which would expand
the present common law defense of official mistake of law and execu-
tion of public duty. Under existing law, a public official, who can show
that conduct taken in the course of his duties resulted from an objec-
tively reasonable mistake of law or reliance upon superior orders, has
a valid defense to a criminal charge relating to that conduct. See
Perkins on Criminal Law (2 ed. 1969) , pp. 921-2. The proposed drafts
11 Present Select Committee rules provide that a quorum for the purposes of taking
testimony and receiving evidence is one Senator. Rule 5, Select Committee Rules of
Procedure. See appendix of legal documents, p. 47.
12 If the hearing is recessed to another date, a Congressman’s further presence would
not be required since the witness will already be sworn. but the witness cannot be re-
quired to attend a recessed session unless the committee issues a new subpena. Moreover,
normally a witness will not be held in contempt for failure to answer a question unless
the full House of Congress votes to initiate the statutory contempt procedure found in
2 U.S.C. 194.
104
would apparently erect as a defense to a criminal charge a subjective,
good faith reliance by a public official on an official grant of permis-
sion or interpretation of the law. Under the proposals, it appeal's that
the defense would still lie even if the official grant of permission or
interpretation of the law were oral and secret. These proposed revi-
sions were drafted before the Select Committee’s hearings, which
presented substantial relevant evidence bearing on this issue.
The Select Committee rejects the broadening of this defense incor-
porated in the proposals now before the Congress. The committee rec-
ognizes that the proposed revisions are based on extensive studies of
the present criminal law that range far beyond the scope of the com-
mittee’s own investigation. However, based on its experience, the com-
mittee believes that the present law, as reflected in the American Law
Institute’s model penal code, is adequate to meet all legitimate claims
of official mistake of law or public duty and should not be expanded.
7. The committee recommends that the appropriate committees
of Congress study and reconsider title III of the Omnibus Crime
and Safe Streets Act of 1968 for the purpose of determining
whether the electronic surveillance provisions contained in that
act require revision or amendment.
The committee’s investigation has revealed incidents of unlawful
violations of privacy through electronic surveillance, some of which
were committed, directly or indirectly, under the auspices of the enti-
ties of government in whose trust Congress placed the protection of
privacy by the provisions of title III of the Safe Streets Act of 1968.
The restrictions contained in that act have proved inadequate to pro-
tect individuals against unjustified invasions of privacy. A thorough
reevaluation of this legislation, including a factual investigation of
Federal wiretapping practices, is necessary.
Under the 1968 act a special commission was to be appointed by
the President 5 years after the effective date of the act. The President
has now appointed this commission for the purpose of evaluating the
strengths and deficiencies of this legislation. However, the committee
believes that in light of the facts revealed in its investigation of a scan-
dal in the executive branch unforeseen by Congress when it enacted
the 1968 act, it is essential that the appropriate committees of Congress
make their own investigations and evaluations of the experience under
the new Federal electronic eavesdropping law. It appears to be inap-
propriate to rely solely on a Presidential Commission which must
report to the same administration under which violations of privacy
took place.
An important issue for consideration is whether national security
electronic surveillance should require prior court approval. Both the
Supreme Court and the Congress have left this matter unresolved. In
United States v. U.S. Distinct Court, 407 U.S. 297 (1972), the Court
firmly rejected the Government’s claim that warrantless electronic
searches in domestic security cases were a reasonable exercise of Pres-
idential power. Justice Lewis Powell’s opinion for a unanimous Su-
preme Court concluded that “prior judicial approval is required” for
domestic security surveillance. The issue arose in a case in which the
Attorney General had authorized wiretaps “to gather intelligence in-
formation deemed necessary to protect the Nation from attempts of
105
domestic organizations to attack and subvert the existing structure of
the Government.”
The Court said that, although the fourth amendment’s requirement
of a warrant before a search is not absolute, the prior judgment of
an independent magistrate is the norm. “Fourth amendment freedoms
cannot be properly guaranteed if domestic security surveillances may
be conducted solely within the discretion of the executive branch.”
Although Justice Powell carefully limited his opinion to “the domestic
aspects of national security” and expressed no opinion on “the issues
which may be involved with respect to activities of foreign powers
or their agents,” he did state : “Nor do we believe prior judicial ap-
proval will fracture the secrecy essential to official intelligence gather-
ing. * * * Judges may be counted upon to be especially conscious of
security requirements in national security cases.” [Emphasis added.]
(But see, Laird v. Tatum , 408 U.S. 1 (1972), in which the Supreme
Court, 5 to 4, failed to find a justificiable controversy so as to permit
a decision on the merits of the Army’s surveillance of civilian political
activity.)
In view of the fact that the Court has left unanswered the question
whether warrants are necessary with respect to intelligence regarding
foreign activities, it is clear that Congress should address itself to
the question whether prior judicial approval should be required for
all wiretaps and other electronic surveillance. The Select Committee
so recommends. In the wiretap case just discussed, Justice Powell
suggested that “Congress may wish to consider protective standards
(for foreign intelligence wiretaps) which differ from those already
prescribed for specified crimes in title III (of the 1968 Crime Control
Act). Different standards may be compatible with the fourth amend-
ment if they are reasonable both in relation to the legitimate need
of Government for intelligence information and the protected rights
of our citizens.”
While the Supreme Court has not ruled on the validity of warrant-
less wiretaps not involving U.S. citizens to achieve foreign intelligence,
at least two courts of appeals have held that such surveillance does
not violate the fourth amendment. See United States v. Brown , 484
F. 2d 418 (5th Cir. 1973) ; United States v. Dellinger , 472 F. 2d 340
(7th Cir. 1972).
There is no justification totally to prohibit the Executive from
conducting such surveillance. But when it is done within the United
States it is preferable that a warrant be obtained prior to the wiretap.
Congress should take cognizance of Justice Powell’s invitation in
the wiretap case and address itself to this issue.
Suitable legislation should establish procedures permitting the
courts under designated standards to authorize surveillance of foreign
powers. A basic standard that could be employed is whether there
is reason to believe that information of importance to the Nation’s
security would be obtained.
To obviate possible disclosure of such activities, Congress could
establish special procedures to be followed. This could be done easily
and effectively by a provision that all such warrants be issued by
a single judge — perhaps the Chief Judge of the U.S. District Court
for the District of Columbia. Staff work could be performed by the
Department of Justice, so that only the judge himself need see the
106
warrant and supporting material. And special procedures should be
established to protect the rights of American citizens who might be
overheard. In net, the need is for prior judicial approval under guide-
lines that will protect national security.
There should be no constitutional barrier to such legislation. As
Justice White said in his concurring opinion in the wiretap case,
“the United States does not claim that Congress is powerless to require
warrants for surveillance which the President otherwise would not
be barred by the fourth amendment from undertaking without a
warrant.” In fact, the wiretap case is a direct holding by the Supreme
Court that Congress can limit the Executive’s power to tap without a
warrant. In a footnote in Justice White’s opinion he indicated that
the Justice Department, speaking through Assistant Attorney General
Kobert Mardian, accepted the view that Congress does have such
power.
CHAPTER 2
Campaign Practices
INTRODUCTION
The campaign to reelect President Nixon in 1972 was expensive,
intense, and long. It began in late March 1969, soon after the Presi-
dent’s inauguration, when John Ehrlichman, counsel to the President,
hired Jack Caulfield to gather political intelligence and derogatory
information on individuals considered to be unfriendly to the neAV
administration. Caulfield and Ehrlichman interviewed a former New
York City policeman, Anthony T. Ulasewicz, in late May 1969 and
hired him to conduct investigations. Ulasewicz was paid secretly by
Herbert Kalmbach, the President's personal attorney, from an unused
reserve of 1968 Nixon campaign funds. The establishment of an offen-
sive intelligence-gathering capability in the White House occurred,
then, before many members of the administration had even moved into
their Washington offices. Other intelligence-gathering capabilities later
initiated included the Plumbers, the efforts of Colson and Hunt, the
activities of Donald iSegretti and others, and the Gemstone conspiracy.
In the Caulfield-Ulasewicz operation, as in several other examples
of campaign practices investigated by the Select Committee, serious
questions are raised as to what the President knew, approved or con-
doned, and what his ethical and legal responsibilities should be for
the campaign conduct of his subordinates.
This report focuses on the Presidential campaign practices that raise
substantial questions of legality, propriety, or ethics and that may,
in the words of 6. Res. 60, “. . . indicate the necessity or desira-
bility ... of new congressional legislation to safeguard the electoral
process by which the President of the United States is chosen.” [Sec.
1(a)]
The report is not an exhaustive compendium of every campaign
practice investigated by the Select Committee. Rather, it is a selection
of those incidents that raise particularly serious questions of campaign
propriety and ethics that, consequently, frame most clearly questions
about the advantages and disadvantages of remedial legislation.
Running through the various topics raised below are several themes
that merit serious discussion by Congress, for they raise fundamental
questions about how our system of free elections should be run. First,
the 1972 Presidential campaign was replete with abuses of positions,
power, and prerogatives, particularly by White House personnel. The
political advantages held by an incumbent President are immense, and
they were constantly used and abused by this administration. A corol-
lary to the abuse of Presidential incumbency for political gain is the
considerable extent to which objectionable campaign practices were
( 107 )
108
conceived, encouraged, and controlled by high-level Presidential aides.
This was true from the early days of the first term, when there was no
campaign organization, and it continued to be so through the 1972
election.
Another important theme is the misuse of large amounts of money,
especially difficult-to-trace cash that was held in secret places in the
White House and elsewhere. The problem with cash in political cam-
paigns is not, of course, unique to the campaign practices facet of the
Select Committee’s investigation ; cash contributions and funds played
key roles in virtually all aspects of the 1972 Presidential election. The
misuse of cash in various campaign practices, as in other areas, demon-
strates the need for strict regulation of its use in political campaigns.
Another recurring theme was the search for intelligence informa-
tion on political opponents which was initiated with the hiring of
Caulfield and ITlasewicz. This intelligence-gathering is central to the
first part of this report : White House-Inspired Political Activities,
1968-71. In addition to Caulfield and Ulasewicz, this part summarizes
the campaign activities of E. Howard Hunt, the Plumbers, and the
various improper uses and attempted uses of Federal agencies by
White House staff members. For example, evidence shows that the
White House attempted to use the Internal Revenue Service to harass
persons perceived as political “enemies”.
In addition, some of the public relations efforts which were initiated
in the White House led to practices which were deceptive and mis-
leading to the public.
The White House also attempted to mislead and deceive the press
on numerous occasions. While legislation in this area is inadvisable,
examples of White House attempts to mislead the press were quite
frequent during the last month of the 1972 campaign and help to ex-
plain the attitude within the White House and some of the tactics
emploved to reelect Mr. Nixon.
With the above areas as background, the second half of the report
outlines what happened in the campaign itself, beginning with the
strategy of the campaign to reelect President Nixon. A basic theme
of this strategy w T as to attack Democratic opponents and prospective
opponents frequently during the primaries.
Such an “attack strategy” was a key ingredient in the 1972 Nixon
campaign. Although many people contributed to this strategy, its
broad outlines were best explained by White House speechwriter
Patrick Buchanan, whose memorandums are summarized below in this
report.
The strategy, though not improper in itself, was ultimately con-
verted by others into gross abuses and unethical manipulations of the
electoral process by persons who had little political experience, and
by i>e rsons, including some with considerable political experience, who
had little respect for fair play in elections. The activities of Segretti
and others — and of their superiors in the White House and at the
Committee To Re-Elect the President — are detailed below in this re-
port. Their activities consisted primarily of surreptitious information
gathering and disruption of Democratic campaigns.
Finally, the report discusses allegations of unfair campaign practices
directed at President Nixon’s campaign. The staff did uncover some in-
stances of improper activity directed at President Nixon’s reelection
109
campaign. The results of these investigations, however, show no pat-
tern of illegal, improper, or unethical activities carried out or con-
doned by any Democratic aspirant or Democratic campaign
organization.
I. WHITE HOUSE-INSPIRED POLITICAL ACTIVITIES,
1968-71
A. Caulfield and Ulasewicz
From the time Richard Nixon was inaugurated President in Janu-
ary 1969, the White House exhibited a strong desire for political
intelligence that helped lead to the events in the campaign of 1972
which have been under investigation by the Select Committee.
Shortly after President Nixon entered the White House on J anuary
21, 1969, the decision was made in the White House to establish an in-
house investigative capability that could be used by the President’s statf
for obtaining sensitive political information. Jack Caulfield was chosen
to perform this function. Following a career in the New York City
Police Department, Caulfield was hired in May 1968 by H. R. Halde-
man to “serve in the security area,” 1 during the 1968 campaign. Caul-
field was responsible for securing staff quarters and working areas of
the Nixon traveling campaign in 1968.
Following the election, Caulfield was interviewed and subsequently
turned down by John Mitchell for the position of Chief TI.S. Mar-
shal. 2 Subsequently in late March 1969, Caulfield met with John Ehr-
lichman, at his White House office, and Ehrlichman asked if Caulfield
were interested in setting up a private security entity in Washington,
D.C. to provide investigative support for the White House. 3 The next
day Caulfield called Ehrlichman with a counterproposal that he join
the White House staff under Ehrlichman and, “besides providing
liaison functions with the various law enforcement agencies, thereby
be available to process any investigative requests from the White
House.” 4 Ehrlichman agreed, and Caulfield was placed on the White
House payroll.
Caulfield told Ehrlichman that he intended to use the services of
Anthony Ulasewicz, a detective with the New York City Police De-
partment w'ho was nearing retirement. Ehrlichman wanted to meet
Ulasewicz, and so in May 1969 Ulasewicz was interviewed by Ehrlich-
man and Caulfield in the VIP lounge at the American Airlines termi-
nal of New York’s La Guardia Airport. Ehrlichman explained to
Ulasewicz that he wanted discreet investigations done on certain po-
litical figures. 5 During their brief conversation, Ehrlichman agreed
to a 1-year contract for Ulasewicz at $22,000 a year plus expenses, and
Ulasewicz explained that he wanted to report to only one individual
and to make no written reports of any kind.
Following the meeting, Ehrlichman told Herbert Kalmbach, the
President’s personal attorney, to make arrangements to put Ulasewicz
on the payroll. Ulasewicz was paid with surplus funds from the 1968
campaign which were held in trustee accounts by Kalmbach.
1 1 Hearings 250.
2 1 Hearings 251.
3 Ibid.
4 Ibid.
5 See Ulasewicz interview, May 8, 1973, pp. 2—3.
110
At 8 a.m., Sunday, June 29, 1969, Herbert Kalmbach met Jack Caul-
field and Tony Ulasewicz at the Madison Hotel in Washington, D.C.
Ulasewicz told Kalmbach he would use the alias Edward T. Stanley
in his work 6 and Kalmbach agreed to send salary and expense checks
to Ulasewicz’ home twice a month.
Samples of checks used to pay Ulasewicz are attached to this report. 7
During the next 3 years Kalmbach paid more than $130,000 for the
Caulfield-Ulasewicz operation. 8
Ulasewicz’ complete travel records are available in the files of the
committee and a summary chronology of Ulasewicz’ travels is appended
to this report. 9 Ulasewicz received all investigative assignments from
Caulfield orally, whom he contacted discreetly by calling under the
pseudonym of Mr. Stanley so that no one at the White House would
know his true identity.
On July 8, 1969, Ulasewicz spoke with Kalmbach by telephone and
agreed to use his own American Express card for air travel and other
necessary expenses. Kalmbach directed Ulasewicz to apply for a sec-
ond American Express card in the name of Edward T. Stanley, and
Kalmbach agreed to guarantee payment on that account. Kalmbach
also agreed to obtain telephone credit cards for Ulasewicz in his real
name and in the name of Edward T. Stanley, 10 thus allowing Ulasewicz
to maintain his secrecy during the course of his upcoming investiga-
tions and inquiries.
At about 1 a.m. on Saturday, July 19, 1969, Senator Edward Ken-
nedy was involved in an automobile accident at Chappaquiddick,
Mass. Later that morning, as news reports of the accident reached
the public, Caulfield was directed by Ehrlichman to send Ulasewicz
to the scene of the accident as soon as possible. Ulasewicz flew to Boston
on the Eastern Airlines shuttle on July 19 and rented a car for the
trip to Martha’s Vineyard and Chappaquiddick. Ulasewicz spent 4
days in the area on this first visit and reported back continually to
Jack Caulfield in the White House, who passed the information on
to Ehrlichman and others as it developed. Ulasewicz spent a good
portion of the remaining summer and much of the fall of 1969 at
Chappaquiddick trying to dig up politically valuable information
from Senator Kennedy’s accident.
Caulfield also gave Ulasewicz a variety of other assignments after
the summer of 1969. During the next 3 years, Ulasewicz traveled to
23 States gathering information on assignments from Caulfield. In
1969 and 1910 Caulfield stated that he got his directions from Ehrlich-
man and sometimes from other high-ranking White House officials,
such as H. R. Haldeman, Lyn Nofziger, and occasionally Charles
Colson.
While Ulasewicz’ investigations covered a variety of political oppo-
nents of the administration and potential threats to the President’s
reelections in 1972 much of his attention focused on Senator Kennedy,
Senator Muskie, Larry O’Brien, and columnist Jack Anderson. A list
6 See Kalmbach diary, June 29, 1969, exhibit 1, p. 214.
7 See exhibit 2, p. 215,
8 Compiled by the committee from subpenaed records.
®This chronology was based on the credit records and travel records. See exhibit 3,
p. 217.
10 See memorandum of July 8, 1969, of Herbert W. Kalmbach attached as exhibit 4,
p. 231.
Ill
of the investigations and background checks conducted by Anthony
Ulasewicz at the direction of Jack Caulfield is attached to this report. 11
After Senator Muskie became the leading Democratic contender,
immediately following the 1970 congressional elections, many of
Ulasewicz’ investigations were directed toward discovering valuable
political information on Senator Muskie. 12
Ulasewicz usually worked alone on the assignments he was given by
Caulfield. However, in December 1971, Anthony LaRocco, a former
New York City police detective was hired to assist Ulasewicz. 13
LaRocco assisted Ulasewicz in four or five investigations in New
York City from December 1971 until the third week in January 1972
when Ulasewicz informed LaRocco that the operation was terminated.
LaRocco received a total of about $1,500 for his work on behalf of the
White House. 14
1. ELECTRONIC SURVEILLANCE
There has been no evidence presented to the Senate Select Com-
mittee which indicates that either Ulasewicz or LaRocco engaged in
any electronic surveillance in their assignments for the White House.
However, Jack Caulfield was involved twice in the implementation
and monitoring of electronic surveillance.
The first occasion was in June 1969 when Ehrlichman called Caul-
field into his office and said that there was an urgent need for a
national security wiretap on the telephone of columnist Joseph
Kraft. 15 Caulfield said that Ehrlichman told him that he did not want
to go through the FBI, since it. was a sieve. Ehrlichman pressed
Caulfield to place the tap on as soon as possible. Ehrlichman testified
that he w’as sure that he discussed that tap with President Nixon. 16
Caulfield contacted Jack Ragan, a former FBI agent and friend
from the 1968 campaign for whom Caulfield had found a job at the
Republican National Committee in 1969. Caulfield told Ragan he had
a directive from Ehrlichman to place a wiretap on Kraft’s phone
because of a matter involving “high priority national security.” 17
Ragan and Caulfield drove to Kraft’s residence and concluded from
observation of the neighborhood and the location of the telephone lines
that it could be a very difficult tap to install. Caulfield went back to
Ehrlichman and explained the serious problems they would encounter
in attempting to install the tap. Caulfield testified that Ehrlichman
told him that the tap had to be installed. 18
Ragan told Caulfield he could not implement the wiretap unless
he had the pairs and cable numbers of the telephone lines in the Kraft
home. Caulfield agreed to obtain the information and did so by re-
questing it from a friend of his in the Secret Service. 19 Caulfield ex-
plained to the individual in the Secret Service that he needed the in-
formation as a matter of national security. The information was ob-
tained for Caulfield who in turn gave it to Ragan. 20
11 See exhibit 5, p. 232. This list was compiled from interviews with Ulasewicz, Caulfield,
John Dean and Tony LaRocco. ,
12 These investigations are listed at numbers 57 through 61 of exhibit 5.
13 Interview with LaRocco, September 21, 1973, p. 1.
14 Ibid.
15 21 Hearings 9687. At the 'time of this wiretap, neither the Supreme Court nor any Act
of Congress prohibited national security wiretaps without prior judicial authorization.
18 6 Hearings 2535.
17 21 Hearings 9698.
18 21 Hearings 9690.
18 21 Hearings 9690-91 ; name to be submitted to Senator Ervin.
20 21 Hearings 9691.
112
Eagan also asked Caulfield about acquiring appropriate credentials
from the telephone company to protect himself while implementing the
wiretap and to insure the discretion of the assignment. Caulfield dis-
cussed the problem with Ehrlichman, who arranged for Caulfield
to speak with John Davies of the White House staff. 21
Caulfield told Davies he needed a telephone installer’s card for a
job conce rning a “national security matter” he had been given by
Ehrlichman. 22 Caulfield had the impression that Ehrlichman and
Davies had already talked about the matter. Davies did provide a
telephone installer’s card to Caulfield, who in turn passed the card on
to Eagan. ....
About 1 week or 10 days after he made his initial request to Caul-
field to implement the wiretap, Ehrlichman called Caulfield and di-
rected him to desist from implementing the wiretap because J. Edgar
Hoover would take care of it. Ehrlichman testified that the wiretap
in 1969 “never happened.” 23 Caulfield then called Eagan to direct
him not to implement the tap, but Eagan told him, “it’s done.” 24 Caul-
field testified that Eagan and an unidentified friend of his from New
York had already come to Washington and installed a listening device
on a telephone pole in the rear of Kraft’s residence. 25 Caulfield met
with Eagan at the Congressional Hotel and told him he had been di-
rected by Ehrlichman not to place the wiretap. Eagan explained to
Caulfield how he and his friend had placed the tap and gave Caulfield
a tape which allegedly contained some conversation from Kraft’s tele-
phone. 26 Eagan told Caulfield that Kraft’s voice was not on the tape
and that the overheard conversation may have involved a maid.
Caulfield testified that he took the tape from Eagan to his office,
where he ran out about 40 or 50 feet of it and destroyed it by placing
it in his “burn bag.” Caulfield kept the remaining tape in his office for
about a month or two and then destroyed it and the reel itself by plac-
ing them in the burn bag in the White House. 27
Caulfield claimed that neither he nor Ehrlichman nor anyone else
ever listened to the tape that Eagan gave him. Eagan was paid no
money for his work in placing the wiretap.
Eagan, Ulasewicz, and Caulfield continued to be social friends after
this incident in 1969, lunching together on numerous occasions when
Eagan came to Washington. During 1969 and 1970, Eagan gave ap-
proximately 8 checks to Caulfield totaling about $800. While Caul-
field had no recollection of the purpose of these payments, Eagan said
they were to obtain information from police departments. 28
Finally, there is no evidence at the present which indicates that
Caulfield had Eagan conduct any other electronic surveillance. Eagan
did, on occasion, ask Ulasewicz if he were interested in performing-
jobs for Eagan, but no actual work assignments developed from these
suggestions. 29
The second occasion when Caulfield was involved in electronic sur-
veillance came in the fall of 1970 when Ehrlichman requested Caul-
21 21 Bearings 9692.
22 21 Hearings 9693.
23 6 Hearings 2535.
21 Caulfield Interview, September 11, 1973, p. 3.
25 21 Hearings 9694.
20 Ibid.
27 21 Hearings 9695.
28 See Eagan Interview, August 28, 1973, p. 2.
22 21 Hearings 9699.
113
field to monitor the results of the Secret Service wiretap of F. Donald
Nixon. Caulfield monitored the tap for about 3 weeks before the proj-
ect was terminated. 30 Ehrlichman refused to discuss the wi retap with
the Select Committee, citing national security privilege. 31 The Secret
Service, at the direction of the White House counsel, would not allow
agents involved to testify about the matter, claiming that it fell with-
in the “protective function” of the Secret Service and therefore was
privileged.
2. OPERATION SAND WEDGE
In late 1970 and early 1971, Jack Caulfield began thinking
about establishing a private security organization when he left the
White House. In the winter and early spring of 1971, Caulfield recalled
having frequent discussions about the idea with Myles Ambrose, then
Commissioner of Customs. 32 Ambrose had discussed the idea of pri-
vate security business with Mike Acree, then Assistant Commissioner
of the IRS. Sometime in late 1970 or early 1971, Ambrose introduced
Acree to Caulfield. 33
Caulfield told Acree that Ambrose and Caulfield were planning to
open a private security fixm in Washington, D.C. Acree had friends
at Intertel, a private security firm in Washington, and thought that
such a business might be a good means of retiring from Federal serv-
ice. Acree said that at no time in these early discussions did Caulfield
mention anything about a “covert operation.” Caulfield told Acree
that Ambrose wanted to head the new organization, but that Caulfield
was slowly trying to move him out of the picture. 34
Sometime in the spring of 1971, Caulfield told John Dean he was
thinking about leaving the White House staff to establish an in-
vestigative and security consulting corporation. Caulfield explained
to Dean that the proposed firm could be operational by campaign
time and could provide important help to the reelection campaign and
to the Republican National Committee. Caulfield’s basic idea was
that the security firm would provide services for large corporations
and that, with large fees from them, it would be able to provide free
services to the 1972 reelection campaign. Dean advised Caulfield to
secure the advice of an attorney because such a plan was filled with
legal problems. 36
In the meantime, Caulfield discussed his proposal seriously with
Joe Woods, Mike Acree, Roger Barth, and Tony Ulasewicz. Joe
Woods, the brother of Rose Mary "Woods, was a friend of Caulfield’s
from the 1968 campaign whom Caulfield envisioned as the vice
president of the new corporation who would head up the Chicago
office.
Caulfield also says he discussed the proposal with Rose Mary
Woods. He explained to her that he was interested in establishing a
security entity and that, if he could get funding, he would be offering
a principal position to her brother. 36 Miss Woods only recalled that
Caulfield came to her and explained that he wanted to set up “sort of
30 21 Hearings 9700,
31 Ehrlichman Interview, January 10, 1974, p. 9.
33 21 Hearings 10342.
33 Acree interview, August 1, 1973. Acree subsequently recalled his first meeting with
Caulfield occurring on March 8, 1971, at the EOB. (See Acree letter, June 27, 1974.)
33 Id. at p. 2.
35 3 Hearings 924.
33 Ibid.
Mi-687 0 - 74 - 10
114
a PR” operation with her brother based in the Midwest. She testified
she was opposed to the idea because she felt her brother was more
qualified to head such a corporation than was Caulfield. 37 Caulfield
testified that Miss Woods had general knowledge that he could obtain
information of a political nature, but that he never discussed specific
details of Ulasewicz’ operations with her. Caulfield said he requested
Miss Woods’ assistance in locating Donald A. Nixon on one occasion
for Tony Ulasewicz. 38
Miss Woods testified that she had no knowledge that Caulfield had
an independent investigative capability in the White House. 39
Caulfield also talked with Ulasewicz about forming a private security
business. Ulasewicz’ assignments had declined as 1971 progressed, and
Caulfield had often talked with Ulasewicz about entering private
business when Caulfield left the Government. Caulfield envisioned
Ulasewicz as head of the New York office of the new corporation, with
primary responsibilities for offensive intelligence gathering. Ulasewicz
subsequently rented an apartment at 321 East 48th Street (apartment
11 — C) , New York City, that could be used as an office for the private
detective agency. 40
In the late summer of 1971, Caulfield met with Acre©, Barth, and
Joe Woods for about 2 hours at his home to discuss the proposal. 41
Following the meeting, Caulfield told Dean of the group’s plans,
and Dean asked Caulfield to commit the proposal to writing. Caulfield
then drafted the memorandum entitled “Operation Sandwadge” 42
The document called for an offensive intelligence-gathering opera-
tion which would be clandestinely based in New York and would be
able to infiltrate campaign organizations and headquarters with
“undercover personnel.” 43 The offensive capability would also in-
clude a “black bag” capability, “surveillance of Democratic primaries,
convention, meetings, et cetera,” and “derogatory information in-
vestigative capability, worldwide.” 44
In addition, the memorandum outlined an operating cover for the
entity. The new corporation would hire itself out to large Republican
corporations, whose fees would finance the clandestine and offensive
capability envisoned in the memorandum. Caulifield emphasized the
clandestine nature of the operation :
The offensive involvement outline above would be sup-
ported, supervised and programed by the principals, but
completely disassociated (separate foolproof financing) from
the corporate structure and located in New York in extreme
clandestine fashion. 45
37 22 Hearings 10243.
38 22 Hearings 10346.
39 22 Hearings 10242.
40 See exhibit 6, p. 237. The apartment was also the place for a meeting on January 10,
1972, among Caulfield. Ulasewicz, and Gordon Liddy when Liddy checked up on Ulasewicz
financial records (Caulfield interview, Sept. 12, 1973, p. 5).
41 Woods, Barth, and Acree say that the meeting occurred at Caulfield’s home. Caulfield
testified that the meeting occurred at the Fairfax Country Club in Virginia. 22 Hearings
10349.
42 See copy of the document at exhibit 7, p. 240. Caulfield recalls that the proposal was
actually drafted in June 1971. Since there is no evidence that the proposal was circulated
at the meeting at Caulfield’s home in midsummer, Caulfield probably didn’t actually write it
until later in the summer.
43 See exhibit 7, page 240.
44 Ibid.
43 Ibid.
115
Caulfield noted in the memorandum that Ulasewicz would head tha
clandestine operation in New York, claiming that “his expertise in
this area was considered the model for police departments throughout
the Nation and the results certainly proved it.” 46 Woods would be in
charge of the Midwestern office of the new corporation, heading covert
efforts and acting as liaison to retired FBI agents “for discreet in-
vestigative support” from the FBI. Mike Acree would provide “IRS
information input” and other financial investigations that would help
support the New York City operation. 47
In testimony before the Select Committee, Caulfield claimed that
“black bag capability” meant :
... the carrying of moneys that might be collected in a
political campaign. What I meant to propose by that was that
Mr. Ulasewicz and anyone else that might be connected with
such a proposed undertaking would have the capability to
supervise the security of the carrying of moneys which might
be collected during the course of a campaign. 48
However, earlier in his memorandum, on page 2, Caulfield discussed
a former FBI agent who was known as a “black bag” specialist while
at the FBI. Caulfield acknowledged that the term “black bag spe-
cialist,” meant an individual who specialized in breaking and entering
for the purpose of placing electronic surveillance. 49 In addition, Caul-
field noted that the term “bag job” in the intelligence community
meant a burglary for the placement of electronic surveillance. 50 Thus,
it appears that the capability to which Caulfield was referring in his
Sandwedge proposal was one of surreptitious breaking and entering
for the purpose of placing electronic surveillance, quite similar in
nature to the Gemstone operation which ultimately evolved. This in-
terpretation is further buttressed by the budgetary request for $15,000
for electronic surveillance equipment, noted on the attachment to the
plan that was submitted to John Dean. 51
In August or early September 1971, Caulfield brought Dean a copy
of the Sandwedge memorandum. Dean testified that Caulfield wanted
to discuss the matter with John Ehrlichman and Attorney General
John Mitchell. 52 Dean recalled that the memo provided for “bag men
to carry money and engage in electronic surveillance.” 53 On Septem-
ber 17, 1971, Caulfield wrote a followup memorandum to John W.
Dean in which he explained how the new security corporation could
handle the security needs for the 1972 campaign and the Republican
National Committee. 54 In addition, Caulfield had lunch in September
1971 with Dean and Magruder to discuss “Project Sandwedge.” 55
Dean discussed the Sandwedge proposal with Attorney General
Mitchell. 56 Mitchell said he was not interested in the proposal since he
« Ibid.
47 Id. at p. 248. Caulfield also testified that he showed the Operation Sandwedge memo-
randum to Acree, 22 Hearings 10350. However, Acree denied that he saw a draft or copy
of the Sandwedge memorandum. (Acree letter, June 27. 1974, p. 6).
48 21 Hearings 9731-32.
49 21 Hearings 9737.
60 Ibid.
51 3 Hearings 1121.
62 3 Hearings 924.
63 3 Hearings 925.
54 3 Hearings 1124.
55 2 Hearings 786.
66 3 Hearings 925.
116
felt that the principal problems of the reelection campaign related to
security against potential demonstrators. In addition, Dean testified
that Mitchell wanted a lawyer to handle any such operation. 57 In his
testimony, Mitchell admitted to being aware of the concept that Caul-
field was proposing, but he also claimed that he had never seen a copy
of the Sandwedge memorandum. 58 Mitchell did, however, talk to H. It.
Haldeman about the Sandwedge operation, but said that Haldeman
also disapproved of the operation because of “the lack of experience”
of the individuals involved. 59
Mitchell did not, however, wish to discuss the proposal with Caul-
field, and so Dean kept putting Caulfield off whenever Caulfield raised
the subject.
However, Caulfield also took the Sandwedge proposal to John Ehr-
lichman. Ehrlichman testified that Caulfield brought him a 3 or 4 page
double-spaced typewritten prospectus concerning the establishment of
a private security entity. 60 Ehrlichman said he told Caulfield that he
could not help him on the proposal. However, Ehrlichman mentioned
Operation Sandwedge to Dean, and according to Dean, said that he
would like to keep Tony Ulasewicz around during the campaign even
though he did not think much of Caulfield’s grant proposal. Dean
testified that Ehrlichman also informed him that Mitchell and Caul-
field should meet to discuss Ulasewicz’ future. 61
Because of Attorney General Mitchell’s lack of enthusiasm for Caul-
field’s project, Dean let the matter ride and did not give Caulfield a
specific “yes” or “no.” However, in the fall of 1971, it was decided to
switch the payments from Kalmbach to Ulasewicz to a cash basis.
Therefore, Kalmbach gave Caulfield and Ulasewicz $50,000 in cash in
the fall of 1971, which was meant to fund Ulasewicz’ activities at least
through the campaign of 1972. 62
By November 1971 Caulfield knew that his proposal was going no-
where. However, he wanted to work as a scheduling aide to Attorney
General Mitchell in the upcoming campaign, and therefore asked
Dean to get him an appointment with Mitchell. Caulfield met with
Attorney General Mitchell on November 24, 1971, just prior to the
Attorney General’s meeting with G. Gordon Liddy. 63
Prior to the meeting between Caulfield and Mitchell, Caulfield di-
rected Ulasewicz to go to New Hampshire and investigate the primary
campaign of Congressman Pete McCloskey. This effort was designed
in part to gather valuable political information for the potential New
Hampshire primary, as well as to show Attorney General Mitchell the
capabilities of Caulfield and Ulasewicz. Ulasewicz investigated the
McCloskey campaign in New Hampshire from November 18 through
November 21, 1971. While in New Hampshire, he interviewed a num-
ber of campaign workers and volunteers in the organization under his
usual pretext of being a newspaper reporter. 64 Ulasewicz’ report on
the New Hampshire campaign was forwarded over to the Attorney
General along with some follow-up reports that were written after a
W Ibid.
68 4 Hearings 1605.
69 Interview of John Mitchell, June 27, 1973.
60 6 Hearings 2537.
81 3 Hearings 925.
62 See interview with John Sutter, attorney for Ulasewicz, April 30, 1974.
63 3 Hearings 925.
64 3 Hearings 1134.
117
subsequent visit to the McCloskey campaign headquarters 2 weeks
later. 65
Mitchell discussed possible employment in the campaign with Caul-
field at their meeting on November 24, 1971. However, Operation
Sandwedge may not have been turned off at this meeting because Caul-
field continued to refer to his intelligence-gathering capabilities as
“Operation Sandwedge.” 66 For example, in a memorandum dated
December 11-12, 1971, Caulfield described “a Sandwedge-engineered
penetration of McCloskey’s volunteer headquarters in Washington,
D.C.” 67 This refers to a visit by IJlasewicz to the McCloskey head-
quarters to obtain information. The memo also refers to future ar-
rangements to infiltrate the New Hampshire McCloskey campaign. 68
In late December 1971, Mitchell asked Dean for a summary of Caul-
field’s and his agent’s activities. Dean wrote Mitchell on January 12,
1972, that Caulfield had prepared a list of the activities so that Mitchell
could review them in order to decide whether or not further funding
would be made available for Mr. Ulasewicz. 69 Mitchell stated that, this
memorandum was the last discussion of Sandwedge and that the pro-
posal was finally killed then. 70 Ulasewicz continued to be funded
through cash payments after this time, but his political investigations
dropped off considerably until after the break-in at the Democratic
national headquarters on June 17, 1972.
“Operation Sandwedge” as envisioned by Jack Caulfield was a
significantly similar precursor to the Gemstone plan which was later
implemented in the campaign of 1972. The plans calling for the crea-
tion of an offensive intelligence-gathering capability were basically
what the Gemstone plan was designed to do. The placement of infiltra-
tors in campaigns, surveillance of the Democratic convention and
meetings, the creation of a “derogatory information investigative
capability,” and the creation of a “black bag” capability were the very
measures that the Gemstone plan in fact carried out. Discussions of the
Sandwedge proposal appear to have continued until at least Janu-
ary 12, 1972, a mere 2 weeks prior to the initial meeting in Attorney
General Mitchell’s office when the Gemstone plan was first revealed.
The relationship between the Sandwedge proposal and the Gem-
stone plan suggested by Jeb Magruder’s statement:
In November 1971, it was indicated to me that the project,
[Sandwedge] was not going to get off the ground and conse-
quently G. Gordon Liddy came into the picture after that. 71
3. OTHER SURVEILLANCE SENATOR EDWARD M. KENNEDY
Following his investigation of the accident at Chappaquiddick,
Ulasewicz kept Senator Kennedy under physical surveillance on a
selected basis. In the fall of 1971, John Dean testified that he received
a call from Larry Higby, who said that Haldeman wanted 24-hour
surveillance placed on Senator Kennedy and regular reports of his
activities forwarded to the White House. 72
05 3 Hearings 1142-44.
60 3 Hearings 926.
07 3 Hearings 1145.
08 IUd.
69 3 Hearings 1149.
70 Mitchell interview, June 27, 1973.
71 2 Hearings 786.
72 3 Hearings 922.
118
Dean passed the request to Jack Caulfield, who emphatically stated
that he thought 24-hour surveillance was a silly idea. Caulfield con-
tended that it would require several men and might result in Senator
Kennedy discovering he was under surveillance. In addition, the 24-
hour surveillance could be easily misinterpreted as a threat on his life,
and the police or FBI could be called in to investigate. 73
Dean agreed with Caulfield’s assessment of the idea and convinced
Iligby that the plan was unwise. 74 As an alternative, Caulfield was
directed to keep track of Senator Kennedy’s activity and to pursue
specific investigations that could turn up valuable political mtelli-
f ence. As a result, many of the investigations listed above, conducted
y Anthony Ulasewicz, were a result of this original directive from
Haldeman.
Other Investigations of Senator Kennedy
There were other instances of White House initiated investigations
designed to discredit a potential Presidential bid by Kennedy.
In the summer of 1969, John Dean, then at the Justice Department,
testified that he was instructed by Deputy Attorney General Richard
Kleindienst to contact Cartha DeLoach, Deputy Director of the FBI,
and “obtain from him information regarding the foreign travels of
Mary Jo Kopechne.” 75 (Kopechne was the woman who died in the
Chappaquiddick auto accident.) Kleindienst told Dean that the White
House wanted this “very important information.” 76 Dean obtained
the information and passed it on to Caulfield at the White House. 77
Dean was not sure why he was asked to be the courier of the FBI in-
formation, but he speculated before the Select Committee that he was
chosen “so that others could deny they had done so, should the matter
become known.” 78
In another incident, in about July 1971, E. Howard Hunt, who was
working part-time for the White House, discussed investigating Sen-
ator Kennedy with his employer, Robert Bennett, of Mullen & Co., a
Washington, D.C., public relations firm. Hunt had been asked by
Colson or Bennett to investigate Senator Kennedy’s activities. 79
Hunt had asked Bennett if he knew people with information on the
Kennedys, and Bennett mentioned Clifton DeMotte, a General Serv-
ices Administration employee in Rhode Island who had worked in
John Kennedy’s 1960 campaign and was, Bennett believed, antagonis-
tic toward the Kennedy family. 80 Although Bennett testified that he
warned Hunt that DeMotte might not know anything politically use-
ful, 81 Hunt says he also told Colson that he had been given “credible
information” 82 that DeMotte was worth contacting.
Hunt says Colson asked him to interview DeMotte without disclos-
ing Hunt’s White House connection. Hunt said he would need an
alias, false documents, or perhaps a physical disguise for the inter-
73 21 Hearings 9725.
74 3 Hearings 923.
76 3 Hearings 922.
76 Ibid.
77 Dean Interview, July 26, 1973, p. 4.
78 Ibid.
70 9 Hearings 3677. See also Bennett interview, July 27, 1973.
80 Robert Bennett interview, July 27, 1973.
81 Ibid.
82 9 Hearings 3677—78. Unless otherwise indicated, details that follow are from Hunt’s
public testimony.
119
view. Hunt testified that Colson was wary of approaching the FBI or
the Secret Service with such a request, and so he agreed to “look into”
obtaining the material from the CIA.
Gen. Robert Cushman, formerly Deputy Director of the CIA, testi-
fied that on July 7, 1971, he received a telephone call from Ehrlichman,
in which Ehrlichman said, “Howard Hunt had been hired as a con-
sultant to the White House on security matters, that he would be
coming to pay me a visit, and could I lend him a hand.” 83 Alleged
notes taken by Cushman’s secretary during the telephone conversa-
tion show that Ehrlichman explained that Hunt was working for the
President and should be given “carte blanche” by Cushman. 84 How-
ever, Cushman denies hearing any such language by Ehrlichman dur-
ing their conversation. 85
Hunt subsequently obtained the disguise materials — a driver’s li-
cense, a wig, and a speech-altering device after a meeting on July 22,
1971, with Cushman. 86
Hunt testified that he then went to Rhode Island on or about July
28, 1971, and, in disguise, interviewed DeMotte. 87 Colson and Hunt
decided that the information obtained in the interview was “useless.” 88
In another incident, Watergate figure Alfred Baldwin testified that
he was assigned by James McCord to monitor visitors to Senator Ken-
nedy’s senatorial office for a brief period in May 1972. The purpose
of this surveillance, Baldwin testified, was “basically to determine
what groups were in the area of the Senator’s office.” 89
B. The Plumbers
Another in-house investigative arm of the White House, “the Plumb-
ers,” conducted political as well as national security-related investi-
gations during its existence in 1971. This report will not attempt to
detail all facets of the Plumbers’ actions. Excluded, for example, are
David Young’s declassification program, the investigation into the
SALT talk leaks, the “Radford” investigation, and responsibilities
for retracing U.S. policy stands in Southeast Asia for the then on-
going peace negotiations. However, the investigation by the Plumbers
of Daniel Ellsberg was reviewed by the committee primarily because
of the political implications inherent in that investigation, and its
relationship to the coverup. The following facts develop the origin
and motivations of the Ellsberg assignment.
On J une 13, 1971, the New York Times published the first of a three-
part series of what came to be known as “The Pentagon Papers.”
President Nixon viewed this breach of national security with the ut-
most gravity. 90 As the President related in his May 22, 1973, address
to the Nation :
83 8 Hearings. 3290.
84 See notes in files of committee.
85 Cushman executive session, March 7, 1974.
86 8 Hearings 3292.
87 9 Hearings 3678. DeMotte, however, claims that Hunt was not in disguise when
DeMotte was interviewed. See interview, March 30, 1974, p. 4.
88 9 Hearings 3678.
89 1 Hearings 396.
00 Speech of President Richard M. Nixon ; May 22, 1973 ; as quoted in “Watergate :
Chronology of a Crisis” Congressional Quarterly (Washington, D.C., August 1973), p. 90.
According to Egil Krogh, one of the Plumbers, leaks regarding the SALT talks so upset
the President that, in a meeting with Ehrlichman and Krogh, he pounded the table with
his fists and said such activity had to be stopped.
120
Therefore, during the week following the Pentagon Papers
publication, I approved the creation of a special investigative
unit within the White House which later came to be known
as the “Plumbers.” This was a small group at the White
House whose principal purpose was to stop security leaks and
to investigate other sensitive security matters. 91
The President went on to explain the choice of Daniel Ellsberg as a
target of the Plumbers’ investigation :
At about this time the unit was created, Daniel Ellsberg
was identified as the person who had given the Pentagon
Papers to the New York Times. I told Mr. Krogh that as a
matter of first priority, the unit should find out all it could
on his motives. Because of the extreme gravity of the situa-
tion, and not knowing then what additional national secrets
Mr. Ellsberg might disclose, I did impress upon Mr. Krogh
the vital importance to the national security of his assign-
ment. I did not authorize and had no knowledge of any illegal
means to be used to achieve this goal. 02
David Young and John Ehrlichman have also testified about the
seriousness of the national security leaks leading to the creation of
the Plumbers. 63
Supervision of this “national security assignment of the utmost
gravity” was first offered to Pat Buchanan, a Presidential speech-
writer, on July 6, lffTl. 94 Buchanan testified that his White House
responsibilities consisted of political and public relations-related
tasks — speechwriting, daily news summaries, and preparation for
press briefings. 95 The Ellsberg assignment was, in Buchanan’s own
words, “a waste of my time and my abilities.” 96 At about this same
time, a low key group to handle domestic and intra-governmental
problems with leaks was also created in the White House with Fred
Malek in charge. 97
Supervisory responsibilities for the Plumbers ultimately fell on
Presidential assistant John D. Ehrlichman with help from Charles
Colson. Ehrlichman’s assistant, Egil “Bud” Krogh, Jr., and former
Kissinger aide David Young were given operational responsibility
for the project, which employed both E. Howard Hunt and G. Gordon
Liddy.
Prior to his being hired, Hunt had a telephone conversation with
Charles Colson about the Ellsberg matter. Part of that conversation
was the following exchange :
C. Let me ask you this, Howard, this question. Do you
think with the right resources employed that this thing could
be turned into a major public case against Ellsberg and co-
conspirators ?
91 Id. at p. 90.
92 m a.
93 6 Hearings 2518. See also David Young Interview, July 23, 1973.
94 10 Hearings 3911.
95 10 Hearings 3904-05.
99 3 Hearings 1111-16.
97 Buchanan not only verbally rejected the assignment but warned against the media
approach In attacking Ellsberg. See 6 Hearings 2650.
121
H. Yes ; I do, but you’ve established a qualification here that
I don’t know whether it can be met.
C. What’s that ?
H. Well, with the proper resources.
C. Well, I think the resources are there.
H. Well, I would say so, absolutely.
C. Then your answer would be we should go down the line
to nail the guy cold ?
H. Go down the line to nail the guy cold ; yes . . .
C. And that, at this point, the profit to us is in nailing any
son-of-a-bitch who would steal a secret document of the Gov-
ernment and publish it or would conspire to steal . . .
H or aid and assist in its . . .
C. And that the case now can be made on the grounds where
I don’t see that we could lose.
H. It has to be made on criminal grounds and . . .
C. It also has to be this case, won’t be tried in the court, it
will be tried in the newspapers. So it’s going to take some re-
sourceful engineering to . . . 98
Hunt added later in the conversation, “I want to see the guy hung
if it can be done to the advantage of the administration. 99 Colson had
earlier commented, “. . . we might be able to put this bastard into a
helluva situation and discredit the new left.” 1 With Colson’s recom-
mendation, Hunt was subsequently hired to work in the Plumbers’
group.
On July 9, 1971, Hunt and Colson telephoned retired CIA agent
Lucien Conein. According to Hunt, Colson used the alias “Fred
Charles,” and they attempted to elicit from Conein derogatory in-
formation about Ellsberg’s activities in Vietnam. 2 Then on July 28,
1971, Hunt wrote a memo to Charles Colson which detailed an opera-
tional plan for “neutralization of Ellsberg.” 3 The objective of the
memo was to determine “how to destroy his public image and credi-
bility.” 4 Hunt proposed seeking CIA assistance in performing “a
covert psychological assessment/evaluation on Ellsberg.” 5
However, Egil Ivrogh and David Young were also concerned about
Ellsberg’s public image. They acknowledged the suggestion to obtain
Ellsberg’s psychiatric files in Hunt’s “neutralization” memorandum
in their August 3, 1971, memorandum to Charles Colson. 6 In the mean-
time, as noted earlier, Hunt received disguise material from the CIA. 7
CIA equipment and assistance in developing a psychological profile
of Ellsberg overstepped the Agency’s legal bounds by being involved
with domestic intelligence-gathering and internal security.
When it was determined that the initial CIA psychological profile
was inadequate, 8 a “covert operation” was recommended to supplement
the initial profile. This covert operation led to the break-in at Ells-
98 9 Hearings 3878-79.
09 9 Hearings 3879.
1 9 Hearings 3878.
2 Colson and Hunt taped the conversation. 9 Hearings 3881.
8 9 Hearings 3886.
4 Ibid.
6 9 Hearings 3886.
0 See 9 Hearings 3893.
7 9 Hearings 3675 ; 8 Hearings 3235.
8 Note point No. 2 of the Aug. 11, 1971, memorandum to John D. Ehrlichman from
Krogh and Young. 6 Hearings 2644.
122
berg’s psychiatrist’s office. Interestingly, according to Hunt, the psy-
chiatrist’s office had been pinpointed through what Hunt believed
might have been FBI wiretaps made available to the Plumbers. 9 On
August 11, 1971, Krogh and Young wrote to Ehrlichman :
. . . We would recommend that a covert operation be
undertaken to examine all the medical files still held by Ells-
berg’s psychoanalyst covering the 2 -year period in which he
was undergoing analysis. 10
Ehrlichman approved the recommendation with the qualification of
“if done under your assurance that it is not traceable.” 11
Ehrlichman maintained, however, that he had no specific prior
knowledge of the Fielding break-in. His explanation of what he
envisioned as the “covert operation” offered the following alternatives :
Now, if you are asking me whether this means that I had
in my contemplation that there was going to be a breaking
and entering, I certainly did not. I heard a remark by a mem-
ber of the committee to the effect that there are only two ways
that one can see a medical file, and that is either to get the
doctor to violate his oath or to break or enter. Well, I know
that is not so, and I imagine those of you who have been in
private practice well recognize there are a lot of perfectly
legal ways that medical information is leaked, if you please,
and when I saw this that is the thing that occurred to me, that
by one way or another this information could be adduced by
an investigator who was trained and who knew what he was
looking for. 12
Ehrlichman also offered a national security defense to the overall
Ellsberg assignment in his testimony before the Select Committee.
Ehrlichman noted that a psychiatric profile would be invaluable in
determining :
. . . whether we were dealing here with a spy ring or just
an individual kook, or whether we were dealing with a serious
penetration of the Nation’s military and other secrets, in such
an uncertain situation that a profile of this kind might, cer-
tainly not positively, but might add some important addi-
tional ingredients which would help to understand the dimen-
sions of the problem. 13
Ehrlichman, however, testified that he did not approve of an actual
break-in to Dr. Fielding’s office. 14 In addition, David Young has
testified that there were legitimate national security considerations
for obtaining Ellsberg’s psychiatric file. 15
E. Howard Hunt, however, testified that from the beginning the
Ellsberg assignment had strong political and public relations over-
tones. When asked what was to be done with the derogatory informa-
tion about Ellsberg collected by Hunt and the other Plumbers, Hunt
replied :
0 9 Hearings 3786.
10 6 Hearings 2645.
11 Ibid.
12 6 Hearings 2547.
13 6 Hearings 2601.
14 6 Hearings 2815-16,
15 See David Young interview, July 23, 1973.
123
My assumption was that it would be made available by
Mr. Colson or someone in his confidence to selected members
of the media. 16
Ehrlichman’s role in orchestrating this political use of the media
emerges in his approval of the August 26, 1971, memorandum to him
from David Young. 17 The last question put to Ehrlichman by Young
in the memorandum was: “(9) How quickly do we want to try to
bring a change in Ellsberg’s image?” 18 David Young, who also testi-
fied about the national security need for the psychiatric file, added :
In connection with issue (9), it is important to point out
that with the recent article on Ellsberg’s lawyer, Boudin, we
have already started on a negative press image for Ellsberg.
If the present Hunt/Liddy Project No. 1 is successful, it will
be absolutely essential to have an overall game plan developed
for its use in conjunction with the congressional investiga-
tion. * * *
* * * I mentioned these points to Colson earlier this week
and his reply was that we should just leave it to him and he
would take care of getting the information out. I believe,
however, that in order to orchestrate this whole operation we
have to be aware of precisely what Colson wants to do. 19
Ehrlichman responded to this information the following day in a
memorandum to Charles Colson :
On the assumption that the proposed undertaking by Hunt
and Liddy would be carried out and would be successful. I
would appreciate receiving from you by next Wednesday a
game plan as to how and when you believe the materials
should be used. 20
The allusion in the earlier Young memorandum to “the recent article
on Ellsberg’s lawyer” referred to one of Colson’s attempts to discredit
Ellsberg and those around him in the press. Using FBI files, Howard
Hunt developed a profile on Ellsberg’s attorney, Leonard Boudin.
Hunt took the materials to Colson and says he told him :
* * * I find Boudin’s name cropping constantly in these
FBI reports, described Boudin or his long background of
associations with the extreme left, to put it mildly, and said
I felt we had enough material here on him to put together an
article of sorts * * * Colson and I certainly discussed it,
because then the name Jerry terHorst came into play. 21
Hunt testified that Colson gave the materials developed by Hunt to
terHorst, a Detroit News reporter. 22 Some months later an article ap-
peared in the Detroit News on the Ellsberg defense fund and the
attorneys involved, including Boudin, although terHorst denied that
Hunt’s information was the basis for his article. 23
16 9 Hearings 3666.
17 6 Hearings 2646.
is Ibid.
10 Ibid.
20 6 Hearings 2651.
21 Testimony of Howard Hunt, Sept. 10, 1973, executive session transcript, p. 121.
22 Id. at 122.
23 9 Hearings 3895.
124
White House resources were thus used to develop and disseminate
derogatory material concerning Ellsberg as part of a negative public
relations campaign against the administration’s political opponents.
C. Investigation of the Brookings Institution
From its early days in office, the Nixon administration was con-
cerned about what President Nixon, in Patrick Buchanan’s words, felt
was the “* * * institutionalized power of the left concentrated in the
foundations that succor the Democratic Party.” 24 The Brookings In-
stitution, an influential nonprofit public policy center in Washington,
D.C., was of particular interest to Buchanan and others in the admin-
istration. In a March 3, 1970, memorandum to the President, Buchanan
suggested that the administration encourage and assist the establish-
ment of :
... A Republican Conservative counterpart to Brook-
ings, which can generate the ideas Republicans can use, which
can serve as a repository of conservative and Republican intel-
lectuals, the way Brookings and others do for the Democrats. 25
Although Buchanan envisioned no more than directing “. . . future
funds away from the hostile foundations, like Brookings,” 26 other
Presidential aides apparently envisioned stronger tactics.
During the summer of 1971, Jack Caulfield testified that he and
Charles Colson discussed a possible “investigation” of Leslie Gelb,
then at the Brookings Institution and formerly a consultant to the
National Security Council. Colson, like others in the White House,
was concerned about the recent leak of the Pentagon Papers, and he
had read that Brookings was planning a study of Vietnam based upon
“documents of a current nature.” 27 According to Caulfield, Colson
wanted him to burglarize the Institution to determine whether, through
Gelb’s former NSC associations, the Institution had a copy of the
papers.
Caulfield remembered his conversation with Colson as follows:
Mr. Colson . . . called me into his office, which was a rather
unusual procedure in and of itself, because I did not work for
Mr. Colson ; indicated he had had discussions with people he
did not identify in the Presidential party out in San Clemente,
and stated that there was a high priority need to obtain papers
from the office of a gentleman named Leslie Gelb, who ap-
parently worked at the Brookings Institute in Washington.
And Mr. Colson indicated that he thought that I could, in
some fashion, obtain those papers. And I stated to Mr. Colson,
how do you propose that I obtain these papers ? . . .
In substance, the suggestion was that the fire regulations
in the District of Columbia could be changed to have the
F.B.I. respond [to a firel and obtain the file in question
from Mr. Leslie Gelb’s office. 28
24 Mar. 3, 1970, Buchanan to President memorandum, 10 Hearings 4114.
25 10 Hearings 4114.
20 10 Hearings 4115.
27 3 Hearings 920. Dean was relating what Caulfield told him about a conversation
with Colson.
28 22 Hearings 10357.
125
To Caulfield, the clear implication was to fire-bomb the Institution. 29
Caulfield left Colson’s office and testified that he “literally ran into the
office of Mr. Dean and advised him that if he was not going to take the
next plane out to San Clemente, I was.” 30 Caulfield told Dean that he
thought Colson’s instructions were “insane.” 31 Dean agreed, and he
flew immediately to California to “. . . tell Ehrlichman this entire
thing was insane.” 32
Dean and Ehrlichman met at San Clemente. According to Dean, 33
Ehrlichman agreed that the plan was unwise and called Colson and
told him to drop the idea. Ehrlichman remembers meeting with Dean
on the subject and calling someone, but he cannot remember whom he
called. 34 Dean then called Caulfield to tell him the plan had been
squelched. 35
Although Caulfield testified that Colson later told Caulfield the idea
was only a joke, 36 Caulfield, Dean, and Ehrlichman thought it was quite
serious. In addition, Lyn Nofziger, then a White House aide who
knew Caulfield well, remembered that, shortly after his meeting with
Colson, Caulfield spoke with Nofziger about the plan and says he ex-
pressed shock that Colson would make such a suggestion. 37 Nofziger
says he told Caulfield not to follow Colson’s directive. 38
Although Colson’s plan was not carried out, Ulasewicz visited the
Institution, at Caulfield’s direction (from Dean) to determine the loca-
tion of offices, security provisions, and so on. 39 This cursory surveil-
lance was done at about the time Dean went to California to see
Ehrlichman.
D. Diem Cable Incident
Another White House investigation involved an effort to tie Presi-
dent Kennedy to the 1963 assassination of South Vietnamese Presi-
dent Ngo Dinh Diem. Colson contended to Hunt that President
Kennedy, a Catholic, had implicitly condoned the assassination of an-
other Catholic head of state, Ngo Diem of Vietnam. Such a theory
had some political consequences if Senator Kennedy decided to run
for President in 1972. Moreover, any Democratic candidate in 1972
might have suffered diminished popularity among the Catholic voters
if such history were accepted.
Early in his employment as a White House consultant, E. Howard
Hunt testified that he was instructed by Charles Colson to become the
White House’s “resident expert on the origins of the Vietnam war.” 40
Hunt proceeded to steep himself in the history of the Vietnam war,
particularly the assassination of Diem. 41 In his capacity as a White
House official, Hunt interviewed some CIA sources, including retired
Col. Lucien Conein, an Indochina expert. David Young obtained ac-
» Ibid.
» Tbid.
81 3 Hearings 920.
32 Ibid.
33 Ibid.
34 6 Hearings 2536.
35 3 Hearings 920.
38 Caulfield interview, Sept. IX, 1973.
37 Nofziger interview, Aug. 29, 1973.
38 Ibid.
38 Ulasewicz interview, May 8, 1973. Ulasewicz says his activity was not thorough
enough to be called a true “casing’' as Dean characterized it in his testimony. 3 Hearings
920.
40 Testimony of Howard Hunt, July 25, 1973, executive session transcript, p. 19.
41 Ibid.
cess for Hunt to State Department secret cables from during the war
to determine if there were any bias in the selectivity of the cables
quoted in the Pentagon Papers. 42
However, Hunt testified that he had a different assignment from
Charles Colson, and that Colson stressed the need to Hunt of finding
documentation to show “that it was not the Nixon administration that
got us involved in Indochina in the first place. 43 Hunt succinctly char-
acterized what Colson wanted to show with the cables as follows :
I believe it was desired by Mr. Colson, or at least some of
his colleagues, to demonstrate that a Catholic U.S. admin-
istration had, in fact, conspired in the assassination of a
Catholic chief of state of another country. 44
Hunt testified that he displayed the secret cables to Colson, ex-
plaining that they laid a strong, but inconclusive, case regarding
Kennedy administration culpability in the Diem death. Hunt noted
that certain cables appeared to be missing from the group he had been
given, and so there was no hard evidence linking the Kennedy admin-
istration with the assassinations of Diem and his brother-in-law. 45
Hunt characterized the ensuing conversation with Colson as follows :
Well, he [Colson] said, “Do you think you could improve
on that,” and I [Hunt] said, “Yes.” I said, “I would need some
technical assistance. I can’t do ia forgery on my own that will
stand up.” He said : “What would you need?” I said, “Possi-
bly the Secret Service could help me. I would need type
faces and that sort of thing.” I said, “I could prepare a cred-
ible text of plausible text or set of texts myself, but then we
would run up against the typewriter problem.” He said, “Well
this is too sensitive ; we couldn’t approach the Secret Service
for that. You would have to do this all on your own. Why don’t
you see what you can do.” So as I have stated in other forums,
I set about with a razor blade and a paste pot and in effect
produced two spurious cables. 46
Hunt testified he later returned to Colson’s office with the spurious
cables, where Colson told him that the cables would be made available
to a journalist. 47
In September 1971, Colson contacted Life magazine investigative
reporter William Lambert and mentioned to him the possible existence
of the Diem cables. 48 Hunt met with Lambert in late September and
showed him the forged cables but, at Colson’s instructions, refused
to allow Lambert to keep or photocopy them. For some time after
this meeting, Lambert says he pressed Colson and Hunt for the orig-
inal documents and interviewed numerous people in an attempt to
confirm their authenticity. Finally, on April 28, 1973, Charles Morin,
one of Colson’s law partners, returned one of Lambert’s calls. Lambert
says that Morin told him the cable was a fake. Despite Morin’s asser-
48 See David Young Interview, July 23, 1973. See also 9 Hearings 3772.
43 Hunt executive session transcript, July 25, 1973, pp. 20—21.
44 9 Hearings 3672.
45 ma.
48 Hunt executive session, Sept. 10, 1973, p. 106.
47 9 Hearings 3672.
48 Interview with William Lambert, Aug. 7, 1973.
127
tion, when Lambert met with Colson and his attorney the next day,
Lambert said Colson denied ever seeing the forged cables and refused
to confirm that some of them were forged. 49
In addition to contacting Lambert, Hunt says that Colson also in-
structed him to show the entire set of cables, including the forgery,
to Col. Lucien Conein. 50 Conein at the time was preparing to partic-
ipate in a television documentary on the origins of the. Vietnam conflict,
and it was “Colson’s desire for Mr. Conein to draw the conclusion that,
in fact, the Kennedy administration had been responsible, implicitly
responsible for the assassination of Diem.” 61 Colson and Conein talked
earlier on the telephone, with Hunt participating,
. . . about the fact that President Kennedy, himself a Cath-
olic, had in fact — his administration and he implicitly had
authorized the assassination of another Catholic and thus
would have some impact on the Catholic vote in the subse-
quent election, if there should be a Kennedy involved in the
election. 52
Even if Edward Kennedy were not the Democratic candidate, Hunt
said, “the fabrication was intended to alienate the Catholic vote.” 63
E. ITT and Dita Beard
Columnist Jack Anderson reported on February 29, 1972, the exist-
ence of the now-famous Dita Beard ITT memorandum, alleging that
a $400,000 contribution to the Nixon campaign was tied to a favorable
ruling by the Justice Department on ITT’s antitrust problems. Con-
cern about the document within the White House led to a number
of activities, including clandestine investigations.
Immediate administration reaction to the Anderson article was
twofold: (1) A White House action group of political and press ad-
visers was assigned to set out the administration’s public position and
course of conduct in reaction to the allegations and (2) investigations
were undertaken to determine the origin, accuracy, and authenticity
of the Beard memorandum.
The White House public relations explanation of the ITT incident
was extensive and will not be fully covered in this report. Nearly
daily strategy meetings were held which included Bichard Moore,
Charles Colson, John Dean, Bill Timmons, John Ehrlichman, Fred
Fielding, and Wally Johnson. This group’s responsibilities included
preparing daily press briefing materials and developing a strategy for
the upcoming Kleindienst confirmation hearings.
The White House investigation of the ITT affair was two pronged.
Charles Colson conducted a review of internal White House contacts,
correspondence, and memorandums to determine possible culpability
of various persons in any possible wrongdoing surrounding adminis-
tration — ITT interaction. This investigation led to the celebrated Col-
son ITT memorandum to H. K. Haldeman. 54 Second, Howard Hunt
and personnel from some Government agencies were used to investi-
gate individuals related to the actual publication of the memo.
« Ibid.
60 Hunt executive session, Sept. 10, 1973, p. 149.
61 Ibid.
62 Id. at p. 150.
53 9 Hearings 3733.
64 8 Hearings 3372.
128
The Colson ITT memorandum is divided into two parts. The first
section discusses briefly the on-going public relations effort to minimize
the political impact of the Beard memorandum. The second portion
of Colson’s memorandum details the administration involvement in
the ITT anti-trust settlement and the possible relation of the settle-
ment to a campaign contribution promise . 55 This second portion out-
lines the findings of Colson’s internal investigation into White House
misconduct in the ITT matter.
Colson’s findings were significant. The documents discovered in his
investigation, Colson concluded, could “undermine” or “contradict ” 56
previous testimony of administration officials. Colson determined that
one document “. . . would once again contradict Mitchell’s testimony
and more importantly directly involve the President .” 57
The first sentence of the investigative portion of Colson’s memoran-
dum implied that an attempt to suppress White House involvement
had been underway for some time :
Certain ITT'files which were not shredded have been turned
over the SEC ; there was talk yesterday in the committee of
subpenaing these from ITT . 58
Further, Colson acknowledged the existence of an important docu-
ment relevant to the SEC investigation but concluded : “We believe
that all copies of this have been destroyed .” 59 Colson’s memorandum
also summarized the extent of knowledge various administration
figures had about ITT :
Neither Kleindienst, Mitchell, nor Mardian know of the
potential dangers. I have deliberately not told Kleindienst or
Mitchell since both may be recalled as witnesses and Mardian
does not understand the problem. Only Fred Fielding, myself,
and Ehrlichman have fully examined all the documents and/
or information that could yet come out . 60
Rather than disclose to law enforcement authorities or other con-
cerned agencies what Colson’s investigation had uncovered, the White
House conducted further investigations of non-White House figures
involved in the ITT matter. Robert Mardian testified that G. Gordon
Liddy told him he transported ITT lobbyist Beard away from Wash-
ington, D.C., after the infamous memo was published . 61 Subsequently,
Colson dispatched E. Howard Hunt to Denver, Colo., where Mrs.
Beard was in a hospital, to interview her about the origin and
authenticity of her memorandum . 62 White House congressional liaison,
Wallace Johnson, helped Colson and Hunt on the Dita Beard project,
as Hunt explained :
I was referred by him [Colson] to Mr. Wallace Johnson,
who was the gentleman who actually dispatched me on the
tsma.
88 8 Hearings p. 3376.
n Ibid.
58 8 Hearings 3375.
® Ibid.
80 8 Hearings 3374.
81 6 Hearings 2359. (Liddy told Mardian about getting Mrs. Beard out of Washington
shortly after the Watergate break-in). Hunt asserted in a staff interview that from his
conversations with Dita Beard, he concluded that Liddy did not transport her out of town.
82 9 Hearings 3752-53.
129
mission and prepared the aide memoir from which I talked
subsequently to Mrs. Beard. 63
Money was then provided for the trip from campaign funds held by
G. Gordon Liddy. 64 Following Hunt’s interview with her, Mrs. Beard
issued a statement claiming that the famous memo was a fraud. This
statement was written by Bob Bennett, Hunt’s employer at Mullen
& Co. 65
Some Government agencies were also used in the White House
investigation. For instance, Acting FBI Director Patrick Gray trans-
mitted a copy of the Beard memorandum to White House counsel
John Dean. 66 The memorandum, obtained in the FBI investigation,
was subsequently used by Hunt in his interview of Beard. 67
The White House was also curious about the relationship between
Mrs. Beard and a secretary for columnist Jack Anderson. 68 John
Martin of the Internal Security Division (ISD) of the Department
of Justice said that he interviewed various people on this subject at
the request of Robert Mardian, former head of ISD, and Charles
Colson. 69
F. The Plan for an Investigation of Arthur Bremer
On May 15, 1972, Alabama Gov. George C. Wallace, then a
contender for the Presidency, was shot and seriously injured during
a campaign speech in Maryland. E. Howard Hunt testified that
Charles Colson called him into his office the morning following the
assassination attempt, and told Hunt that Wallace’s assailant had
been identified as Arthur Bremer of Milwaukee, Wis. 70
Colson said that the press “had trampled through his (Bremer’s)
apartment,” 71 and suggested that Hunt should go through the apart-
ment to survey the contents. Colson explained to Hunt the purpose of
the assignment as follows :
In the past, when Mr. Kennedy was assassinated, when
Jack Ruby was killed, and when Martin Luther King was
killed, it was all immediately blazoned as a right wing plot
of some sort. We would like to know what kind of kook this
guy is. What has he got up there in the way of literature? Is
he a neo-Nazi ? 72
Hunt concluded : . . I think that the thrust of that effort was to
determine his political orientation or some motivation for what he
did.” 73
When initially confronted with the assignment, Hunt says he
strenuously protested and explained that the apartment was probably
staked out or legally sealed by this time. 74 Hunt testified that Colson
63 9 Hearings 3753.
64 Hunt executive session transcript, July 26, 1973, p. 150.
66 Bennett Interview, July 27, 1973.
66 Patrick Gray interview. May 10, 1973, p. 7.
87 Hunt executive session transcript, July 25, 1973, p. 59.
08 Interview of John Martin, May 11, 1973.
00 Ibid.
70 Testimony of E. Howard Hunt, executive session transcript, July 25, 1973, p. 129.
71 Ibid.
73 Id. at p. 130.
73 Id. at p. 133.
74 Id. at p. 130.
33-687 O - 74 - 11
130
then implied that a break-in could elude the stakeout and provide
revealing information. 76
Finally, according to Hunt, Colson canceled the entire operation.
G. Misuse and Attempted Misuse of Government Agencies by the
White House, 1969 Through 1972
1. introduction
In this section, the committee will outline just a few of the attempts
by White House personnel to use Government agencies for their own
political ends. Elsewhere in this report will 'be a fuller examination of
the use of the incumbency to aid in the reelection of the President. 76
The results of these White House attempts to misuse agencies are
not always clear. In most cases, the committee did not have either the
time or the resources to investigate fully the results of these attempts
to abuse governmental process. However, the committee presents these
examples because they are illustrative of the attitudes and approaches
to Government which prevailed in the time leading up to the cam-
paign of 1972, and which created the environment m which the
events now known as “Watergate” occurred.
2. internal revenue service
A preferred target of the White House staff, in its attempts to politi-
cize independent agencies, was the Internal Revenue Service. The
political enemies project, White House efforts to have the IRS focus
on leftwing organizations, White House attempts to get IRS informa-
tion for political purposes, and the White House concern with tax
exemptions given to liberal foundations, all attest to the serious efforts
made by the White House to use an independent Government agency
for political purposes.
a. Political Enemies Project
At the same time that early organizational efforts began for the
Committee To Re-Elect the President, staff people in the White House
were busy organizing the political enemies project. 77 Dean testified
that on August 16, 1971, at the request of H. R. Haldeman and John
Ehrlichman, he prepared a memorandum entitled “Dealing With Our
Political Enemies.” Dean is quite succinct in summarizing the purpose
of his memo :
This memorandum addresses the matter of how we can
maximize the fact of our incumbency in dealing with persons
known to be active in their opposition to our administration.
Stated a bit more bluntly — how we can use the available Fed-
eral machinery to screw our political enemies. 78
Dean goes on to say that he has reviewed the question of how “to
screw our political enemies” with a number of persons “possessed of
75 Id . at p. 131.
n See chapter 3 on Responsiveness.
~ 4 Hearings 1682-1753.
78 4 Hearings 1689.
131
expertise in the field,” and he concludes that the requirements for the
project are to have an individual in the White House with full access
and support of the top officials of various independent agencies and
departments in order to effectively deal with individuals who are giv-
ing the White House a hard time. 79
Dean recommends that Lyn Nofziger be the project coordinator,
since “he appears the most knowledgeable and most interested.” 80 Dean
then goes on to recommend that the White House staff develop a small
list of names that could be singled out as targets for action by various
departments or agencies of the Government. The potential of such an
operation is clearly recognized by Dean, who advised, “We can learn
more about how to operate such an activity if we start small and
build.” 81
In response to Dean’s memorandum, Charles Colson forwarded to
Dean a list of 20 enemies that had been prepared on June 24, 1971, by
George Bell. In response to Dean’s suggestion that the White House
focus on only 10 names to try out their techniques, Colson checked off
11 priority targets that he “would give top priority.” 82
Lyn Nofziger, formerly a White House staff aide, denied any in-
volvement in the enemies project with John Dean or anyone else. 83
However, Jack Caulfield’s memorandum to John Dean of Au-
gust 12, 1971, explicitly stated that Caulfield had asked Nofziger to
come up with a candidate to assist in the enemies project. 84
Nofziger stated that he was aware that Joanne Gordon was working
on an enemies list in the White House while doing political research
for Charles Colson. Nofziger said he saw no need for a formal
“enemies list” because anyone with political savvy would be able
to name Richard Nixon’s opponents with no trouble. 85
Nofziger also felt that it was fully appropriate for the administra-
tion to ask Government agencies to review carefully the projects of
individuals who were unfriendly to the administration. 86
Scores of lists were prepared in the White House from the spring
through the late fall of 1971 of “enemies” and “opponents” of the
administration. 87 Most of these lists were prepared by Charles Col-
son’s office, particularly by Joanne Gordon and George Bell. They were
sent to Dean’s office, since Dean had “the action on the political
enemies project.” 88
Dean testified that he did very little to carry out any attacks on the
so-called enemies. He testified that the compiling of a list was merely
“an exercise that I had no intention to implement”. 89 Dean said he
was unaware if any of the specified individuals on the list were sub-
jected to any harm or injury, since he said the lists were “principally
used by Mr. Colson and Mr. Haldeman.” 90 In a September 14, 1971,
memorandum to Larry Higby, Dean notes that he will “await the
review” of the names on his attached list before taking any action. 91
w md.
“ Id. at p. 1690.
a IMd.
82 4 Hearings 1 692.
83 Interview with Nofziger, Aug, 29, 1973, p. 3.
84 Id. at p. 8.
85 4 Hearings 1688.
88 Nofziger interview, Aug. 29. 1973, p. 11 ; see, for example, 4 Hearings 1702 for mate-
rial relating to Chet Huntley’s Big Sky project in Montana.
87 4 Hearings 1682-1754.
88 4 Hearings 1701.
89 4 Hearings 1529.
*>H)id.
01 4 Hearings 1697.
132
Charles Colson has stated publicly that these lists were compiled
to insure that no opponents of the administration would be included
on the invitation lists of the White House.
H. R. Haldeman testified that the enemies list was compiled so that
it could serve as an exclusion list for extending White House privi-
leges. 92 Haldeman explained that these lists were compiled since they
were “a part of carrying out the effort of the White House * * * to
carry out the policies of the administration rather than to provide a
forum for the expression of opposition.” 93
However, a quick glance at the memorandum headed “Opponent
Priority Activity” 94 shows that the individuals targeted for action
were destined to lose far more than their invitations to the White
House. For example, under the name of Maxwell Dane is the com-
ment “they should be hit hard starting with Dane.” 95 And under the
name of Mort Halperin, a former Kissinger aide whose telephone had
been tapped by the administration, the memo says that “a scandal
would be most helpful here” in a reference to Common Cause where
Halperin worked. 96 In light of the comments appended to the indi-
vidual names on the “enemies list,” it is dubious that Haldeman’s
characterization of “mere exclusion from White House privileges”
was what he had in mind when it came to dealing with “enemies.”
b. The Enemies List and the Internal Revenue Service
At the same time that the political enemies project began in the
summer of 1971, John Dean testified he was asked to use the Internal
Revenue Service on an increasingly frequent basis to get political
information for the White House or to initiate audits on opponents
of the administration. Dean testified that he had little success in his
efforts with Commissioner Johnnie Walters. 97 The objective of a brief-
ing paper Dean prepared for Haldeman was “to make IRS politically
responsive.” 98 Dean cataloged the White House woes with IRS as
follows :
We have been unable to crack down on the multitude of
tax-exempt foundations that feed leftwing political causes.
We have been unable to obtain information in the posses-
sion of IRS regarding our political enemies.
We have been unable to stimulate audits of persons who
should be audited.
We have been unsuccessful in placing RN supporters in
the IRS bureaucracy. 99
As part of the means for making the Internal Revenue Service
politically responsive, Dean suggested that “Walters should be told
that discreet political action and investigations are a firm requirement
and responsibility on his part.” 1
In the White House reconstructed version of John Dean’s meeting
with President Nixon on September 15, 1972, as relayed by Fred Buz-
m 8 Hearings 3156, 3214.
03 8 Hearings 3156.
94 4 Hearings 1694.
05 Ibid.
96 4 Hearings 1695. It should be noted that Berl Bernhard, Muskle campaign manager,
testified that Halperin was still under electronic surveillance by the Administration after
he began working on the Muskie foreign policy task force (11 Hearings 4665).
07 4 Hearings 1682.
08 Ibid.
99 Ibid.
1 Ibid.
133
hardt to Fred Thompson, the memorandum states that “Dean reported
on IRS investigation of Larry O’Brien.” 2 Dean testified that at the
meeting that day with the President and Bob Haldeman, the President
discussed “the use of the Internal Revenue Service to attack our
enemies.” 3
Dean also testified that the President wanted to place individuals
in the independent agencies “who would be responsive to the White
House requirements.” 4
In the House Judiciary Committee transcript of the September 15,
1912, meeting, Haldeman reported to President Nixon that John Dean
was working on “the list” “through IRS.” 5
On September 11, 1972, 4 days prior to his meeting with President
Nixon, Dean met with IRS Commissioner Johnnie Walters at Dean’s
office in the Executive Office Building. At this meeting, Dean turned
over to Walters a list of 490 individuals, many of whom were McGovern
campaign workers, and informed Walters that John Ehrlichman had
asked IRS to determine what type of information could be developed
concerning those individuals. 6 At this time, according to Walters, Dean
was hopeful that the Internal Revenue Service could acquire the
information that was requested without creating any political
problems.
Walters subsequently discussed the matter with Secretary Shultz
who directed Walters to “do nothing.” 7 Walters has testified that he
did nothing after the meeting.
After Dean’s meeting with the President, on September 15, 1972,
Dean again called Commissioner Walters on September 25. On this
occasion. Dean wanted to know what progress had been made in check-
ing the list that had been provided, and Walters advised Dean against
any checking, but agreed to reconsider the matter again with Secretary
Shultz. The matter was never taken up again, and the list which was
given to Commissioner Walters was sealed and locked in his safe in the
Commissioners’ office. 8
Despite the reluctance of Commissioner Walters to involve the In-
ternal Revenue Service in carrying out the political demands of the
White House, tax information and income tax audits were still re-
quested by the White House staff and supplied by other IRS personnel.
Many of these requests came in the summer and fall of 1971, during the
same period of time that the political enemies project was being started,
the Sandwedge proposal being considered, and the 1972 campaign
being organized.
c. Tax Information and Audits Requested of the Internal Revenue
Service
In the study of the enemies list by the Joint Committee on Internal
Revenue Taxation, the staff report concluded that “in none of these
cases has the staff found any evidence that the taxpayer was unfairly
2 4 Bearings 1796. See also White House transcript of September 15, 1972, meeting.
3 3 Hearings 958.
4 Ibid.
B See Washington Post. May 17. 1974. p. A26, It should be noted that the section of the
discussion between the President and Dean about the O’Brien audit by IRS has been deleted
from the September 15, 1972 tape turned over to the Special Prosecutor and the House
Judiciary Committee.
a See Report of the Joint Committee on Internal Revenue Taxation, December 20, 1973,
p. 3.
7 Id. at p. 4.
8 Ibid.
134
treated by the Internal Revenue Service because of political views or
activities.” 9 However, the investigation of the Senate Select Commit-
tee has disclosed a number of instances where information from the
Internal Revenue Service was inappropriately provided to the White
House. Dean testified that Jack Caulfield had a contact inside the
Internal Revenue Service, and that it was through this contact that
they were able to obtain confidential information and learn how to
initial audits whenever they wanted to do so. 10 Caulfield has testified
that his main contact inside the Internal Revenue Service was Vernon
“Mike” Acree, formerly Assistant Commissioner for Inspection. 11
However, Acree stated that he sent Caulfield no copies of any tax
returns, never discussed initiating any specific audits other than in a
general sense, and that the only information that was provided to
J ack Caulfield was on “type X checks” — an inquiry to see whether or
not an individual who was being considered for appointment by the
executive branch had tax problems. 12
These conflicting stories will be discussed in more detail in the con-
text of specific cases further on in this report.
One of the means by which the White House kept abreast of IRS
activity was through the sensitive case reports prepared by the IRS
according to long-established procedure. 18
(I) Sensitive case reports
The IRS maintained a list of individuals who would be considered
sensitive cases — Senators, Congress people, entertainers, associates of
the President, and certain citizens in high income tax brackets. Sensi-
tive case reports are filed from the field office each month on investiga-
tions concerning these individuals, and are then routed to the appro-
priate IRS division. The heads of each division select the more signifi-
cant sensitive case reports to send on to the Assistant Commissioner of
Compliance. His staff subsequently reviews these files and prepares a
“cull” section which are those cases which are worthy of note by the
Commissioner of the IRS — usually between 20 and 25 such cases.
Subsequently, the Commissioner of the IRS and/or one of his assist-
ants met with the Secretary of the Treasury to determine whether any
of the sensitive case reports were significant enough to bring to the
attention of the President. For example, cases involving the Presidents
personal friends or large contributors were usually important to bring
to the President’s attention in order to avoid any embarrassment for
the President and the executive branch.
When Roger Barth was assistant to the Commissioner of the IRS,
he would call John Ehrlichman directly (and sometimes John Dean),
and the Secretary of the Treasury would contact the President directly
to bring these sensitive cases to the White House’s attention. Barth
stated that an average of one sensitive case report per month was for-
warded on. 14 Former IRS Commissioner Johnnie Walters testified that
he was unaware of Barth showing or sending sensitive case reports
to John Ehrlichman and that it would have been “out of the routine”
at IRS. 15
9 See Joint Committee on Internal Revenue Taxation Report, Dec. 20, 1973, p. 12.
4 Hearings 1535. „ , , „ ' „
u s ee Caulfield interview. Sept. 11-12. See Caulfield executive session, Saturday, Mar. 23,
« Acree interview. Sept. 27, 1973. See also Acree letter. June 27, 1974. ^
» This background is also relevant to the Hughes-Rebozo report section on the IRS inves-
tigation of Rebozo.
14 See Roger Barth interview, July 30, 1973, pp. 7—8.
16 24 Hearings 11628.
135
This sensitive case reporting procedure was important in the case
of Mr. Charles G. Rebozo, and the IRS investigation into Mr. Rebozo
commencing in 1972 and 1973. This matter will be discussed more fully
in another chapter of this report. However, there were other channels
by which the White House requested information or tax audits from
IRS.
(2) Requests for audits
Newsday reporters . — In the fall of 1971, Newsday completed a long
investigation into the affairs of Charles “Bebe” Rebozo that was to be
published in early October 1971. The prospective publication of an
unfavorable article about the President’s best friend caused ripples of
apprehension throughout the White House. For example, on Septem-
ber 10, 1971, Caulfield wrote to John Dean a very detailed memo
concerning his inquiry into the background and circumstances of
the Newsday article. Caulfield noted that “A discreet look at the news-
paper’s publication calendar has been accomplished.” 16 In the same
memorandum Caulfield notes that “Robert Greene, leader of the in-
vestigative group, has been in both Washington and Florida within
the past 2 weeks.” 17 This information was provided to Caulfield by
an FBI agent and is discussed in more detail in another section.
Dean testified that after the article about Rebozo was published,
he received instructions from either Haldeman or Ehrlichman that
Robert W. Greene, head of the investigative team for the article,
should be audited by the IRS. 18
Caulfield testified that Dean asked him to “see how an audit might
be done on Mr. Greene, how it might be done in a way that might not
be illegal.” 19
In response to Dean’s request, Caulfield called Mike Acree at the
Internal Revenue Service to determine how audits were initiated on
individuals. Acree explained to Caulfield that they were often started
from anonymous “informants’ ” letters which were received by the
IRS. Acree recalled that the conversation only involved a general
discussion of the audit process, without specific names being
mentioned. 20
The results of Caulfield’s discussion with Acree are contained in a
memorandum from Caulfield to Dean. 21 The memo states that a “knowl-
edgeable source at IRS” was contacted by Caulfield, and that the
source suggested that “a priority target be established within the
group with preference given to one residing in the New York area.” 22
Dean then asked him to initiate the audit on Robert Greene. Caulfield
said he spoke to Acree to ask him to send an anonymous letter to the
Internal Revenue Service about Greene. Caulfield believes that the
letter was, in fact, sent on Acree’s direction. 23 Acree denied that he
knew of any request for a specific audit on Robert Greene and also
denied that any anonymous letters were sent at his direction. 24
However, in light of Caulfield’s suggestion to Dean that a “priority
target be established within the group with reference given to one
16 See 21 Hearings 9793.
17 Ibid .
18 3 Hearings 1072.
19 22 Hearings 10373.
” Acree Interview July 31, 1973, p. 3 ; see also Acree letter, June 27, 1973.
21 4 Hearings 1685.
22 Ibid.
23 See Caulfield Interview, Sept. 11, 1973, p. 11.
“Acree Interview, July 31. 1973.
136
residing in the New York area,” and in light of the fact that Robert
Greene resides in New York State and had his return audited by New
York State under the Federal/State exchange program, the question
arises as to whether the audit, in fact, resulted from Caulfield’s ef-
forts. 23
On another occasion, Dean asked Caulfield to initiate audits on three
or four individuals. Caulfield says he brought Acree over to the White
House to discuss the matter with Dean and Caulfield. Caulfield stated
that Acree was quite reluctant to get involved in these audits, and
that he remained evasive when specifically asked to do these projects.
Caulfield testified that the matter apparently died shortly thereafter
because of Acree’s lack of interest. 26
Harold Gibbons. — On June 12, 1972, Charles Colson wrote a mem-
orandum to John Dean requesting that Dean initiate an income tax
audit on Harold G. Gibbons, a vice president of the Teamsters Union
in St. Louis. 27 Colson’s motivation for wishing to start the audit is
rather clear :
Gibbons, you should know, is an all-out enemy and Mc-
Governite, ardently anti-Nixon. He is one of three labor
leaders who were recently invited to Hanoi. 28
Dean testified that he ignored this request from Colson, and that
nothing was ever done to initiate such an audit.
Emile De Antonio , Daniel Talbot, and New Yorker Films. — Caul-
field felt sufficiently confident of the White House’s ability to initiate
income tax audits that on at least one occasion he recommended to
John Dean that a “discreet IRS audit” be done. Following the re-
lease of the film, “Millhouse,” a number of individuals within the
White House became quite concerned about the political impact of
this film showing reruns of old Nixon speeches. As a result, in the
summer and early fall of 1971, Caulfield directed Anthony T. Ulase-
wicz to view the film and to make discreet inquiries of New Yorker
Films, Inc., Daniel Talbot, the film distributor, and Emile DeAn-
tonio, the producer of the film.
Finally, on October 15, 1971, Caulfield felt that the success of the
film posed such a serious threat to the White House that he suggested
to John Dean that they initiate “discreet IRS audits of New Yorker
Films, Inc., DeAntonio, and Talbot.” 29 Caulfield stated that if his rec-
ommendation to John Dean was agreeable, he was going to approach
Mike Acree about initiating the audits. Dean, however, did not agree
with Caulfield’s recommendations, and Caulfield said no further ac-
tion was taken at that time. 30
Dean forwarded Caulfield’s suggestions to his assistant, Fred F.
Fielding, and Fielding reacted quite negatively to the idea of initiat-
ing a discreet IRS audit or leaking derogatory information about the
film producers. Nothing in Fielding’s memorandum indicated that his
25 The committee has not had access to sufficient records nor interviewed enough witnesses
on this matter to reach a definite conclusion.
28 See Caulfield interview, Sent. 11. 1973, pp. 11-12; and Acree interview, July 31, 1973.
Acree recalled a meeting with Dean, but had no recollection of Dean asking him to “under-
take any tax audits on anyone.” Acree also recalled a phone call from Caulfield in which
Caulfield “inquired again as to the Internal Revenue practices involving the initiation of
audits,” but that nothing further came of the conversation. (Acree letter, June 27, 1974,
pp. 17-18.)
27 4 Hearings 1686.
28 Ibid.
29 21 Hearings 9829.
30 22 Hearings 10383.
137
reaction was because such tactics would be ethically improper, but
rather because “doing IRS audits just doesn’t seem to be a solution
that will help us.” 31
Larry O'Brien . — There is evidence before the Select Committee that
an audit of Larry O’Brien was encouraged by White House officials
in the summer of 1972, and that O’Brien’s tax returns were specially
inspected by IRS personnel at the direction of John Ehrlichman. 32
However, this activity is more fully described in a later section of this
report. 33
Other Requests . — John Dean testified that he was asked by several
people in the White House, and particularly Rose Mary Woods, if he
could “do something” about an IRS audit on Dr. Kenneth Riland,
President Nixon’s osteopath. 34 Dean testified that he requested that
the relevant officials at Justice and IRS keep him informed on the
matter after he learned of the serious allegations, but that nothing
further was done. 35
Dean also testified that he was asked to “do something” about the
audits of Rev. Billy Graham and actor John Wayne :
* * * I was told that I was to do something about these
audits that were being performed on two friends of the Pre-
sident. They felt they were being harassed and the like
* * * finally, when I got around to checking on it, Mr. Caul-
field sent me some information, which I think is evidenced
in the exhibit, and a note went to Mr. Higby. Mr. Higby sent
it in to Mr. Haldeman, and Mr. Haldeman wrote a note on the
bottom, “This has already been taken care of,” so obviously,
things were happening that I had no idea on. 36 37
Roger Barth testified that he knew of no request from Reverend
Graham for help from the IRS, but that Barth had brought to the
attention of the Secretary of the Treasury and possibly Jack Caulfield
a discrepancy in the sensitive case reports concerning how an audit
on Graham was initiated. 38
Documentary evidence received by the Select Committee shows that
Jack Caulfield received typed reports from the IRS indicating that
neither John Wayne nor Reverend Graham was being harassed. 39 In
addition, Barth testified that he was not aware of any action taken
to impede the audit on Reverend Graham 40 and there is presently no
evidence before the committee showing any action taken to impede
any investigation of Mr. Wayne.
(<?) Requests for taxpayer information from the IRS
Individuals working in the White House requested taxpayer in-
formation as well as actual returns from the IRS.
Early in the administration, Clark Mollenhoff, then a staff assist-
ant at the White House, asked IRS if he could examine nine individual
31 21 Hearings 9829.
82 See 23 Hearings 11222-24.
^ See section on Hughes-Rebozo, Chapter 8.
iHewinffs 1530 ; Dr. Riland was subsequently acquitted of tax fraud by a Federal jury.
35 laid.
80 Dean subsequently stated that he was to “turn off” the audits of Reverend Graham
and John Wayne (interview, July 29, 1973, p. 19).
37 4 Hearings 1530 ; see also 21 Hearings 9808.
38 23 Hearings 11270-71.
39 21 Hearings 9808.
40 23 Hearings 11272.
138
tax returns. Roger Barth testified that Mollenhoff was given access
to these returns only after Commissioner Randolph Thrower received
written requests on behalf of the President. 41
After Mollenhoff left the White House, Barth noted that only in-
dividuals who worked directly for the President such as Ehrlichman,
Haldeman, and Dean would have access to tax returns and audit in-
formation, Barth added that other individuals on their staffs, includ-
ing J ack Caulfield, also had access to the tax information. 42
Among the requests made by Caulfield for specific taxpayer in-
formation from the IRS were the following :
1. In the fall of 1971 Larry Goldberg was being considered to head
up the Jewish Citizen’s for the Re-election of the President. Caul-
field did a background investigation of Goldberg, to determine his
loyalty to the reelection campaign and his involvement in Jewish
organizations. Among the information obtained by Caulfield in the
course of his investigation were actual copies of pages from Gold-
berg’s tax returns from 1968, 1969, and 1970.
Caulfield testified that he obtained this information from Mike
Acree, but Acree had no recollection of providing any specific infor-
mation on Goldberg. 43 Roger Barth testified that he had no specific
recollection of sending that information to Caulfield, but that he
“may have sent that over.” 44
2. In late September 1971, an individual wished to donate a wine
storage vault to the Western White House. John Dean asked Caulfield
to check out the individual. On October 15, 1971, Caulfield wrote a
memo to Dean which reflected that Caulfield had obtained access to
the individual’s income tax returns. 45 Because of the information con-
tained therein, Dean noted that Kalmbach would call the individual
and “tell him we are not interested” on October 19, 1971. 46
Caulfield testified that the tax information was given to him by
Mike Acree, and that Acree had obtained the information from a
“pretext interview” conducted by an IRS agent. 47 Acree recalled
being asked about the individual by Caulfield but has no recollection
of conducting, authorizing, or knowing of any “pretext interviews”
of the individual. 48
3. Caulfield requested and received specific taxpayer information on
five individuals who were seeking to involve the White House in a
scheme that claimed the discovery of the fabled “Lost Dutchman”
gold mine in the southwest. Caulfield, at the request of Peter Flani-
gan, investigated these five individuals and he was given access to
their Internal Revenue Service tax returns. Caulfield testified that he
obtained this tax information from Mike Acree, 49 but Acree denied
that he furnished Caulfield any inappropriate information and did not
recall any request such as that described by Caulfield. 60
4. In October 1971, Caulfield was asked to do an investigation of
Stuart L. Udall, former Secretary of the Interior, and the Overview
41 23 Hearings 11228. See also the IRS opinion granting access to tax returns to White
Ho «se staff actin £ at the direction of the President at exhibit 8, p. 252.
42 Iota.
2 51 Hearinffs 9796 ; see also Acree interview, Sept. 27, 1973.
44 23 Hearings 11262.
45 21 Hearings 9847.
40 Ibid.
47 22 Hearings 10394.
48 See Acree letter. June 27, 1974, p. 20.
49 21 Hearings 9711.
80 See Acree letter, June 27, 1974.
139
Corp., of which Mr. Udall was chairman of the board. In a memoran-
dum of October 8, 1971, Caulfield informed Dean that he “asked for
an IRS check to support this material.” 51 Caulfield testified that he
meant by that comment that he could sit down and speak with Mike
Acree about any tax problem that Overview Corp. or Stuart Udall
may have had. 52
Dean asked Caulfield to find out if Overview had any Federal con-
tracts, and so Caulfield checked with five separate Federal agencies,
including IRS, only to discover no record of any Federal contracts
for any of them. The testimony of Caulfield suggests that the motiva-
tion behind discovering whether or not there were any Federal con-
tracts given to Overview Corp. was a desire of the White House to
cancel these contracts if any existed. 53
In his Sandwedge proposal, Caulfield described Mike Acree as “a
strong Nixon loyalist [who] has proved it to me personally on a num-
ber of occasions.” 54 Acree’s potential assignment in the Sandwedge
operation was to provide “IRS information input, financial investiga-
tions,” and other Federal law enforcement liaison information. 55 There-
fore, according to Caulfield, many of these requests for IRS informa-
tion in the fall of 1971 were in part an effort by Caulfield to demon-
strate the potential effectiveness of his organization. While some re-
quests for IRS information were apparently legitimate, the ready
access to such highly confidential information should be more effec-
tively curbed in the future.
{If) Special Service Staff
On June 18, 1969, the Permanent Subcommittee on Investigations
of the Senate Committee on Government Operations heard testimony
from its staff and from a former member of the Black Panther Party
to the effect that the Black Panthers had never filed income tax returns
and had never been audited by the Internal Revenue Service. 56 In re-
sponse to some of the testimony, Senator Karl Mundt commented that
it seemed that the Black Panthers “get pretty special treatment.” 57
There was also testimony in these hearings from Leon Greene, IRS
Deputy Assistant Commissioner of Compliance, who testified about
the tax exempt status of certain politically active groups and raised
the question of whether or not they should be tax exempt. 58
Following these hearings in the summer of 1969, on about July 1,
1969, Tom Charles Huston, Assistant to the President, telephoned
Roger Barth and requested that the Internal Revenue Service begin
reviewing the activities of certain activist organizations. 59 IRS also
received a list of organizations from the Permanent Subcommittee on
Investigations that the committee felt the IRS should investigate.
Huston noted in a later memo to H. R. Haldeman that the President
had “indicated a desire for IRS to move against leftist organizations
taking advantage of tax shelters” in early 1969. 00
61 21 Hearings 9821.
62 22 Hearings 10394.
ibid.
54 See exhibit 7, p. 240.
65 Ibid.
50 See hearings of Permanent Subcommittee on Investigations of the Senate Committee
on Government Operations, Riots, Civil, and Criminal Disorders, 92d Cong., 1st sess., p.
373 et seq.
57 Id. at p. 373.
58 See Barth interview, p. 11.
m Id. at p. 11. See also 3 Hearings 1339 ; memo dated Aug. 14, 1970.
00 3 Hearings 1338.
140
As a result of these various pressures, the IRS established the
Activist Organizations Committee on July 18, 1969, whose prin-
cipal function was to assemble data and monitor the activities of cer-
tain organizations with reference to their compliance with IRS laws.
The committee was established on a very secretive basis. In a memo-
randum of July 24, 1969, that discussed the first meeting of the com-
mittee, it was noted :
We do not want the news media to be alerted to what we are
attempting to do or how we are operating because the disclo-
sure of such information might embarrass the administration
or adversely affect the service operations in this area or those
of other Federal agencies or congressional committees. 61
The memorandum also noted that initially, “a type of organization
in which we are interested may be ideological, militant, subversive,
radical, or other, and one of our first problems will be to define and to
determine what kind of organization we are interested in.” 62
In 1970, the IRS altered the name of the group to the Special
Service Group, and subsequently the name of the organization was
again changed to the Special Service Staff. 63
On August 14, 1970, Tom Charles Huston requested a progress
report on the project from the Commissioner of the Internal Revenue
Service, which he received more than a month later. In that report,
Commissioner Thrower explained the history and purpose of the
group as follows :
. . . The function of the Special Service Group is to obtain,
consolidate and disseminate any information on individuals
or organizations (including major financial sponsors of the
individuals or organizations) that would have tax implica-
tions under the Internal Revenue laws. ...
The sole objective of the Special Service Group is to
provide a greater degree of assurance of maximum com-
pliance with the Internal Revenue laws by those involved in
extremist activities and those providing financial support to
these activities. 64
However, it appears from Mr. Huston’s memorandums that he was
not anxious to limit the activities of the Special Service Staff merely to
tax matters. On September 21, 1970, Huston wrote to Haldeman that
“what we cannot do in a courtroom by criminal prosecutions to cur-
tail the activities of some of these groups, IRS could do by adminis-
trative action. Moreover, valuable intelligence-type information could
be turned up by IRS as a result of their field audits.” 65 Huston also
noted that while he had been pressing the IRS “to move against leftist
organizations taking advantage of tax shelters,” his efforts had been
“to no avail.” 66
By September, 1970, the Special Service Group had information “on
approximately 1,025 organizations and 4,300 individuals.” 67
01 Memorandum dated July 24, 1969, p. 3. See exhibit 9, p. 263.
83 Id. at p. 4.
63 Joint Committee on Internal Revenue Taxation Report, Dec. 20, 1973, p. 14.
64 3 Hearings 1343-44.
65 3 Hearings 1338.
66 Ibid. See also next section on foundations.
87 3 Hearings 1344.
141
The existence of the Special Service Staff was known to certain
Congressional investigating committees, but its existence was not an-
nounced to the general public until April 1972. 68
In August 1973, the Special Service Staff was abolished by the
Internal Revenue Service, and it was announced that financial infor-
mation about tax resisters and protesters could be adequately obtained
by the regular divisions of the IRS. However, the compiling of vast
files and information coupled with White House intentions demon-
strate the potential abuses and show the need for restraints on the use
of such information.
(5) Tax exempt foundations
As is obvious from the memorandums of Tom Charles Huston and
Patrick Buchanan, one of the major concerns of the Nixon White
House from 1969 to 1972 was that liberal and “left-wing” foundations
were using tax exemptions from the IRS to sustain their political
activities.
The difficulties experienced by the administration were examined in
a March 3, 1970, Buchanan memorandum to the President which dis-
cussed “how to combat the institutionalized power of the left con-
centrated in the foundations that succor the Democratic party.” 69
Buchanan’s basic theme was that a number of the large foundations
had been using their tax exempt status to build huge reservoirs of
capital to fund political or quasi-political undertakings that were
almost uniquely liberal in their direction, thereby causing a serious
imbalance in the political process. These foundations, notably the
Brookings Institution and the Ford Foundation, were, according to
Buchanan, controlled by individuals with definite liberal phi-
losophies — philosophies which are reflected in the public policies,
public attitudes and public undertakings sponsored by the founda-
tion. 70
To remedy the problem, Buchanan proposed a number of recom-
mendations, including : The utilization of the Internal Revenue Service
to place checks on those foundations that were hostile to the Nixon
administration; the removal of what Buchanan perceived as a pre-
existing Democratic bias at the Internal Revenue Service ; the selective
distribution of Government funds to those foundations friendly to the
Nixon administration goals ; and, most importantly, the creation of a
new foundation to serve as a haven for conservative intellectuals. 71
Buchanan also suggested that there be “a strong fellow running the
Internal Revenue Division ; and an especially friendly fellow with a
friendly staff in the tax-exempt office. Am not sure we have this right
now.” 72
Another of Buchanan’s suggestions for curtailing the influence of
certain liberal foundations was to disburse selectively Federal grants
by the administration. “The administration should begin * * * to
initiate a policy of favoritism in all future Federal grants to those
institutions friendly to us, that want work — and we should direct
future funds away from the hostile foundations, like Brookings.” 73
68 See Joint Committee on Internal Revenue Taxation Report, Dec. 20. 1973, p. 15.
09 Memorandum to the President from Patrick J. Buchanan dated Mar. 3, 1970; 10
Hearings 4114.
70 10 Hearings 3943-52.
71 10 Hearings 4114.
n 10 Hearings 4118.
73 10 Hearings 4115.
142
Buchanan suggested that the President direct a study of the top 25
foundations in this country, which among other things, would reveal
“which are friendly, which are potentially friendly, which can be co-
opted to support projects that the President supports, and which are
hostile to us ; which are the arms of political adversaries.” 74 Buchanan
also recommended that the President direct the Bureau of the Budget
“to come up with a listing of all Federal moneys from each department
that go to foundations for studies and research.” Thus, with the crea-
tion of an administration-oriented conservative foundation, Buchanan
envisioned :
All Federal contracts now going to institutions which are
essentially antiadministration would be shifted to this new
baby and to other proadministration foundations. Antiadmin-
istration foundations should be cut off without a dime. One
good talk to the Cabinet would be all that would be required
to get cooperation here — and Budget could be on notice to
notify the West Wing [of the White House] if Brookings
gets any more money. 75
Other individuals in the White House also gave thought to the
problem of “liberal” foundations. John Dean asked Jack Caulfield in
the summer of 1971 to consider how the administration could most
effectively deal with the Ford Foundation and the Brookings In-
stitution in 1972.
Caulfield’s solution to the problem was, similar to Buchanan, to
apply pressures to have the Internal Revenue Service strictly enforce
existing Statutes and promulgated regulations designed to “threaten
the tax-exempt status enjoyed by these organizations.” 76
Caulfield also observed that :
Commissioner Walters * * * has not yet exercised the firm
leadership they expected at the time of his appointment. Addi-
tionally, there appears to be a reluctance on his part to make
discrete politically oriented decisions and to effect major
appointments based upon administration loyalty consider-
ations."
Much of the input for Caulfield’s observations came from Roger
Barth, according to Caulfield. 78 On July 20, 1971, shortly after the
publication of the “Pentagon Papers” by the New York Times, John
Dean wrote a memo to Bud Krogh which stated in part :
In your work on the Pentagon Papers and related issues
you will become aware of the fact that there is a publication
out of the Brookings Institution indicating that they are
planning for the fall of this year a study of Vietnam based
on documents of a current nature. Chuck Colson has made
some efforts to determine what Brookings is up to but I
don’t think he has produced any solid evidence of the na-
ture of this publication. I requested that Caulfield obtain
74 10 Hearings 4114 .
75 10 Hearings 4117 .
™ 21 Hearings 9771 .
77 Ibid.
78 22 Hearings 10357 .
143
the tax returns of the Brookings Institution to determine if
there is anything that we might do by way of turning off
money or dealing with principals of the Brookings Institu-
tion to determine what they are doing and deal with any-
thing that might be adverse to the administration. 79
Caulfield did other checking into tax-exempt institutions at about
this time for John Dean. On July 6, 1971, he reported on Potomac
Associates, an organization that the White House feared would de-
velop into another Brookings Institution. Caulfield noted that the
building where Potomac Associates had offices appeared to have good
security with a guard present in the lobby at all times. However,
Caulfield noted that “a penetration is deemed possible if required.” 80
Caulfield was also asked to investigate the Fund for Investigative
Journalism. 81 Caulfield wrote a memo to John Dean on February 17,
1972, that a “discreet inquiry” determined that the Fund for Inves-
tigative Journalism had a tax-exempt status granted by the IBS in
April 1970.
In addition, Caulfield said that the fund was the principal source
for financing stories of the Mylai massacre and that it was primarily
financed with “extreme leftwing” money. Caulfield noted that a re-
quest for more detailed information “will be in hand on a discrete
basis during the early part of next week.” 82 This reference concerned
the investigation conducted by Tony Ulasewicz at Caulfield’s direc-
tion. 83
The request for a tax exemption by the Center for Corporate Be-
sponsibility, a nonprofit organization designed to promote corporate
social responsibility through educational and research activities, was
denied by the Internal Bevenue Service on May 16, 1973, despite
unanimous approval by the Interpretive Division of the Chief Coun-
sel’s office at IBS. 84 The opinion denying the tax exemption was writ-
ten by an attorney with no prior involvement in the case at the direc-
tion of Boger Barth, then Deputy Chief Counsel. 85 Notes of the As-
sistant Director of the Interpretive Division found in the IBS file
on the case said, “ perhaps White House pressure .” 86 Finally, on De-
cember 11, 1973, Judge Charles Bichey ordered that the Center be
recognized as a tax-exempt organization by the Internal Bevenue
Service. 87
3. FEDERAL BUREAU OF INVESTIGATION
Another technique of the White House Staff was to obtain derogatory
information about individuals from investigative agencies such as the
FBI and to disseminate the information to the press by way of selective
“leaks.” Caulfield referred to the process of disseminating derogatory
information about individuals to the media as a “Nofziger job.” Caul-
field testified that he meant that Lyn Nofziger, “whose talents in that
70 21 Hearings 9771.
80 21 Hearings 9765.
81 21 Hearings 9877.
82 IMd.
88 Ulasewicz interview, June 9, 1973. Using a pretext name, Ulasewicz interviewed Ronald
Ridenour, the Army photographer who helped to break the story in California. He also
interviewed others involved in breaking the story.
84 See Center on Corporate Responsibility, Inc. v. Shultz et al., U.S. District Court for the
District of Columbia, Dec. 11, 1973, p, 7 (mimeo).
85 Id. at p. 8.
88 Id. at p. 6.
87 Id. at p. 31. The order primarily resulted from defendants’ failure to comply with the
court’s discovery orders. (Id., p. 16.)
144
area were much greater than anyone else around the White House,”
would make the derogatory information available to reporters to do
Stories on the individuals. 88 Nofziger explained that he merely pro-
vided significant political information to reporters, and that there was
nothing unusual about doing this in either political campaigns or in
Government itself. 89
Some examples of White House use of the FBI to obtain information
on individuals for non-law-enforcement purposes are related below.
In the summer of 1969, while John Dean was working at the Depart-
ment of Justice, he testified that he was directed by Deputy Attorney
General Richard Kleindienst to call Cartha DeLoaeh, the Deputy
Director of the FBI, and obtain from him some information for the
White House relating to the foreign travels of Mary Jo Kopechne (the
woman who died in the Chappaquiddick accident). 90 Dean said he
called DeLoaeh and subsequently related the information he obtained
to J ack Caulfield at the White House. 91
Dean testified that on another occasion while traveling with the
President, Haldeman requested Larry Higby to direct the FBI to do
an investigation of CBS news correspondent Daniel Schorr. Higby, in
turn, informed Hoover of the request, and Hoover proceeded with a
“full field wide open investigation” that soon leaked to the press. Dean
testified that as a result, Fred Malek announced that Schorr was being
considered for an environmental post in the administration, and that
the FBI investigation was merely a preliminary background check. 92
H. R. Haldeman had no recollection of the purpose for ordering the
FBI investigation, but in light of other activities going on in the
White House at that time, the question arises as to whether there was
a valid basis for requesting the FBI investigation of Mr. Schorr.
Alexander Butterfield stated that both Haldeman and Ehrlichman
requested about eight FBI checks on nonappointees to the Government.
Among these checks were Frank Sinatra, Helen Hayes, and Daniel
Schorr. 93
In August 1971, Jack Caulfield testified that he first learned of the
upcoming Newsday series on Bebe Rebozo from Pat Henry, an FBI
agent in New York. 94 Caulfield said that Henry subsequently provided
him with more information that served as the basis for Caulfield’s
memorandum on September 10, 1971, to John Dean. 93 In this memoran-
dum, Caulfield claimed that there had been “a discreet look at the news-
paper’s publication calendar,” and that there was no indication that
the series of articles would appear during the month of September.
There is no evidence that any formal FBI investigation was launched
into the Newsday publication of the series on Rebozo. 96
Finally, Caulfield testified that he obtained information from the
FBI about Emile DeAntonio, the producer of the film, “Millhouse.”
Caulfield testified that he was asked to run a name check with the FBI
on DeAntonio by John Dean, despite the fact that DeAntonio
was not being considered at anytime for any position within the
administration.
88 22 Bearings 10379.
“ See Nofziger Interview, Aug. 13, 1973.
M 3 Hearings 922.
81 Dean Interview, July 26, 1973, p. 4.
K 3 Hearings 1071.
03 See Butterfield Interview, July 13, 1973.
04 22 Bearings 10369.
“ 21 Hearings 9793.
22 Hearings 10370.
145
Caulfield received a summary from the FBI of what their files
contained, and noted in a memorandum to Dean that if Larry O’Brien
“got behind” the “Millhouse” film, “we can, armed with the Bureau’s
information, do a Nofziger job on DeAntonio and O’Brien.” 97 Finally,
the success of “Millhouse” apparently reached such proportions that
Caulfield recommended to Dean the “release of DeAntonio’s FBI
derogatory background to friendly media.” 98
Caulfield also recommended in this memo that a discreet IRS audit
be done of New Yorker Films, DeAntonio, and Daniel Talbot, the
distributor of the film. Caulfield testified that Dean turned down
Caulfield’s suggestions, but the fact that Caulfield was able to obtain
access to FBI information so easily clearly poses a serious threat to the
rights of individual citizens unless carefully curtailed by legislation.
4. DEPARTMENT OF JUSTICE
a. Antitrust Policy
There were some suggestions made by various staff personnel to
use antitrust policy to intimidate and coerce the large media conglom-
erates into giving more favorable coverage to the Nixon administra-
tion.
In an October 17, 1969, memorandum from Magruder to Haldeman
entitled “The Shotgun Versus the Rifle,” Magruder discussed the
problem of perceived unfair coverage of the White House by news
media :
The real problem that faces the administration is to get this
unfair coverage in such a way that we make a major impact
on a basis which the networks, newspapers, and Congress will
react to and begin to look at things somewhat differently. 99
Magruder suggested the Antitrust Division as a potentially useful
agency in curbing media unfairness. He recommended that the
administration :
Utilize the Antitrust Division to investigate various media
relating to antitrust of violations. Even the possible threat
of antitrust action I think would be effective in changing
their views in the above matter. 1
Jack Caulfield also recommended that the antitrust laws be used
to curb the media. In a memo to John Dean on November 2, 1971,
Caulfield, with the concurrence of Lyn Nofziger, recommended that
antitrust action be taken against the Los Angeles Times, in response to
their publication of a new street edition. 2 Dean requested an opinion
from his aide, David Wilson, on the proposed request, but no further
action was apparently taken. 3
On April 14, 1972, the Antitrust Division of the Justice Department,
in fact, filed an antitrust suit against the three major networks. 4 It is
as yet unclear whether the articulated desires of some White House
07 21 Hearing 8 9829.
98 See Oct. 15, 1971. memorandum from Jack Caulfield to John Dean ; Ibid.
09 See exhibit 10, p. 267.
1 Ibid.
2 21 Hearings 9851.
3 Ibid .
4 See 72-819 RJK, 72-820 RJK, 72-821 RJK ; U.S. District Court for the Southern
District of California.
35-687 O - 74 - 12
146
staff members expressed above had any effect on the decision to file the
suit.
&. Internal Security Division
The Internal Security Division (ISD) of the Department of Justice
was a repository of domestic “internal security” information.
Howard Hunt testified that Robert Mardian, former Assistant At-
torney General in charge of the Internal Security Division, forwarded
FBI investigative information on Daniel Ellsberg to the Plumbers
over in the White House. 5
After he left the ISD, Mardian also arranged to provide CRP with
intelligence information on potential demonstrations. Mardian de-
fended this practice in his testimony as practical and proper. 6 When
asked if the type of information given to CRP was also available to
the public, Mardian responded :
It was available under the guidelines to any entity that
might be the subject of violent civil disorder and the appro-
priate people that should know of the potential so that they
might arrest it. 7
James McCord testified that the initial request for additional intelli-
gence on demonstrators originated with Robert Odle, CRP’s direc-
tor of administration 8 In a memorandum to then- Attorney General
Mitchell, Odle outlined CRP’s need for additional intelligence on
potentially violent disruptions at their Washington, D.C., office or at
the Republican National Convention. Mardian said that Mitchell con-
curred in this opinion and instructed Mardian to make the appropriate
arrangements.®
Mardian called John Martin, Chief of the ISD Analysis and Eval-
uation Section, on May 11, 1972, to tell him to expect a visit from
the CRP security people. 10 Subsequently, CRP security chief James
McCord was directed to contact Martin to obtain the needed informa-
tion. 11
After confirming the appropriateness of the meeting with his su-
periors, Martin met with McCord on May 18, 1972. 12 The first meeting
lasted for almost an hour, and then McCord and/or his assistant,
Robert Huston, met again with Analysis and Evaluation staff on
May 25, May 31, and June 2, 1972. 13
The files of the ISD shown to McCord included domestic intelli-
gence from the FBI and other related sources, according to McCord.
McCord reviewed these FBI reports, including one which he claimed
talked about a Democratic contender’s finance operation :
One such report dealt with, as I recall, a funding opera-
tion that was reported in which the McGovern committee
purportedly funded a so-called barnstorming tour of several
members of the Vietnam Veterans Against the War . . , 14
5 Hunt executive session, June 11, 1973, p. 74.
6 6 Hearings 2398-99.
7 6 Hearings 2399.
8 1 Hearings 178.
9 Mardian Interview, June 1. 1973, p. 4.
10 See ISD records ; Martin Interview, May 11, 1973.
11 1 Hearings 178.
12 Martin Interview. See also ISD logs.
18 See logs of Internal Security Division, exhibit 11, p. 273.
14 1 Hearings 180.
147
Any violence to be directed against CEP by any individuals or
groups might properly be disclosed to CEP security personnel and
appropriate law enforcement officials. However, the free flow of in-
formation out of the Internal Security Division to the President’s re-
election campaign appears to have exceeded the agency’s appropriate
function. John Martin said that no such “intelligence information”
was provided to any Democratic candidates, because the Democrats
“didn’t ask for it.” 15 This is ironic since this committee received
testimony that E. Howard Hunt was planning a violent demonstra-
tion for the Democratic convention. 18
Use of the ISD personnel to conduct interviews for the White House
during the Kleindienst confirmation hearings has been documented
earlier in this report. 17
c. Parole Board
On December 30, 1971, Charles Colson received a telephone call
from former U.S. Senator George Smathers. Smathers called Colson
to request his assistance in releasing Calvin Kovens from prison prior
to the May 1, 1972, date set by the parole board. As Smathers ex-
plained to Colson,
I really think that politically it’s a very astute thing to do
and it would not do anything but get, gain credit and com-
mendation for the President. I can guarantee that. There’s no
backlash to this at all. 18
Colson explained to Smathers that he would get to work on it, and
immediately sent a memo to John Dean saying, “the attached is much
too hot for me to handle.” 19 Colson explained to Dean that “in view
of Smathers’ decision to support, the President next year, * * * we had
better attend to this and not let it slip.” 20
Kovens was released from jail on January 6, 1972, and subsequently
donated $30,000 in cash to the Finance Committee for the Ee-Election
of the President. 21
Kovens stated that his release from prison 4 months prior to his
parole date was due solely to his health condition, and was the result
of personal intervention by the warden of the facility at Eglin Air
Force Base. 22
There is no evidence before the committee that Kovens was released
for political reasons or in exchange for a contribution except for the
ambiguous chain of events noted above. The calls referred to above,
however, indicate the willingness of White House officials to attempt
to utilize supposedly independent Government agencies for political
purposes.
5. SECRET SERVICE
Some misuse and attempted misuse of the Secret Service has already
been noted in the wiretap of F. Donald Nixon in order to avoid po-
litical embarrassment to the President. 23 CHAwever, there were addi-
15 See Martin interview. May 11, 1973.
16 10 Hearings 3983 ; see also section below, p. 166.
17 Steep. 118 supra.
18 Conversation with George Smathers, Dec. 30, 1971, p. 2. See exhibit 12. p. 277.
35 Dec. 30, 1971, memorandum from Charles Colson to John Dean attached as exhibit 12.
2<> Ibid.
21 Kovens interview, Oct. 25, 1973.
22 Ibid.
23 See p. 112 supra.
148
tional instances during the course of the 1972 campaign when White
House officials either sought or used information from the Secret Serv-
ice obtained during the course of their official duties in protecting the
Presidential candidates.
On August 16, 1972, Steve Karalekas, an assistant in the White
House, wrote to Charles Colson concerning information that he had
obtained indirectly from the Secret Service. 24 The information that
was passed on to Colson was that a Secret Service agent was upset be-
cause Senator McGovern had stayed at the home of an individual in
Massachusetts who was allegedly a “subversive.” Karalekas also wrote
that the agent had promised to continue to pass along similar kinds
of information. 25
As a result of this information, Colson had Dick Howard instruct
John Dean to check out the facts on the suspect individual’s back-
ground. Dean asked Pete Kinsey of his office to check with the White
House FBI liaison to see if there was any helpful information. 26
There is no indication that this request was ever followed up any
further.
On another occasion, a “top official” at the Secret Service brought
John Dean a “small intelligence printout regarding Senator Mc-
Govern.” The Secret Service official left the printout for Dean and
said, “I thought that this might be of interest to you.” 27 Dean recalled
that the printout had to do with Senator McGovern attending a fund-
raising function in Philadelphia along with alleged former Com-
munist supporters.
Dean said he took the document to Charles Colson who indicated
that he was interested in the information. Dean said that Colson later
told him that he had made arrangements to have the information
published. 28
Colson took the teletype report and had Joan Hall, his secretary,
retype the information contained therein. 29 William Lambert, the
same individual to whom Howard Hunt had shown the forged Diem
cables, stated that he was contacted by Colson and shown a short
teletypelike wire of about 12 lines in Colson’s office after the Demo-
cratic convention. He also recalled that the cable said something about
a fundraising meeting at an individual’s house in Philadelphia. 80
This political utilization by the White House of information
obtained from the Secret Service during the 1972 campaign was very
similar to earlier efforts by the White House to obtain information on
individuals from the investigative agencies, and was an abuse of power
by the White House during the 1972 campaign.
Some steps have already been taken in the Secret Service to insure
that such incidents do not occur again. It is critically important to
safeguard the independence of the Secret Service in order that it
properly fulfill the protective function with which it is charged.
24 21 Hearings 9894.
29 Ibid.
24 Ibid.
27 3 Hearings 923, 1071.
28 Ibid.
29 See Joan Hall Interview, July 25, 1973, p. 6.
30 See Lambert Interview, Aug. 13, 1973.
149
6. OTHER AGENCIES
a. Federal Communications Commission
In his October 17, 1969, memorandum to H. K. Haldeman noted
above, Jeb Magruder recommended that to cope with alleged media
bias, the White House :
* * * begin an official monitoring system through the FCC
as soon as Dean Burch is officially on board as chairman.
If the monitoring system proves our point, we have the
legitimate and legal rights to go to the networks, etc., and
make official complaints from the FCC. This will have much
more effect than a phone call from Herb Klein or Pat
Buchanan. 51
Charles W. Colson also prepared a memorandum with similar
objectives for Haldeman on September 25, 1970, in which he sum-
marized the pertinent points of his meeting with the chief executives
of the three major television networks. Concluding that “they are
very much afraid of us and are trying to prove they are the ‘good
guys’,” Colson recommend that he :
Pursue with Dean Burch the possibility of an interpretive
ruling by the FCC on the role of the President when he uses
TV, as soon as we have a majority. I think this point could
be very favorably clarified and it would, of course, have an
inhibiting impact on the networks and their professed con-
cern with achieving balance. 82
In the House Judiciary Committee transcript of the September 15,
1972 meeting, President Nixon discussed with Dean and Haldeman
possible FCC problems for the Washington Post when its television
and radio stations applied for license renewals :
Haldeman. The Post (unintelligible)
President. It’s going to have its problems
Haldeman. (unintelligible.)
Dean, (unintelligible) The networks are good with Maury
coming back 3 days in a row and (unintelligible).
President. That’s right. The main, main thing is the Post
is going to have damnable, damnable problems out of this
one. They have a television station
Dean. That’s right, they do.
Preident. and they’re going to have to get it renewed.
Haldeman. They’ve got a radio station, too.
President. When does that come up ?
Dean. I don’t know. But the practice of nonlicensees has
certainly gotten more
President. That’s right.
Dean, more active in the, this area.
President. And it’s going to be God damn active here.
Dean. [Laughter]
[Silence]
81 See Magruder memo. p. 2. exhibit 10, p. 268.
33 See Colson memo, exhibit 13, p. 281.
150
These examples demonstrate the tendency of individuals in the
White House to attempt to use supposedly independent agencies to
achieve political ends. The following example shows how the tendency
continued into the 1972 campaign.
b. ACTION ( Formerly the Peace Corps and Vista)
Jeb Magruder wrote to Ken Reitz, director of Young Voters for
the President, on November 28, 1971, that ACTION “is an agency
that we should be able to use politically.” Magruder recommends that
a meeting be scheduled with Joseph Blatchford, ACTION’S Director,
where it should be suggested that he :
. . . do a lot of speaking on campuses and in high schools. He
identified well with younger people and has the kind of pro-
gram they like to hear about. We used their recruiters (who
talked to 450,000 young people last year), advertising pro-
gram, public relations effort, and public contact people to sell
the President and the accomplishments of the administra-
tion. We should be involved and aware of everything from
the scheduled appearances of ACTION’S recruiters to the
format and content of its advertising. 33
Thus, the value of governmental agencies to the incumbent running
for reelection was recognized early by CRP. This use of the incum-
bency is discussed more fully in a later chapter of this report. 34
H. Public Relations in the White House
1. INTRODUCTION
During its first 4 years, the Nixon White House initiated a wide
variety of public relations efforts directed toward reelecting President
Nixon in 1972. Among the more successful of these efforts were: (1)
Letterwriting campaigns; (2) direct-mail operations; and (3) the
organization of citizens’ committees in response to specific issues.
While public relations activities are an integral part of politics and
campaigns, some of the activities initiated in the White House resulted
in some deceptive and misleading practices which are described below.
2. LETTERWRITING
The letterwriting campaigns generated by the White House were
designed to give the impression to the recipients of the letters of a
broad base of support for positions advocated by President Nixon,
while the letters also served as a vehicle for publicizing the adminis-
tration’s positions in various matters.
On October .11, 1969, H. R. Haldeman wrote a memorandum to Jeb
Magruder and ordered a program of :
sending letters and telegrams, and making telephone calls
to the senators, blasting them on their consistent opposition to
the President on everything he is trying to do for the country.
This program needs to be subtle and worked out well so they
33 See Magruder memo, exhibit 14, p. 285.
34 See section on Use of the Incumbency, Chapter 3.
151
receive these items from their home districts as well as other
points around the country. 35
This memorandum initiated the White House campaign to still criti-
cism from Republican Senators Goodell, Percy, and Mathias.
Haldeman’s handwritten notes from the bottom of a memo from
Magruder to Haldeman on October 14, 1969, note that this campaign
against the moderate Senators was being carried out with the aware-
ness of the President. In part, Haldeman wrote :
* * * this was an order, not a question, and I was told it
was being carried out and so informed the P[ resident]. 36
Haldeman apparently wanted to keep this letterwriting campaign
against the dissident Senators secret, for he wrote across an October 16,
1969 memorandum from Jeb Magruder, “This should be reported
orally — or at least in a confidential memo.” 37
Other letterwriting campaigns with letters sent to influential Sen-
ators and to the “letters to the editor” column of newspapers were
initiated to support the nomination of G. Harrold Carswell to the
Supreme Court and to support the President’s speech announcing the
invasion of Cambodia in May, 1970.
Shortly after the letters supporting Carswell campaign, a discreet
letterwriting operation was set up at the Republican National Com-
mittee by Jeb Magruder with suggestions from Patrick Buchanan. 38
Betty Nolan was hired by the RNC in May, 1970, to direct the letter-
writing campaign and during this time, Nolan reported to RNC offi-
cials and to Jeb Magruder at the White House through his aides,
including Gordon Strachan and Ron Baukol. 30
Ideas for letters came from Magruder’s staff, from the RNC Office
of Communications and from news stories that Nolan read. Letters
were prepared, except for signatures, by Ms. Nolan and then distrib-
uted to volunteers in Washington and throughout the country who
signed the letters and then sent them in as personal letters to the
addressees designated by the RNC.
During the first weeks of the letterwriting program, Nolan was
unable to find individuals willing to sign the ghosted letters. Nolan
recalled that someone (she does not recall who) suggested that false
names without addresses be used on the letters. Therefore, from May
1970 until sometime in July 1970, some falsely signed letters were sent
to the newspapers. 40 In July, 1970, Gordon Strachan became Ms.
Nolan’s contact on the Magruder staff, and with advice from Strachan
and help from the Young Republicans, Nolan organized a network of
people to sign and mail the prepared letters, thus making false signa-
tures unnecessary. 41 Subsequent letterwriting campaigns were initiated
to influence key journalists such as Katherine Graham, Eric Sevareid,
and some newspapers such as the Washington Star. 42
In January or February 1971, Magruder assigned responsibility for
the letterwriting campaign to Ron Baukol, a White House fellow. In
a memorandum to Charles Colson on April 26, 1971, Baukol described
35 See exhibit 15, p. 286.
s « See exhibit 16, p. 289.
37 See exhibit 17, p. 291.
88 Magruder interview, Oct. 1, 1973, p. 1.
39 Nolan interview, Sept. 3 and Sept. 28, 1973, p. 3.
40 Betty Nolan interview. Sept. 28, 1973, p. 1.
41 Betty Nolan interview, Sept. 28, 1973.
42 See exhibit 18, p. 292.
152
the effort as “a true undercover operation in which letters are printed
as letters from private citizens. One girl * * * at the RNC * * * gener-
ates 30 to 35 letters per week, of which an average of two to three are
printed.” 43 Baukol added the program was expanding “slowly, so the
security of the program will not be breached.” 44
In February, 1972, Betty Nolan began to organize the Committee
To Re-Elect the President’s letterwriting campaign. Most of the
early letters generated by the CRP focused upon the leading Demo-
cratic candidates. During the course of the campaign, about 50 letters
a week were prepared and mailed to volunteers, with most of the letters
in final form, needing only a signature before being mailed to news-
papers.
After President Nixon announced on May 8, 1972, that the United
States was going to mine Haiphong harbor and resume the bombing of
North Vietnam, the letters operation was an integral part of the mas-
sive public relations effort undertaken by the CRP to generate support
for the President’s policies. CRP’s response to the President’s an-
nouncement is outlined in a memorandum from Rob Odle to John
Mitchell, dated May 9, 1972. 45 Odle noted that “Betty Nolan’s letters-
to-the-editor apparatus began to crank up her troops and we expect
over 1,200 telegrams as a result of this operation.” 48
Gordon Liddy, then counsel to the Finance Committee To Re-Elect
the President, wrote to John Mitchell on May 15, 1972, that :
Betty Nolan hit four of the Senators with 195 letters. In
addition, early yesterday morning she had over 70 letters sent
to the New York Times protesting its May 10 editorial. (All
other staffers were instructed at the May 11 staff meeting to
write similar letters to the Times) . 47
Rob Odle, former Director of Administraton for CRP, testified
before the Select Committee that “[t]he entire campaign apparatus
that week went to work in support of what happened.” 48 Issues of
newspapers running polls on the President’s actions were bought en
masse by the CRP, and the poll responses were mailed in to tilt the
results toward the President. In addition, a full-page advertisement
was placed in the New York Times on May 17, 1972, by a group of
citizens supporting the President’s decision to mine Haiphong har-
bor. 49 This ad was paid for with $4,400 in cash from CRP and pre-
pared by the November group, the advertising arm of CRP. Charles
Colson admitted that he “reviewed the draft and probably made
changes in it” to the GAO. Neither the source of funds nor the group
that actually wrote the advertisement was indicated in the body of the
advertisement itself, an apparent violation of 18 U.S.C. 612, the
criminal statute governing publication of political statements. 50
Finally, as part of CRP’s campaign to generate support for the
President’s actions, Howard Hunt called Donald Segretti in Los
Angeles on May 8, 1972. Hunt said the President was about to take
very decisive action in Vietnam and asked Segretti to put together
43 See exhibit 19, p. 298.
44 Ibid.
45 See exhibit 20, p. 301.
40 Id. at p. 3.
47 See exhibit 21, p. 305. Liddy’s memorandum also described a motorcade to support the
President’s action in Miami, Fla., that received heavy support in a Cuban community.
48 1 Hearings 68.
40 See exhibit 22, p. 309.
50 See GAO report to Department of Justice, May 3, 1973, pp. 1-2.
153
support for the President’s policies to counter the expected reaction
of the peace groups. 51 Segretti called his main operatives in Florida,
Robert Benz and Doug Kelly 52 and instructed them to set up tables
for people to sign telegrams to the White House supporting the Pres-
ident. Segretti sent two telegrams to the White House that contained
several hundred false signatures. None of the individuals whose names
were on the telegrams had, in fact, approved of the use of his or her
name. 53
president’s interest
It is significant to note that a March 9, 1970, memorandum to Ma-
gruder from Haldeman succinctly characterized the President’s inter-
est in such activities. Haldeman asked Magruder to prepare for him :
* * * once every 2 weeks, a summary of the various hatchet-
man operations — letter to the editors, counterattack, etc, so
that I can report to the President on the activity in this
regard. 54
3. DIRECT MAILING
At the request of the White House Office of Communication, the
RNC built a series of mailing lists for editors, media, governors, Con-
gressmen, and political figures which were made available to offices at
the White House as well as the RN C. 55
Beginning in mid-1970, direct mail requests were received usually
from Herb Klein’s office, but as the Presidential campaign progressed,
Charles Colson’s office began ordering more direct mailings. 56 From its
formation, the Committee To Re-Elect the President also utilized RNC
mailing facilities for the reproduction and distribution of political
materials.
The primary deceptive practice found in the direct mail operation
was the concealment of the true source of some of the letters and mail-
ings that were distributed. Some letters were distributed that were
printed on private or business stationery of the individuals involved,
but the letters failed to acknowledge that the costs of preparation,
duplication, and distribution were not borne by the individuals sending
out the letter. For example, a letter from former Senator George A.
Smathers endorsing President Nixon for re-election was sent out by
the direct mail operation of the RNC to thousands of individuals.
Written instructions to Diana Burns, the individual in charge of the
direct mailing operation, directed her to change the letter in any
manner necessary to alter its appearance beyond identification as
coming from RNC. 57 Other examples of distribution without mention
of a source were also found. A reprint of a newspaper article indicating
that Representative Pete McCloskey would consider backing a third
party candidate was set up with mail room specifications indicating
that the articles should be mailed in “plain No. 10 envelopes” with com-
memorative or unusual stamps to disguise the source of the mailing to
top newspaper and political figures. 58 Another example of a disguised
81 See Segretti interview and witness summary, p. 8.
52 Segretti witness summary, p. 8.
53 10 Hearings 8995 ; Segretti interview notes and witness summary, p. 9.
54 exhibit 23. p. 810. ^ „ ,
55 Memorandum from Herbert Klein to Harry Dent, Brice Harlow, and Lyn Nofziger,
Nov. 4. 1969.
88 Diana Burns Interview. Aug. 14, 1973.
57 Memo to Diana Burns, Mar. 22, 1971, exhibit 24, p. 311.
58 RNC mailroom files — instructions dated Nov. 29, 1971.
154
source of distribution was the reproduction of an International Broth-
erhood of Teamsters news service press release reporting the executive
board endorsement of President Nixon for re-election. One thousand
copies of this release were mailed by the RNC in plain, hand-addressed
envelopes. 59
Such procedures to disguise the true source of these direct mailings
would appear to violate the spirit, if not the letter, of the law as defined
in the United States Code, title 18, section 612, which provides :
§ 612. Publications or distribution of political statements
Whoever willfully publishes or distributes or causes to
be published or distributed, or for the purpose of publish-
ing or distributing the same knowingly deposits for mailing
or delivery or causes to be deposited for mailing or delivery,
or, except in cases of employees of the Postal Service in the
official discharge of their duties, knowingly transports or
causes to be transported in interstate commerce any card,
pamphlet, circular, poster, dodger, advertisement, writing, or
other statement relating to or concerning any person who has
publicly declared his intention to seek the office of President,
or Vice President of the United States, or Senator or Repre-
sentative in, or Delegate or Resident Commissioner to Con-
gress, in a primary, general, or special election, or convention
of a political party, or has caused or permitted his intention
to do so to be publicly declared, which does not contain the
names of the persons, associations, committees, or corporations
responsible for the publication or distribution of the same,
and the names of the officers of each such association, com-
mittee, or corporation, shall be fined not more than $1,000
or imprisoned not more than one year, or both.
4. CITIZENS COMMITTEES
Another aspect of the White House public relations program was
the establishment of special citizens committees to generate support for
the President on specific issues. Executive directors for these commit-
tees were usually found in the Washington area, and financial sup-
porters were recruited by the White House. Financial support for the
citizens committees came from many prominent contributors. 90 How-
ever, the White House role in establishing and operating these citizens’
committees was never publicly acknowledged. Advertisements support-
ing the President were edited, sometimes written, and reviewed by in-
dividuals in the White House. 61
Brief descriptions follow of some of the “citizens committees” estab-
lished through White House efforts :
a. Tell It To Hanoi Committee
The “Tell It To Hanoi Committee” was organized after President
Nixon’s announcement of the invasion of Cambodia in May 1970. Fi-
nancial support came from Jack Mulcahy, a heavy contributor to the
1970 Presidential campaign and its chairman was William J. “Pat”
O’Hara, a New York attorney.
" See exhibit 25, p. 314.
60 Jeb Magruder interview, Oct. 1, 1973.
01 Ibid.
155
Numerous memorandums attest to the close relationship between this
“independent citizens committee” and the White House. Invoices for
services from the advertising agency placing the ads were forwarded
to Jeb Magruder at the White House, but Magruder says they were
paid for by the citizens committee and not from White House funds. 02
In a May 5, 1970, memorandum to the President, Magruder re-
ported that the “Tell It To Hanoi Committee” had placed advertise-
ments in more than 40 newspapers and sent more than a million pieces
of mail asking for public support. 83 None of the advertisements iden-
tified the role of the White House in preparing this information.
b. Citizens Committee To Safeguard America
This group was formed to support the President’s policies on the
proposed antiballistic missile system and was responsible for placing
a number of full-page newspaper advertisements supporting the ABM
system. Haldeman wrote to Magruder on August 6, 1970, that Presi-
dent Nixon was especially pleased with the “Safeguard ad” and that
whoever had written it should be complimented. A hand-written note
on the bottom of the memorandum by Rob Odle says “Colson says he
did it.” 64
The value to the White House of such independent citizens com-
mittees is clear : They provided a means of persuading the populace
to support administration policies without identifying the White
House backing for them, and, more importantly, they created the im-
pression that independent groups supported White House policies. An-
other advantage of these “independent” citizens committees was illus-
trated in a December 1, 1970, memorandum on political polling from
Larry Higby to Herb Klein. 65 To make the White House-sponsored
polls effective, Higby stated, “. . . we need other organizations that
we can hang the polls on that will have credibility.” 66 A list of pos-
sible “independent” groups that could be used for polling was attached
to the memorandum; it included that “Tell It To Hanoi” committee
and the “Committee for a Responsible Congress,” both creations of
the White House.
The success of the “Tell It to Hanoi Committee” and the “Commit-
tee To Safeguard America” led to the formation by the White House
of “citizens committees” to attack key Senatorial candidates in the
1970 Congressional elections. In a June 17, 1970, memorandum to Jeb
Magruder, Larry Higby urged the formation of citizens committees
to run advertisements attacking Senate opponents of the
administration. 67
c. Committee for a Responsible Congress
One such group was the “Committee for a Responsible Congress.”
Jeb Magruder said that a series of “negative ads” aimed at' the
62 Magruder interview, Oct. 1, 1973. Records of the Ayer/ Jorgensen /MacDonald Agency
show that on an account of $193,000, exactly $178,000 was paid to the agency by the “Tell
It To Hanoi Committee.” The remaining balance was covered by four checks from the
Republican Campaign Committee and the Republican Finance Committee, ^ee exhibit 26,
p. 316.
83 See exhibit 27, p. 317.
64 See exhibit 28. p. 320.
85 See exhibit 29, p. 322.
68 Ibid.
See exhibit 30, p. 324.
156
“radical-liberals” in Congress was proposed by Charles Colson, who
prepared much of the copy, and the ads were placed by the “Com-
mittee for a Responsible Congress.” 68
Carl Shipley, a Republican National Committeeman, was enlisted
by White House staff as the treasurer of this committee. 69 Shipley
recruited six other people to serve on the committee, giving them his
word that it was a legitimate request and that he was calling at the
instruction of the White House. 70 None of the committee members ever
solicited or contributed any money in support of the advertisements.
Shipley said he first saw the copy for the ads that were placed at
a meeting in the Executive Office Building attended by Magruder
and Colson, representatives of an advertising agency, and possibly
Haldeman or Ehrlichman. Neither he nor any of the other committee
members was ever contacted as to the content or target of the
advertising. 71
d. Committee for the Congress of 1970
The committee for the Congress of 1970 was similarly established
to place a series of positive advertisements supporting congressional
candidates favorable to the Nixon administration. Its treasurer was
Alexander Lankier, the former State chairman of the Maryland Re-
publican Party. Lankier recalled that he was called by Charles Colson
and asked if he would lend his name to a series of political adver-
tisements. 72
Money for the advertisement was given to Lankier by the White
House and forwarded by him to Ayer/Jorgensen/MacDonald, Inc.,
the same advertising agency that handled the “Tell It to Hanoi” ac-
count. 73 Lankier does not recall who delivered the cash to him, al-
though he did recall that $80,000 in cash was received via Colson’s
authorization. 74
Despite their lack of success in the 1970 congressional elections, the
White House public relations people favored the formation of citizens
committees in the 1972 Presidential election. Rob Odle, discussing
campaign organization in an October 29, 1971, memorandum to the
Attorney General, reviewed the work of committees like “Tell It to
Hanoi” and suggested other citizens committees that could be used in
the 1972 campaign. 75
Patrick Buchanan, in a March 14, 1972, memorandum to John
Mitchell, also recommended that citizens committees be established
to attack political opponents. Buchanan suggested the following
scenario :
. . . soon after the Democratic Convention there be estab-
lished one genera] committee with an odd sounding name, and
other committees tailored to specific issues, i.e. “United States
Security Council,” which can then be mailed in bulk to GOP
or citizens groups for distribution in target states. Chuck
68 Magruder interview, Oct. 1, 1973.
® Shipley interview, Oct. 15, 1973.
70 Shipley stated that some of the people contacted refused to join the committee and that
he told them their refusal to participate would be communicated to the White House staff.
Shipley interview, Oct. 15, 1973.
n Ibid.
72 Alexander Lankier interview, Oct. 10, 1973.
73 Ibid.
74 Ibid.
75 See exhibit 31, p. 325.
157
Colson’s shop could have such, one imagines, established in
a matter of hours.
The specific committee should zero in on issues — depend-
ing on the Democratic candidate — where the opposition is
especially vulnerable. For example, were Muskie the nominee,
we would have a committee on defense of the United States,
one on space, one on aid to nonpublic schools, etc. 78
The “Citizens Campaign” in 1972 consisted of numerous commit-
tees, ranging from the “Massachusetts Lawyers Committee for the
Re-election of the President” to “Nursing Homes for Nixon- Agnew.” 77
Two examples are discussed below.
e. Labor for America Committee
Charles Colson requested the formation of a dummy committee as
a vehicle through which a mailing to labor could be funded. 78
In October 1972, a registration form and statement of organization
was submitted to the General Accounting Office (GAO) for the “Labor
for America Committee,” which stated that the committee supported
President Nixon’s reelection. The committee’s address was a local post
office box rented by Mrs. Myles Ambrose, wife of the former Com-
missioner of Customs. In its filing with the GAO, the Labor Com-
mittee indicated receipt of a $4,400 contribution from the FCRP. This
money was used to reprint a brochure entitled “Why Labor Can’t
Support George McGovern,” which was a reproduction of an unsigned
pamphlet circulated at the Democratic National Convention attacking
McGovern’s voting record on issues affecting labor. 70
The reprinting and distribution of this pamphlet by a purportedly
labor-affiliated organization enhanced the credibility of the contents.
Were the same charges to have been published directly by the Com-
mittee To Re-Elect the President, the impact of the charges would have
been diminished.
/. Citizens for a Liberal Alternative
There were also “citizens committees” which had no members at all.
The “Citizens for a Liberal Alternative” was such a dummy
committee.
In the late fall of 1971, Bart Porter stated that Jeb Magruder told
him to contact Ken Khachigian, a White House speech writer, about a
pamphlet the White House wanted distributed. 80 Magruder instructed
Porter to have the pamphlet printed and mailed to a group of leading
liberals. While Ken Khachigian prepared the pamphlet in the White
House, the pamphlet purported to be from the “Citizens for a Liberal
Alternative.” The pamphlet attacked Senator Muskie on a variety of
issues thus appearing to come from a group of liberal Democrats. Ac-
cording to Khachigian, Pat Buchanan edited Khachigian’s draft be-
fore it was printed in final form. 81
70 10 Hearings 4216. Written in the margin of the memo are Mitchell’S comments, “Good.
Put Colson in charge.”
77 General Accounting Office Published Record.
78 See exhibit 32, p. 336.
79 10 Hearings 3934. The brochure is at 10 Hearings 4061. Buchanan testified that this
unsigned brochure was widely distributed at the Democratic Convention by George Meany
and Alexander Barkin (10 Hearings 3958).
80 Porter interview, Sept. 6, 1973.
81 A copy of the pamphlet is at 10 Hearings 4055-58. Fatrick Buchanan’s testimony on
this incident is at 10 Hearings 3922.
158
Porter received the final draft from Khachigian and asked Tom
Bell, a staff member of the Young Voters for the President, to have
1,000 copies printed up in 72 hours. 82 All the negatives from the pam-
phlet were returned to Porter because of the secrecy Porter de-
manded. 83 Following Magruder’s directions, Porter had the pamphlet
mailed to about 400 “liberals” around the country. 84 A plan
for Roger Greaves, “Sedan Chair I,” to distribute some of the pam-
phlets 85 at a Muskie fundraising dinner in Beverly Hills fell through
when the dinner was canceled. 86
This bogus pamphlet also found its way to the New Hampshire
primary. In February 1972, Porter instructed Roger Stone, a sched-
uler at CRP, to fly to New Hampshire with a copy of the pamphlet
and to place it in the headquarters of Senator George McGovern.
Stone left the pamphlet on a table in the McGovern headquarters in
Manchester, New Hampshire, and then went to the offices of the Man-
chester Union Leader, where he told the political editor that he had
found literature in McGovern headquarters. Stone said he expressed
outrage to the editor that the McGovern campaign was capable of
printing such trash. 87 Berl Bernhard, Senator Muskie’s campaign
manager, testified that the pamphlet from the Citizens for a Liberal
Alternative “appeared in a number of different places in New Hamp-
shire.” 88
Finally, Donald Segretti received 500 to 1,000 copies of this same
pamphlet sometime after the Florida primary, and sent them to some
of his agents, who presumably distributed them. 89
II. 1972 CAMPAIGN
A. Political Strategy
The political strategy of the Committee to Re-Elect the President in
early 1971 and 1972 was unambiguous : undercut Senator Muskie in
the Democratic primaries, divide the Democratic Party so that it
could not unite after the convention, and assist where possible in
getting the weakest Democratic candidate nominated. The absence of
a serious fight for re-nomination gave the CRP and the White House
the luxury of focusing their political efforts during this period on
potential Democratic opponents rather than serious primary con-
tenders within their own party. In the meantime, the various Demo-
cratic contenders had to concentrate their own political efforts on
obtaining their party’s nomination.
The Nixon strategy was best embodied in a series of political memo-
randums written by speechwriter Patrick Buchanan and his assistant,
Ken Khachigian. 90 The early concern with Senator Muskie resulted
82 Bart Porter Interview, Sept. 6, 1973, p. 22. See also Bell Interview, Aug. 15, 1973. Bell
recalls that only 500 copies of the pamphlet were ordered.
83 Bell Interview, Aug. 15, 1973.
84 Porter interview, Sept. 6, 1973, p. 22.
86 The plan was Magruder’s or Khachigian’s Idea according to Porter. Porter Interview,
Aug. 20, 1973, p. 13.
86 Roger Greaves Interview, Aug. 21, 1973.
87 Roger Stone Interview, Aug. 15, 1973.
88 11 Hearings 4671 ; see also testimony of Frank Manklewicz that he observed the
pamphlet In New Hampshire. 12 Hearings 4611-12.
88 10 Hearings 3994. It should also be noted that Stewart Mott placed some advertisements
from a “Committee for Honesty In Politics” In the 1972 campaign. However, Mott paid
for these ads and personally signed every one of them. (Mott Executive Session, Oct. 5,
1973.)
90 See 10 Hearings 4114-4263 for a full exposition of these memorandums.
159
from a series of public opinion polls in April, May, and June of 1971,
which showed Senator Muskie leading both President Nixon and Gov-
ernor Wallace in a three-way race. 91 Buchanan outlined a “Muskie”
strategy in a lengthy memorandum to President Nixon on March 24,
1971. Buchanan proposed creating a “Muskie Watch,” “an operation
working perhaps within the Republican National Committee, which
may even be a publicized operation, doing constant research on Ed
[Muskie] and putting out materials to interest groups, and to the
press.” 92
A few months later, Buchanan wrote :
Thus, Senator Muskie is target A as of midsummer for our
operation. Our specific goals are (a) to produce political
problems for him, right now, (b) to hopefully help defeat
him in one or more the primaries (Florida looks now to be
the best early bet, California, the best later bet), and (c)
finally, to visit upon him some political wounds that will not
only reduce his chances for nomination — but damage him as
a candidate, should he be nominated. 93
The strategy Buchanan advocated was to force Muskie to take more
stands on controversial issues and to have President Nixon attack
Muskie “on those issues that divide Democrats.” 94 The anti-Muskie
plan involved much “negative campaigning” against the Senator
rather than positive campaigning on behalf of President Nixon. In
addition, such a strategy would subject Muskie to the “pressures and
harassments that go with being a front runner, pressures and har-
assments he is not getting today.” 95
In addition, Buchanan advocated concentrating on dividing the
Democrats so that they would be unable to unite for the general elec-
tion. In a July 2, 1971 memo, Buchanan advised:
[We] maintain as guiding political principle that our great
hope for 1972 lies in maintaining or exacerbating the deep
Democratic rift between the elite, chic, New Left, intellectual
avant garde, isolationist, bell-bottomed environmentalist,
new priorities types on the one hand— and the hard hat, Dick
Daley, Holy Name Society, ethnic, blue collar, Knights of
Columbus, N YPD, Queens Democrats on the other.
The liberal Democrats should be pinioned to their hippie
supporters. The Humphrey Democrats should be reminded
of how they were the fellows who escalated and cheered the
war from its inception. 96
This “attack strategy” of dividing the opposition was a main tenet
of political faith both at the White House and the CRP throughout
the 1972 campaign.
By April 12, 1972, Buchanan observed, “Our primary objective, to
prevent Senator Muskie from sweeping the early primaries, locking
up the convention in April, and uniting the Democratic Party behind
him for the fall, has been achieved.” 97 Further on, in the same memo-
91 11 Hearings 4637 .
92 10 Hearings 4146 , 4153 .
83 10 Hearings 4186 .
94 10 Hearings 4148 .
05 10 Hearings 4147 .
90 10 Hearings 4183 .
97 10 Hearings 4225 .
160
randum, Buchanan rhetorically raised the question of “whom [do]
we want to run against.” 98 Buchanan’s clear choice was Senator
George McGovern. Later in April, Buchanan noted, “we must do as
little as possible at this time to impede McGovern’s rise.” 99
The above strategy, while not improper in itself, was ultimately
converted by others into the dirty tricks outlined below. The various
operatives and agents of the White House and the CEP also had three
major objectives in the 1972 campaign : to weaken Senator Muskie, to
divide the Democrats, and to nominate the weakest Democratic can-
didate.
The absence of primary opponents for President Nixon allowed his
political strategists to target their efforts on the Democrats. The abun-
dance of money in the CEP allowed the political operatives to set up
a concerted effort to infiltrate and interfere with the Democratic
primaries. The result was a campaign to reelect President Nixon that
was filled with illegal, improper, and unethical activity, much of
which is described below.
B. Implementation of White House and CEP Strategy
1. DONALD SEGRETTI
a. Hiring
In early 1971, Gordon Strachan and Dwight Chapin, both staff
aides in the White House working for H. E. Haldeman, discussed
the need for a “non-Colson dirty tricks operation in the field” for the
1972 campaign. 1 Strachan said that Chapin explained that he and
Buchanan had been involved in some 1968 campaign pranks such as a
false mailing sent out in the New Hampshire primary, 2 but that it
would be a good idea if the operation were moved from the White
House in 1972.
As a result, a meeting held in the early summer of 1971 among
Chapin, Strachan, Buchanan, Khachigian, and Eon Walker, head of
White House advance operations, to discuss how to structure a politi-
cal prankster operation in the field for the 1972 campaign. Buchanan
testified that he advised the group that “it should be a small operation,
and that because of 1971 * * * it ought to be under the Committee
To Ee-Elect the President.” 3
Strachan and Chapin agreed that Donald Segretti, an old college
friend of theirs from USC, would be a good candidate for the job of
pulling pranks to disrupt the Democratic Presidential primary cam-
paigns. Segretti was first contacted by Dwight Chapin in the spring
of 1971 about possible employment following his release from the
Army. 4 Segretti at that time expressed some interest in a possible job,
since both his friends worked in the White House and since he thought
that the job might include exciting work.
«" Ibid.
60 10 Hearings 4235.
1 Strachan Interview, Aug. 13, 1973.
2 Id. at p. 1.
3 10 Hearings 3923.
1 In informal interviews, Segretti noted that Strachan first called him in January 1971
on a purely social basis, and that Chapin contacted him in April 1971, about possible White
House employment. Strachan claims that Segretti first contacted him about finding a job.
See also transcript of U.S. v. Chapin , p. 220.
161
Segretti stayed in touch with Chapin and Strachan during the next
few months, and flew to Washington, D.C., to meet with them in late
June 1971. 5 Segretti met with Chapin and Strachan twice on this
visit — once at dinner at Chapin’s house, and again the following day
at lunch. At these meetings, Strachan and Chapin explained to Segretti
that his job would be to perform political pranks that would aid in
the reelection of President Nixon. 6 Segretti was given $400 in cash
from Gordon Strachan to cover his expenses for this trip. Strachan
and Chapin also cautioned Segretti not to discuss this matter with any-
one else if he were not interested. But Segretti expressed great in-
terest in the job, since it seemed to involve exciting work, and after
this meeting, he began to contact old friends about the possibility of
doing some work for the Nixon campaign.
Meanwhile, Strachan and Chapin obtained Haldeman’s approval
for the project to insure that Segretti could be paid from leftover 1968
campaign funds. Mr. Haldeman specifically approved having a per-
son in the field to disrupt the Democratic primary campaigns, and
specifically approved the hiring of Mr. Segretti. 7 In late August 1971,
Haldeman and Strachan met with Herbert Kalmbach. Strachan testi-
fied that Haldeman directed Kalmbach to pay the salary and ex-
penses of Segretti. 8
Strachan then told Segretti to contact Herbert Kalmbach in New-
port Beach, Calif., for the purpose of finalizing his employment. Se-
gretti met Kalmbach in late August 1971, and was offered a salary of
$16,000 a year plus expenses for his activities. 9 Segretti said he was
not sure if he was to be working for Mr. Kalmbach, Mr. Chapin,
or others. 10
Following his meeting with Kalmbach, Segretti had lunch with
Dwight Chapin not far from the Western White House in San Cle-
mente, Calif. During this meeting, Chapin gave Segretti a list of
cities and States on w hich to concentrate in the upcoming Presidential
primary campaigns. Segretti said that Chapin stressed to him the
secrecy of his duties, and said that his activities should be focused on
fostering a split among the various Democratic candidates to prevent
the Democratic Party from uniting behind one candidate after the
convention. 11
Chapin also emphasized to Segretti the importance of having media
impact in Segretti’s activities. For example, Segretti said Chapin sug-
gested that he have pickets with Humphrey signs at Muskie rallies.
Segretti said Chapin also suggested putting out phoney press
releases. 12
5 10 Hearings 3985.
6 10 Hearings 3980.
'[^ Hearings 2877 : Haldeman testified, “I agreed that if this man wanted to take on this
activity, Herbert Kalmbach should arrange for his compensation and expenses from the
1968 campaign fund surplus.
“It was my clear understanding that Segretti would act independently and on his own
initiative within the broad guidelines outlined above. It was also my clear understanding
that he was to engage in no illegal acts. Mr. Strachan has told me that he was so advised
and that he understood that. I had no specific knowledge of Segretti’s activities or the
details of how or with whom he worked. I do not believe that there was anything wrong
with the Segretti activity as it was conceived. I have only limited knowledge, and that
acquired only lately, as to how it was actually carried out.” Ibid.
8 6 Hearings 2502.
9 10 Hearings 3980.
10 Ibid.
11 Ibid.
12 See Segretti witness summary, p. 3.
162
Chapin emphasized to Segretti that he should focus his efforts on
Senator Edmund Muskie, the Democratic front-runner at that time. 13
Segretti said that Chapin further explained that his objective should
be to give the President his best chance for reelection in November
1972, by seriously weakening the leading Democratic candidate, Sen-
ator Edmund Muskie. If that could be accomplished, the Democrats
would have a bitter fight over the nomination and would never be able
to recover in time for the general election. 14
The alternative objective of Segretti ’s activities was to divide the
Democratic candidates among themselves to create bitterness and mis-
trust among the Democrats. 16
Following this meeting with Chapin in California, Segretti began
contacting old friends of his in California and elsewhere about doing
political work in the upcoming campaign. After his release from the
Army on September 13, 1971, Segretti received a telephone call from
Dwight Chapin. Chapin informed Segretti that Strachan would no
longer be involved in the operation. Chapin also explained to Segretti
that they would leave messages for one another under the aliases of
Don Morris (for Segretti) and Bob Duane (for Chapin.) 16 At
Chapin’s request, Segretti flew to Washington, D.C., and met Chapin
in the dining room of the Hay -Adams. 17
At that meeting, Chapin suggested to Segretti that he get both a
post office box where he could receive mail from Chapin and an an-
swering service so that he could be reached at all times. In addition,
Segretti said Chapin gave him a list of the 1968 advancemen from
Nixon’s Presidential campaign so that Segretti could begin making
contacts in the appropriate primary States. Segretti testified that
Chapin stressed he should not say or do anything which would link
his activities to Chapin, the White House, the Republican Party, or
the Committee To Re-Elect the President. Chapin also gave Segretti
the name of Ward Turnquist, an old high school friend of Chapin’s
as a possible contact in southern California. 18
Chapin directed Segretti to fly to Portland, Oreg., the following
day, preceding the President’s visit there, to observe a Presidential ad-
vance. Segretti flew to Portland on September 24, 1971, and stayed
at the Benson Hotel. 19 There he was able to familiarize himself with the
advance operation and the means used to handle demonstratrators. 20
On the morning of Sunday, September 26, Segretti met with Cha-
pin in Segretti’s room at the hotel. At that time, Chapin gave Se-
gretti a copy of the Advanceman’s Manual, and they had further gen-
eral discussions about Segretti’s activities. 21
After his meeting with Chapin, Segretti returned to Los Angeles
and received his first payment from Kalmbach, a check for $5,000 as
an advance on his expenses, and a check for $667 for his 2 weeks’
salary.
13 10 Hearings 3987.
14 Segretti witness summary, p. 2.
15 10 Hearings 4001.
16 10 Hearings 3989. In fact, Chapin actually left messages for Segretti under the name of
“Chapman.”
17 See U.8. v. Chapin, p. 231 of transcript.
18 United States v. Chapin x p. 233 of the transcript. See also Segretti interview, p. 3.
10 See 'Segretti interview and hotel records.
20 10 Hearings 3990.
21 Ibid. Segretti was not certain whether he received the Advanceman’s Manual in Wash-
ington, D.C., or in Portland, Oreg., see p. 234 of United States v. Chapin.
163
Following the Presidential appearance in Portland, Chapin wrote
Segretti a memorandum which said :
From now on, we want to have at least one Muskie sign in
among demonstrators who are demonstrating against the
President. It should be “Muskie for President” and should
be held in a location so that, it is clearly visible.
At Muskie events or events by other Democratic hopefuls,
there should be a sign or two which goads them. For example,
at a Muskie rally, there should be a large “Why Not a Black
Vice President” or perhaps “We Prefer Humphrey” or some-
thing else that would goad him along.
At Humphrey rallies, there should be Muskie signs and at
Kennedy rallies there should be Muskie or Humphrey signs,
and so on. These signs should be well placed in relationship
to the press area so that a picture is easy to get. 22
b. Activities
(1) Summary
After his meeting with Dwight Chapin at the Benson Hotel in Port-
land, Segretti set off across the country to recruit individuals to infil-
trate and disrupt the upcoming Democratic Presidential primaries.
Segretti traveled to more than 16 States and contacted at least 80 in-
dividuals in his efforts to establish an organization that was capable
of dividing the Democrats during their primaries. 23
Segretti received $45,336 from Herbert Kalmbach in the period
from September 29, 1971, until March 23, 1972. 2 ‘ Of this total, Segretti
had expenses of more than $22, 000, 25 and almost $9,000 of these ex-
penses went to 22 individuals that Segretti had contacted during his
travels. 26
Segretti’s objective in making contacts was to organize a network
of agents in the following States : New Hampshire, Florida, Illinois,
Wisconsin, Pennsylvania, Ohio, Indiana, California, New Jersey,
New York, and Texas. Almost all of these States had Presidential
primaries in 1972, and they were listed for Segretti when he met with
Chapin at San Clemente in the late summer.
(2) Relationship with Chapin
During the early period of his travels. Segretti kept in fairly close
contact with Dwight Chapin. For example, Segretti called Chapin
thirty-three times in November, December, and January 27 Segretti
22 10 Hearings 4269. , « ...
23 Information gathered from review of Segretti documents and Interviews with Segretti
an « Segretti cash Inflow : Sept. 29. 1971, $667, cheek from Kalmbach ; Sept. 29, 1971, $5,000.
check from Kalmbach; Oct. 19, 1971, $667, cheek from Kalmbach; Oct. 27, 1971, $667,
check from Kalmbach ; Nov. 11, 1971, $667, check from Kalmbach ; Nov. 29, 1971, $667,
cheek from Kalmbach; Dec. 13, 1971, $667, check from Kalmbach ; Dec. 27, 1971 $667.
check from Kalmbach: Jan. 17, 1972, $667, check from Kalmbach; Jan. 15, 1972, $5,000,
cash; Mar. 1, 1972, $5,000, cash from A. Harvey; Mar. 23, 1972, $25,000, cash from
Kalmbach. Total, $45,336.
25 Segretti expenses (1971-72): Travel, $6,019.51; telephone, $2,099.56; printing and
mailing, $1,816.43; accommodations, $1,555.80; meals, $616.68; office expense, $1,331.39;
subtotal. $13,439.37 ; payments to operatives. $8,984.70 : total expenses, $22,424.07.
26 Payments to Segretti operatives ; Benz. $2,417 ; Burdick, $335 ; Collins. $5 ; Frias, $20 ;
Garner, $265: Gratz. $50: Hayes. $31.50; Kelley, $3,436; Martin, $122; Miller, $22 ;
Neilev $40; Norton, $451.20: O’Brien, $40: Oldman, $20; Popovich, $130; Sarhad, $165;
Silva', $140 ; Staub, $50 ; Svililik, $200 ; Turnquist, $80 ; Vlsney, $710 ; Zimmer, $255 ;
total. $8,984.70.
27 10 Hearings 4314.
164
used the pesudonyms of Don Durham and Don Simmons, since Chapin
had strongly suggested to him to maintain secrecy in his operation
and to divorce totally the White House in his activities.
During these first few months’ activities, Segretti occasionally
received information and directions from Chapin. For example,
Chapin informed Segretti when Senator Muskie would be in Los
Angeles in November 1971, and asked him to line up some pickets
for the appearance. Later on, Segretti said he was told by Chapin
that Senator Muskie would be appearing at Whittier College and was
asked by Chapin to provide pickets and hecklers in the crowd. A
few days later, Segretti arranged for pickets outside of a San
Francisco Hotel where Senators Muskie and Humphrey were appear-
ing at a Democratic dinner.
Following Senator Muskie’s appearance at Whittier College in
November 1971, Segretti received in the mail a copy of the White House
news summary from Chapin which said, “Reynolds said that he
[Muskie] had come prepared for conservative questions, but the
Chicanos gave him no chance and Big Ed proved that he can keep
his cool.” 28 Penciled in on the side of the copy is a note from Chapin
which reads: “Note we really missed the boat on this — obviously
the press now wants to prove EM can keep his temper — let’s prove
he can’t.” 29
In early November 1971, Chapin instructed Segretti to travel to New
Hampshire and begin work since it was the first primary State.
Chapin also gave Segretti the name of Allen Walker, chairman of
the New Hampshire Committee To Re-Elect the President. Segretti
said that Walker seemed very receptive to his ideas, and that he felt so
much at ease with Walker that he gave him his true name. 30 Shortly
thereafter, Segretti received a phone call from Dwight Chapin who
told Rim to leave New Hampshire immediately. Segretti traveled to
Washington and met with Chapin in Segretti’s hotel room. Chapin told
Segretti to stay out of New Hampshire, move on to Florida and never
again to use his real name. 31
Chapin had general knowledge of much of Segretti’s activities. 32
Segretti testified that most of the literature, bumper stickers, and false
letters that were distributed by Segretti were sent to Chapin’s home in
Washington after they were printed up. In addition, Segretti sent
newspaper clippings to Chapin concerning his field activities as well
as hand-written notes explaining his activities of the previous week.
Chapin’s reactions to Segretti’s activities were always very positive
and Segretti has no recollection of the issue of the legality of Segretti’s
activities ever being discussed with Chapin. 33 Segretti specifically
recalls sending Chapin the “Muskie Bussing” poster, the sex smear
letter on Muskie stationery against Senators Jackson and Humphrey
and the Humphrey press release about Shirley Chisholm (all discussed
below).
During the months of December, January, and February, Segretti
raised many doubts in the minds of people that he was recruiting.
28 10 Hearings 4271-72.
20 Ibid.
30 10 Hearings 3993.
31 Ibid.
32 See Segretti testimony, 10 Hearings 3979-4053 ; see also Segretti and Chapin testimony
in U.S. v. Chapin.
33 Segretti witness summary, p. 6.
165
Many of these individuals — Young Republicans, College Republicans,
and Young Voters for the President — relayed messages back to Bart
Porter, Tom Bell, and Ken Rietz, at the CRP, who in turn sent the
messages on to Jeb Magruder. Generally, the complaints were that
there was an individual in the field who was causing serious problems
for the Committee To Re-Elect the President. 34
Such a complaint was sent from J. Tim Gratz of Madison, Wiscon-
sin, to Carl Rove, president-elect of the College Republicans. This
complaint was eventually assigned to Anthony Ulasewicz who flew out
to Wisconsin to investigate this mysterious individual. Ulasewicz did
not succeed in tracking down Segretti, but while he was out in Wiscon-
sin, he received a call from Jack Caulfield who informed him that
Segretti worked for CRP. 35
Many of these complaints about Segretti were sent to Magruder, who
wrote a memorandum to John Mitchell in January, 1972, entitled “Mat-
ter of Potential Embarrassment,” in which he described this individual
in the field and urged that the individual should be placed under the
direction of G. Gordon Liddy. 36 After receiving a copy of that memo-
randum, H. R. Haldeman told Gordon Strachan to call Segretti to
tell him to expect a call from Liddy, who would give him instructions
in the future. This memorandum describing the ‘‘Matter of Potential
Embarrassment” was shredded following the Watergate break-in by
Strachan at Haldeman’s directions, according to Strachan’s
testimony. 37
Segrett i was told by Dwight Chapin in either a phone call or at their
meeting in Washington on January 20, 1972, that some people in
Washington had been disturbed by some of the problems that Segretti
had caused in .New Hampshire and Wisconsin, Chapin told Segretti to
expect a call from an individual who would be checking up on his
activities. 88
(J) Relationship with Hunt and Liddy
In late January 1972, Liddy told Howard Hunt that a Democrat
was trying to infiltrate Republican headquarters in some of the pri-
mary States in the upcoming campaign. Liddy sent out a communique
to all the State Committees To Re-Elect the President headquarters
with the individual’s description in an effort to find the person who
was engaging in these “counterproductive” activities. Four or five
days later, Liddy came back to Hunt and said that he had stepped on
some toes since the individual really worked for the Committee to
Re-Elect the President. 39 Shortly thereafter, Liddy told Hunt that he
had been asked to evaluate Segretti’s work by the people for whom
Segretti was working. 40 Hunt also testified that Liddy told him the
Segretti’s principals wanted Hunt and Liddy to keep tabs on this in-
dividual as well as to provide assistance if it did not hazard their own
operations. 41
A few days after his conversation with Chapin, Segretti received a
call in California from an “Ed Warren” (Howard Hunt), who asked
to meet with Segretti as soon as possible.
34 See interview of Porter, Bell, and Rietz.
35 Ulasewicz interview, May 8, 1973.
33 6 Hearings 2459.
37 Ibid.
38 10 Hearings 3983.
38 Hunt executive session, May 14, 1973, p. 335.
43 Ibid.
41 Id. at p, 336.
166
On February 11, 1972, Segretti traveled to Miami and on the follow-
ing day two men came to Segretti’s motel room to meet him. They in-
troduced themselves as Ed W arren and George Leonard. 42
Hunt immediately turned on the television set in Segretti’s room
to prevent surreptitious taping of the meeting. Segretti explained
to Hunt and Liddy that his activities consisted primarily of providing
pickets at appearances by opposition candidates and distributing
bogus pamphlets and leaflets that could embarrass the Democrats.
Hunt and Liddy advised Segretti to use false identification, but they
never provided any for him. In addition, Hunt provided Segretti with
the name of J ose Arriola to do Segretti’s printing in the Miami area. 43
Segretti explained that he was having some difficulty in obtaining
Senator Muskie’s schedules, and so Hunt agreed to furnish this infor-
mation to Segretti. In addition, Hunt gave Segretti his telephone num-
ber and told him to keep in touch. 44
After this initial meeting of 10 to 15 minutes, Segretti maintained
sporadic contact with Hunt. Occasionally Hunt would make sugges-
tions, to Segretti about possible activities. Some of these suggestions
are listed below in the pages describing specific activities carried out
by Segretti and his associates.
Segretti’s last meeting with Howard Hunt was on June 9, 1972,
at the Sheraton Four Ambassadors Hotel in Miami, Fla. At this meet-
ing, Hunt suggested that Segretti put together a group of peaceful
demonstrators to picket the Doral Hotel during the Democratic Con-
vention.. Hunt explained that another group of unruly demonstrators
was to join in the demonstration and attempt to disrupt it, and that
the bad conduct of the crowd would be blamed on Senator McGovern.
However, the Watergate break-in occurred on June 17, 1972, and any
plans for the convention by E. Howard Hunt were temporarily
quashed. 45
(If) Primary activities
Segretti’s most successful operation in the Democratic primaries
was in Florida, where he recruited Bob Benz to head up the operation
in Tampa, and Doug Kelly to help him in Miami. Segretti paid Benz
$2,417 for his activities, and sent Kelly $3,436 for his help. 46 Segretti
was also fairly successful in recruiting people for the California pri-
mary. These individuals included James Robert Norton., who obtained
an answering service for Segretti in East St. Louis and a number of
other individuals with experience in State politics that Segretti could
rely on to distribute literature and to harass appearances by Demo-
cratic candidates.
In addition, Segretti recruited Tom Yisney and Charles Svihlik to
create problems for the Democrats in Illinois, Indiana, and Wisconsin
and Skip Zimmer and Bob Nieley for work in the Pennsylvania pri-
mary. Finally, Segretti enlisted the help of Michael Martin,, Jr., for
the New York primary, and Bobby Garner of Houston to provide help
in Texas, if that State were to become crucial. 47
The following account is a summary of the kinds of activities in
which Segretti and his associates engaged during the 1972 campaign.
42 10 Hearings 3983.
43 Segretti witness summary, p. 7.
44 Id. at p. 8.
45 10 Hearings 3983.
48 Segretti witness summary, p. 5.
47 See Segretti witness summary, payments to- Segretti operatives.
167
(a) Infiltrators — Florida: One of the objectives that Chapin out-
lined to Segretti for his operations was to place infiltrators in Demo-
cratic primary campaigns to gather information and to create division
among the Democratic candidates. When Robert Benz met Segretti for
the first time, he was told “to obtain hecklers, pickets, and also to get
people to infiltrate into the campaigns, to gather information,” and
that Segretti would provide money to pay these people. 48
Benz immediately recruited Peg Griffin, a secretary in Tampa, active
in Republican politics, and asked her to infiltrate the Muskie campaign.
Benz testified that he told the Muskie people that “she was a Repub-
lican, that she did not care for the President’s policies, and that she
was now a backer of Senator Muskie.” 49 Benz paid Ms. Griffin $75 a
month to infiltrate the campaign. In exchange, Griffin provided Benz
with campaign literature, information about the campaign strategy,
stationery from Senator Muskie’s campaign, names of the campaign
staff and precinct captains for Senator Muskie, and some names of
financial contributors. Benz testified that he in turn sent all of the in-
formation that he received from Ms. Griffin to Segretti ’s post office box
in Los Angeles.
Much of the information that Griffin was able to provide from the
Muskie campaign headquarters was subsequently used to further many
of the disruptive acts that were perpetrated in the Florida campaign.
Griffin was also quite successful in disrupting the campaign on her
own. For example, in early January 1972, she learned of a secret $1,000-
a-plate fundraising dinner for Senator Muskie following a public re-
ception, and added this information on as the last two lines of a press
release from the Muskie campaign. The dinner was subsequently can-
celled by Senator Muskie because of the publicity it received. 50
Benz testified he also recruited Eselene Frolich to infiltrate the Jack-
son campaign in Florida. 51 Frolich provided Benz with the same kind
of information from Senator Jackson’s campaign that Peg Griffin
gathered from Muskie’s. This information proved to be most valuable
in conducting Benz’ field activities. 62
Benz attempted to recruit individuals to infiltrate the Humphrey
and Wallace campaigns as well, but was unsuccessful in these efforts.
Benz later traveled to Pennsylvania to recruit individuals to infiltrate
the primary campaigns there, but he was not as successful as he had
been in Florida. 53
Segretti was also under the impression that Doug Kelly in Miami
had two infiltrators into the Muskie campaign. 54 However, Kelly
consistently testified that he had no infiltrators or informants in any
campaigns in Miami. 55
California: Segretti was also successful in recruiting infiltrators
for the California primary. In the Los Angeles area, Segretti talked .to
Turnquist, Chapin’s friend from high school, who in turn contacted
Pat O’Brien and recruited him to work in the Muskie campaign in
Los Angeles and report back any political intelligence. O’Brien was
48 11 Hearings 4404.
49 11 Hearings 4405.
60 See Benz executive session, Oct. 2, 1973; pp. 17-18; see also 10 Hearings 3982.
61 11 Hearings 4405.
G2 11 Hearings 4407.
68 11 Hearings 4413.
64 See 10 Hearings 4334.
55 See, for example, Kelly executive session, Oct. 2, 1973, p. 22.
168
hired in December 1971, and worked part-time through April 1972,
in the Muskie campaign.
In San Francisco, Mike Silva was recruited by Bob Norton to ob-
tain campaign intelligence from the Muskie headquarters and be a
contact in San Francisco for Segretti. Silva told Segretti that he had
placed two infiltrators in the Muskie campaign in late February 1972.
Silva stated in an interview, however, that he did not actually place
infiltrators in the campaign, but merely gathered campaign literature
from a political science course at San Francisco State University and
forwarded the material on to Segretti at his post office box in Los
Angeles. 56
New York: In New York, Segretti hired Michael Martin, Jr., to
infiltrate the Humphrey campaign and report any intelligence infor-
mation that he gathered. Martin apparently w T as such a successful in-
filtrator that he was offered a position as director of the northern
New York campaign for Humphrey, but Segretti said that Martin
turned down the position so he could stay in New York City and con-
tinue reporting to Segretti. 57
Texas: In Texas, Segretti paid Bobby Garner, of Houston, $265,
some of which was to go to an infiltrator in the Muskie campaign in
Texas. This infiltrator was to work during the months of February,
March, and April, gathering intelligence and mailing it back to
Segretti’s post office box in Los Angeles.
The success of the Segretti operation in infiltrating primary cam-
paigns also contributed to the success of their other efforts to disrupt
and harass Democratic candidates.
(&) Surveillance.— In his meeting with Dwight Chapin in early No-
vember 1971, Segretti learned that Senator Muskie would lie visit-
ing the Los Angeles area about November 6. Segretti testified that
Chapin instructed him to hire some pickets for Muskie’s appear-
ances there and to learn the logistics of Senator Muskie’s traveling
party.
Segretti said he called Jess Burdick, an ex-CID agent who worked
as a private detective in the Los Angeles area, and hired him to tail
Senator Muskie during his trip to Los Angeles. Burdick followed
Muskie for the weekend, and reported back to Segretti information
such as the license numbers of the vehicles used by the Muskie cam-
paign. When Burdick charged Segretti $325 for his services, Segretti
thought the price was steep for the information that was provided, and
therefore did not use Burdick after the one occasion in November. 58
Physical surveillance of Senator Muskie also occurred in the Florida
primary when Robert Benz had his agents tail Senators Muskie and
Jackson when they were in the Tampa area. 59
(c) Disruptions, (i) Distribution of False and Misleading Litera-
ture. — One of the most successful tactics for disrupting the Democratic
primary campaigns used by Segretti and his operatives was the dis-
tribution of false and misleading literature. Instances of this particu-
lar campaign abuse occurred in nearly every primary State. No-
where in any of this literature w T as it noted that the literature was
financed by funds from the Committee To Re-Elect the President.
“See Silva interview, Aug. 30. 1973, Segretti was clearly under the impression that
Silva had two informants in the Muskie campaign. See 10 Hearings 4332.
67 Segretti witness summary, p. 12.
68 10 Hearings 3981.
58 See Benz witness summary.
169
Pre-primary.— After Segretti was informed by Dwight Chapin that
Senator Muskie was appearing at Whittier College in November 1971
he had a number of handouts with “hard questions” printed up which
he handed out to students at the Whittier rally. 60 Someone in the
crowd asked Muskie about his views on abortion, one of the ques-
tions on Segretti’s handout. In the White House news summary of
the event that Chapin sent Segretti. Chapin noted that Segretti’s ques-
tion had been asked. 61
Florida: False and misleading literature was most widely dis-
tributed in the Florida primary. The following list is a catalog of
the various abuses in this area perpetrated in Florida by Segretti
and his operatives.
1. About 300 red clay-glow posters were distributed throughout the
State which said, “Help Muskie in Bussing [sic] More Children now.”
The poster was signed by the “Mothers Backing Muskie Committee,”
a nonexistent committee, and the intent of the poster was to identify
Senator Muskie with a strong probusing position, a very unpopular
issue in Florida. Most of these posters were distributed by Benz,
Segretti, and Kelly in the Tampa and Miami areas of Florida. 62
2. About a thousand 4- by 6-inch cards were printed-up and dis-
tributed at a Tampa rally for Governor George Wallace by Kobert
Benz and his agents. The cards read, “If You Liked Hitler, You’ll
Just Love Wallace.” On the other side of the card, it stated “A Vote
For Wallace Is A Wasted Vote. On March 14, cast your vote for
Senator Edmund Muskie.” 63
There was no indication on the cards that they were financed by
Nixon campaign funds. The clear intent of the literature was to drive
a wedge between the Wallace and Muskie campaigns.
3. On February 25. 1972, a letter was sent on copied Muskie cam-
paign stationery to the campaign manager of the Florida Jackson
campaign and to syndicated columnists which stated that Senator
Muskie’s campaign was using Government typewriters as well as
Government employees drawing Government salaries. 64 This letter
was sent to Jackson campaign headquarters in Tampa and in Wash-
ington, D.C., and copies of the letter were also sent to local media.
The facts on which the letter was based were totally fabricated by
Segretti, and Doug Kelly and Bob Benz arranged for "the distribution
of the letter on copied stationery Pat Griffin provided from the
Muskie campaign. 85
4. Similarly, in March 1972, Segretti sent Benz a counterfeit letter
on Muskie stationery containing allegations of sexual improprieties
involving Democratic Presidential candidates Jackson and Hum-
phrey. Segretti instructed Benz to have 20 to 40 copies of the letter
printed on Senator Muskie’s stationery (which Segretti enclosed)
and distributed. 66 Benz gave the material to George Hearing, a local
recruit of Benz’, who duplicated the letter on Muskie stationery and
mailed the letter to supporters of Senator Jackson. Hearing’s list of
Jackson supporters was given to him by Benz who had obtained
60 10 Hearings 4270 .
01 10 Hearings 4272 .
02 10 Hearings 4267 , 3982 .
03 11 Hearings 4410 ; see also 11 Hearings 4292 .
04 10 Hearings 4279 .
85 10 Hearings 3982 ; 11 Hearings 4381 ; 11 Hearings 4411 .
60 11 Hearings 4411 ; 10 Hearings 3997 .
170
the information from Eselene Frohlich, the infiltrator in Senator
Jackson’s campaign. 67
This phony, scurrilous letter on Muskie stationery against Senators
Jackson and Humphrey won praise for Segretti from Chapin. On
learning that the cost of the reproduction of the letter was only $20,
Segretti testified that Chapin told him that for that small sum, he had
obtained $10,000 to $20,000 worth of benefit for the President’s re-
election campaign. 68
In May 1973, indictments concerning this incident were brought by
the U.S. attorney’s office in Tampa. At that time, Robert Benz was
given immunity and was not prosecuted, while George Hearing was
prosecuted and convicted on one count of violating 18 U.S.C. 612,
the law prohibiting distribution of unsigned political literature.
Similarly, Donald Segretti was indicted for a number of violations of
18 U.S.C. 612.
Mr. Hearing, the individual who mailed the letter, was sentenced
to 1 year in prison. Mr. Segretti, the originator of the scheme, was
sentenced to 6 months in prison after pleading guilty to three counts 69
in Federal District Court in Washington, D.C. Robert Benz, the in-
dividual who recruited Hearing and Frohlich, and who directed Hear-
ing to mail the letter, was neither indicted nor convicted of any
crimes.
5. A number of pamphlets advertising a free lunch at Muskie’s
campaign headquarters were distributed in Miami by Doug Kelly. 70
The pamphlets also advertised free liquor and a chance to meet Sena-
tor Muskie and his wife. These pamphlets were distributed all over
Miami, and a small pile of them was left at the Lindsay headquarters.
The morning before the lunch was to occur, Kelly called Muskie head-
quarters and said that the Lindsay campaign was responsible for the
false invitations. 77 The dual objectives of the literature were thus to
disrupt the Muskie campaign and to drive a wedge between Lindsay
and Muskie. 72
6. Another invitation to a Muskie campaign meeting in Miami was
obtained from the Muskie campaign by Segretti and Kelly. A line
was added to the invitation which stated “Free Food and Alcoholic
Beverages Provided,” and these were distributed in the Miami area. 73
7. Some press releases were written on Muskie stationery in Miami
by Doug Kelly, Segretti’s main contact in the area. Kelly recalled
sending out three or four bogus press releases, most of which sought to
misrepresent the position of Senator Muskie on issues such as Israel
and busing, and to draw attention to the position of Senator Hum-
phrey. 74 These releases were yet another tactic for carrying out the
strategy of “Dividing the Democrats.”
8. Kelly testified that he also distributed flyers announcing a speech
by former Secretary of the Interior Udall that had been canceled by
the Young Democrats. 75 The flyers resulted in some disruption, Kelly
87 10 Hearings 4280.
88 10 Hearings 3997.
88 The three counts consisted of two violations of 18 U.S.C. 612 and one count of con-
spiracy. 18 U.S.C. 371.
70 11 Hearings 4380.
71 11 Hearings 4380. In addition, a number of people showed up at Muskie headquarters
In response to the bogus Invitations (Tim Smith interview).
72 11 Hearings 4380.
73 See Segretti interview, p. 10.
*} 11 Hearings 4381.
75 Kelly executive session, Oct, 2, 1973.
171
testified, since the speech had to be rescheduled after the flyers
appeared.
9. Flyers were passed out in Miami by Doug Kelly that appeared
to be from Mayor Lindsay which attacked Senator Muskie’s stand on
Israel. These flyers noted that Senator Muskie felt that Israel should
be treated the same way as Cuba, thus antagonizing both J ewish and
Cuban -American voters. Many of these flyers were distributed in
Miami Beach, by being placed under windshield wipers of cars that
were parked at synagogues. 76
10. Other examples of false literature passed out in the Florida pri-
mary by Segretti and his contacts are found in the exhibits introduced
during the Segretti testimony. 77
Wisconsin: Similar kinds of false and misleading literature were
distributed in the Wisconsin primary by Segretti and his agents.
Segretti and Benz drove to Milwaukee, Wis., at the end of March
1972, to pull pranks before the April 4 primary. There they distributed
a false invitation for a free lunch with Senator Humphrey on April
Fool’s Day at which free drinks were to be given away, and guests
would have the opportunity to meet Senator Humphrey, Lome Green
and Mrs. Martin Luther King. 78 The invitation was intended to disrupt
the Humphrey campaign much as Segretti had done to Muskie in
Florida. Benz also stated that he and Segretti called the local news-
papers to inform them that the invitations had been printed by Muskie
supporters. 79
Numerous bumper stickers with derogatory sexual slogans about
Senator Muskie were put up and distributed by Segretti and Benz in
Wisconsin. 80 They were intended to embarass Senator Muskie and to
help drive down his vote total in Wisconsin. The bumper stickers were
again unidentified as to their source.
Illinois : Much of the same material that was distributed in Wis-
consin was also distributed in Illinois by Tom Visney, Segretti’s main
recruit there. In addition, Segretti sent Visney copies of the pamphlet
from the “Citizens for a Liberal Alternative,” the nonexistent citi-
zen’s committee discussed earlier. 81 This pamphlet, written in the
White House and printed by CBP, was intended to divide the Demo-
crats among themselves.
District of Columbia: On about April 13, 1972, Segretti testified he
flew to Washington at the suggestion of E. Howard Hunt to organize
disruptive activities at a Muskie fundraiser scheduled for April 17,
1972. Doug Kelly, who also flew up for the occasion, and Segretti
distributed literature which described the fundraising dinner and re-
quested pickets outside the dinner to “protest the fat cats.” 82
California: By the time of the California primary, the main Demo-
cratic contenders Were Senator McGovern and Senator Humphrey.
Most of the false and misleading literature distributed by Segretti and
his contacts in California attacked one of the Democratic candidates
and attributed the attack to another candidate, thus attempting to
76 11 Hearings 4392.
77 See 10 Hearings 4276-77.
78 10 Hearings 4285.
73 See Benz interview, Oct. 2. 1973, p. 3.
80 Copies of these bumper stickers are in the committee’s flies. They referred solely to
Senator Muskie.
S1 See p. 157 supra ; see also Segretti witness summary (interview), p. 7.
88 10 Hearings 39S4.
172
further divide the Democrats and make it more difficult for them to re-
group following the convention.
Months before the primary, Segretti reprinted a newspaper adver-
tisement by Stewart Mott and the “Committee for Honesty in Poli-
tics” which abhorred the “Secret Money in Presidential Politics.” At
the bottom of the reprint Segretti added the note, “The committee
will look for your names as part of Muskie’s fat cats ! They better be
there!” 83
This doctored reprint was distributed to individuals entering a fund-
raiser for Senator Muskie in Los Angeles by Segretti’s agents in the
area. 84
As the primary approached, the literature written and distributed
by Segretti and his contacts became much more vicious. Some exam-
ples follow :
1. Segretti sent out a statement on Humphrey press release station-
ery for immediate release which said that Representative Shirley
Chisholm had been committed to a private home for the mentally ill
from February 1951, until April 1952. The “release” went on to de-
scribe in the most vicious and scurrilous terms the “alleged behavior”
that Representative Chisholm demonstrated at that time. At the bot-
tom of the fake press release were the initials HHH. This release was
mailed out to 10 or 15 California newspapers. 85 Segretti testified that
he sent the release to Dwight Chapin, who “laughed for a period of
time” about the bogus release. 86
2. Two other false press releases on Hubert Humphrey stationery
were mailed out to the newspapers by Segretti. One release stated that
former President Lyndon Johnson favored Humphrey as the Demo-
cratic nominee, and the other one misrepresented Humphrey’s posi-
tion on one of the initiatives on the California ballot in 1972. 87 Most of
the bogus candidates’ stationery that was used by Segretti to pull his
so-called pranks was printed for him by Jose Arriola in Miami, the
printer whose name Segretti received from Howard Hunt. 88
3. Segretti also had bumper stickers printed and distributed through-
out California which said: “Humphrey: He started the Avar, don’t
give him another chance.” More than 1,000 of these bumper stickers
were printed, most of which were distributed in California. The
bumper stickers were signed by the “Democrats for a Peace Candi-
date,” another nonexistent group which was created by Segretti. 89
4. In addition, using as a model the pamphlet from the “Citizens for
a Liberal Alternative” that had been drafted by Ken Khachigian and
Pat Buchanan in the White House, Segretti had 3,000 pamphlets
printed up with a picture of Senator Humphrey holding a large fish
and the caption, “Humphrey: A fishy smell for the White House?” 90
The objective of the pamphlet was to have the Humphrey people blame
McGovern for this scurrilous and fictitious piece of literature. These
pamphlets Avere distributed in San Francisco, Los Angeles, and in
Orange County.
83 10 Hearings 4284.
84 10 Hearings 4005.
85 10 Hearings 4004 ; see also p. 327 of transcript of United States v. Chapin.
88 10 Hearings 4004.
87 10 Hearings 4004.
88 10 Hearings 4000.
89 10 Hearings 4295.
90 10 Hearings 4299.
173
5. Segretti was also responsible for preparing and mailing a letter
over the forged signature of Barbara Barron, the campaign coordina-
tor of Senator McCarthy’s California campaign, to McCarthy dele-
gates and Chisholm supporters urging them to shift their support to
Senator Humphrey. 91 The letter was printed on “McCarthy 1972”
stationery, and many of the people who received the mailing have al-
ways believed that Barbara Barron was responsible for the letter. In
fact, Barbara Barron had absolutely nothing to do with the mailing
since it was solely a product of Segretti’s fertile imagination.
6. Segretti also sent letters on “Yorty for President” stationery to
local newspapers such as the Los Angeles Free Press. These letters
claimed that the forged letters from Barbara Barron to the McCarthy
delegates and Chisholm supporters were the responsibility of the
Yorty campaign. 92
The Los Angeles F ree Press ran the story that the forged letters had,
in fact, come from the Yorty for President Committee. Thus, the
forged letters, and the subsequent fake letter claiming responsibility
for the initial forgeries were quite successful in sowing dissension
among the California Democrats.
According to Frank Mankiewicz, these examples of false literature
distributed in the campaign had a serious impact on the Democratic
candidates themselves. He testified :
We [the McGovern campaign and the Humphrey cam-
paign] were no longer opponents; we had become enemies,
and I think largely as a result of this activity. 93
In addition, Senator Muskie and his staff blamed the false and
scurrilous literature on both Senator McGovern and his supporters
as well as Senator Humphrey’s campaign. 94 The false literature exac-
erbated the normal differences among the candidates and helped to
create a deeply divided Democratic Party at the close of the Presiden-
tial primaries.
(ii) False Advertising . — Another deceptive practice engaged in by
Segretti and his agents was the placement of false and misleading
advertising for or against Democratic candidates on the radio and in
local newspapers.
Florida: In Miami, Doug Kelly placed an ad on a local radio station
which said that Senator Muskie believed in the right of self-determi-
nation for all people, and therefore, supported the Castro govern-
ment in Cuba. The ad was ostensibly purchased by the Muskie
campaign organization, and was designed by Kelly to alienate the
Cuban voters from Senator Muskie. 9,5
A similar ad was placed in the local Cuban-American newspaper
Replica, which stated that Muskie believed that the United States
should not interfere with the Castro government of Cuba. 96 Again, the
ad purported to be from Senator Muskie’s campaign, and was designed
to alienate Cuban-American supporters.
A number of classified ads were placed in various Miami newspapers
which drew attention to Muskie’s statement that he did not think the
American people were ready for a black Vice Presidential candidate. 97
91 10 Hearings 4296.
92 10 Hearings 4301.
93 11 Hearings 4614.
94 11 Hearings 4659, 4663-64.
95 11 Hearings 4379.
*> ibid.
97 10 Hearings 4271 .
174
While these small ads could hardly influence very many voters, the
ads could create some division and bad feelings among the Democrats
after the primary was over if Senator Muskie’s campaign thought
the ads were placed by other Democratic contenders.
Illinois: In Chicago, Tom Visney placed an anti-Muskie ad in the
newspaper as well as on some of the radio stations. 98 These ads sup-
ported Senator McCarthy’s candidacy, and stated that Senator Muskie
had neither the emotional stability nor the experience to hold the of-
fice of the Presidency. In none of these ads was it stated that they had
been paid for and created by agents of the White House.
Democratic Convention: In May or June, Segretti and Doug Kelly
ordered an airplane to fly over the Democratic Convention with a
trailer which stated, “Peace, Pot, Promiscuity. Vote McGovern.” Kelly
was not sure if in fact the plane flew over the convention. 99 Someone
later told him that they had seen a plane with a wierd message flying
over the Democratic convention. 1
(Hi) Pickets . — One of the main tenets of advice given to Segretti
by Dwight Chapin was to have pickets appear at campaign appear-
ances by other Democratic candidates in order to take advantage of
the media coverage of the event. 2 Therefore, much of Segretti’s activ-
ity involved organizing pickets at the appearances of the Democratic
primary contenders.
Even prior to the primaries, in early November 1971, Segretti paid
a friend of his from Turlock, Calif., to arrange for a group of pickets
with signs saying, “Kennedy for President” to appear in front of a
San Francisco hotel where both Senators Muskie and Humphrey were
appearing at a Democratic dinner. 3
Segretti also attempted to arrange for pickets to appear at an
appearance by Senator Muskie at Whittier College that same month. 4
Unknown to Segretti, Roger Greaves (Sedan Chair I) had also been
directed by Bart Porter and Jeb Magruder to have pickets present
with anti-Muskie signs. The appearance must have been an important
one, since Segretti was given the same directions by Dwight Chapin
at the White House.
Florida: Segretti’s most successful picketing operation was run by
Robert Benz in the Tampa area during the Florida primary campaign.
Benz recruited Kip Edwards, A1 Reese, George Hearing, and an indi-
vidual identified only as “Duke” to organize pickets against Senators
Muskie and Jackson in the Tampa area. The logistics of the picketing
was greatly aided by the information being provided to Benz by
Frohlich from the Jackson campaign and Grifiin from the Muskie
campaign.
Many of these picketing activities were successful in getting media
coverage and in provoking dissension among the Democratic candi-
dates. These activities included :
1. Benz learned that Senator Jackson was to appear for the open-
ing of his Tampa headquarters in January 1972. As a result, he hired
a Mr. Yancy and Kip Edwards to stand across the street from the
M Segretti witness summary, p. 11.
M 11 Hearings 4384.
* Ibid.
* See p. 161, supra.
* 10 Hearings 3981.
*7Mi.
175
headquarters with signs saying, “Believe in Muskie.” 5 Segretti was
present to observe this particular demonstration, as were some news
photographers who took a picture of Senator Jackson walking across
the street to offer the two picketers a glass of orange juice. This pho-
tograph was reprinted widely in Florida newspapers. 6
2. Benz also received the schedule of the Muskie campaign train
as it traveled down through Florida. He arranged for pickets to ap-
pear at the Winter Haven stop with signs saying “Wallace Country.”
George Hearing, Kip Edwards, and the individual known as “Duke”
showed up to picket this appearance. Benz believed that “Duke” was
a member of the Nazi Party and was told that he was a former SS
officer in Hitler’s storm troopers. 7
In addition, Benz and Hearing discussed the possibility of disrupt-
ing Senator Muskie’s train schedule by furnishing false information
to his headquarters as well as to the public. 8
3. Benz also arranged for pickets to appear at another Muskie ap-
pearance at the University of Southern Florida. There they distrib-
uted derogatory newspaper reprints concerning Muskie. 9
4. Benz organized a number of other pickets at Muskie appearances
in Tampa. On one occasion, he arranged for the picketing of a Muskie
rally by blacks carrying “racially related placards” which criticized
Muskie’s statements about not having a black Vice Presidential can-
didate. 10
5. On one occasion, Doug Kelly gave a female college student from
the University of Florida $20 in cash to run naked in front of Muskie’s
hotel in Gainesville, screaming, “Senator Muskie, I love you.” 11 Kelly
testified that the incident was reported in the Gainesville papers.
6. Senator Muskie had a press conference in Miami at the Four
Ambassadors Hotel shortly before the Florida primary. Kelly re-
cruited some Cubans to picket the press conference with signs say-
ing, “Muskie go home,” and “We want a free Cuba.” 12
In addition, Kelly gave the picketers Humphrey buttons to wear.
One of Senator Muskie’s aides asked Kelly about the identity of the
picketers. Kelly explained to him “confidentially” that the picketers
were really working for Senator Jackson. 13
This example is a good case of how political “pranks” can be used
both to identify a candidate with a controversial issue and to foster
dissension among the Democratic candidates themselves.
California: In California, Segretti contacted many people to picket
fundraising dinners by Democratic candidates as well as distribute
false literature. For example, Segretti hired an individual named
Jim Popovich, who told Segretti that he would put together a “flying
squad” of about ten individuals who would be available to picket any
local appearances by Senator Muskie. Segretti thought the idea a
good one and paid Popovich about $130 before discovering that Pop-
ovich was not producing as many pickets for these appearances as he
had claimed. 14
5 11 Hearings 4409.
* Ibid.
7 11 Hearings 4426. ,
8 11 Hearings 4409. Some false ads about the train’s schedule were published, but there is
no evidence at present linking those to Benz or Segretti.
9 11 Hearings 4410.
10 11 Hearings 4408.
11 11 Hearings 4399.
12 11 Hearings 4382.
1S 11 H earings 4383.
l 4 See Segretti witness summary ; breakdown of payments to operatives.
176
Pennsylvania: In Pennsylvania, Segretti recruited Skip Zimmer
and Bob Nieley to pass out literature at Muskie campaign appearances
and to organize pickets for Muskie rallies. 15 Zimmer sent Segretti
clippings from local newspapers after Muskie’s appearances where
Muskie was heckled and picketed to verify that the activity occurred. 16
Exhibits in the Committee record indicate that Zimmer recruited
people to stand at Muskie rallies with signs saying such things as
“M-U-S-K-I-E spells Loser” and “HHH is the Man.” Posters also
drew attention to Muskie’s probusing stand and pointed out that he
allegedly sent his children to private schools. 17 As Zimmer described
these efforts in a note to Segretti, “Though press was disappointing
... we did grandly piss off his staff and rattle him considerably.” 18
Segretti also stated that Zimmer allegedly arranged for pickets to
appear at Muskie rallies and pose with signs saying, “Gays for
Muskie.” 19
Hecklers were also organized by Zimmer and Nieley during the
Pennsylvania primary according to Segretti. 20 Some hecklers ap-
peared at one Humphrey speech in Philadelphia. Following the
heckling Segretti said that Zimmer called Humphrey headquarters
to tell them that Muskie had hired the hecklers for $100 apiece. 21
As noted earlier, Segretti also had Robert Benz fly to Pittsburgh
to recruit agents to picket Muskie’s campaign appearances. Benz was
not as successful there as he had been in Tampa. 22
Planned Convention Activity: As discussed earlier, 23 Segretti’s
recruiting of pickets for campaign appearances of Democratic can-
didates was supposed to reach its high point at the Democratic con-
vention in Miami during July, 1972. Howard Hunt directed Segretti
to set up a demonstration which would subsequently become violent
and would be blamed on the McGovern campaign! The Watergate
break-in, however, put an end to these plans.
(iv) Other Disruptions. — False Orders for Food , Flowers , and
Beverages. — On primary day in Florida, Segretti and Kelly placed
orders on behalf of the Muskie campaign for flowers, chicken, pizzas,
and about $300-$400 of liquor. 24
Three weeks later, on the day of the Wisconsin primary, Segretti
and Benz again ordered flowers, chicken and pizzas to be sent to
Senator Muskie’s hotel room, and also ordered two limousines to be
sent to Senator Muskie’s hotel for the use of the Senator. These false'
orders disrupted Senator Muskie’s schedule considerably. 25
Finallv, two weeks later at a Muskie fundraising dinner in Wash-
ington, D.C.. Segretti and Kelly again made numerous false orders
to disrupt the dinner. Kelly and Segretti ordered flowers, liquor,
pizzas and other items for the banquet, charging them to the Muskie
campaign committee. In addition, Kelly and Segretti invited six
African ambassadors and their guests to attend the Muskie fund-
15 10 Hearings 3998.
16 10 Hearings 4289.
17 10 Hearings 4291.
15 10 Hearings 4292.
10 See Sepretti witness summary, p. 12.
20 Nieley denies havinp done this. Nieley testified that he merely collected literature and
sent it on to Sepretti (Nieley interview).
21 Sepretti witness summary, p. 12.
22 Benz witness summary, p. 3.
23 See p. 166, supra.
u 11 Hearings 4382.
85 Benz witness summary, p. 3.
177
raising dinner and made arrangements for them to be picked up by
limousines which were to be charged to Senator Muskie’s campaign.
These activities disrupted this last major fundraising effort by Sen-
ator Muskie by diverting staff attention and resources, especially when
Segretti and Kelly kept calling the limousine drivers to return to the
Muskie dinner in order to be paid by the campaign. The net effect of
their activities was to create a very embarrassing situation for the
Muskie organization.
Stink bombs: On at least four separate occasions in the Florida pri-
mary, stink bombs were used to disrupt or harass the Muskie campaign.
The stink bomb was first concocted by a chemist friend of Doug
Kelly. The name of the chemical substance which he produced was
butyl percaptain, a foul-smelling substance which was not physically
harmful but was very noxious . 20
Shortly before the Florida primary. Senator Muskie had a campaign
picnic scheduled in the Miami area. Kelly and Segretti took the chem-
ical substance, put it in a coke bottle, and sealed it with wax. The
bottle was taken to the picnic by Kelly and Segretti and dropped on
the ground, releasing the chemical substance to foul the air. After the
stink bomb had been dropped, Kelly said that “everybody thought
that the food was bad. So it kind of made the picnic a bad affair .” 27
Following the Muskie picnic, Segretti traveled north to Tampa with
three vials of butyl percaptain. Segretti gave these vials to Bob Benz,
with the instructions that they should be placed in Senator Muskie’s
headquarters.
One of the vials was taken to a Muskie campaign picnic in the
Tampa area and emptied at the grounds there . 28 The other two vials
were given to George Hearing by Benz with instructions to place them
in the two Tampa headquarters of Senator Muskie on the evening
before the primary. According to Benz, Hearing placed one of the
stink bombs in the offices housing the telephone bank operation of
Senator Muskie, and the other in the Tampa Muskie headquarters,
Benz said that Hearing told him that at one location the material was
dropped through a “hole in the window,'’ and at the other location
the window was open and the stink bomb was tossed in . 29 Segretti
testified that he was told by Benz that a screen was pried open and
a window lifted in order to place the stink bomb in the Muskie cam-
paign headquarters . 30
The placing of these stink bombs in the Muskie campaign headquar-
ters on the evening prior to the Florida primary disrupted, confused,
and unnecessarily interfered with a campaign for the office of the
Presidency.
Other disruptions: A few days before the Florida primary,
Senator Muskie held a press conference at the Four Ambassadors
Hotel. Doug Kelly walked into the Muskie press conference with a long
overcoat on, and dropped two white mice with blue ribbons on their
tails which said, “Muskie is a Rat Fink.” Kelly also released a small
finch which went flying around the room of the press conference and
caused a great deal of commotion and disruption to Senator Muskie’s
press conference . 31
M 11 Hearings 4382.
» Ibid.
ss 11 Hearings 4412.
» m< i.
50 10 Hearings 3398.
® 11 Hearings 4382.
•J5'-687 0 -74-14
178
Kelly also had advance notice of Muskie’s schedule in Florida. As
a result, Kelly would often call the individuals who were on Senator
Muskie’s schedule and change the hour of the appointment to some
other time, or even cancel the appointment. Needless to say, this tactic
greatly disconcerted both Senator Muskie and the press. 32
Both Kelly and Benz made a practice of placing other Democratic
candidates’ stickers on the posters and literature of other Democrats.
This practice was designed to foster divisions and bad feelings among
the Democratic candidates.
Kelly also attempted to tie up the phone banks of the Muskie cam-
paign on the day of the Florida primary by dialing the telephone
numbers of the Muskie phone bank operation from pay telephones.
Kelly would then leave the telephone off the hook as soon as the call
was answered at the Muskie campaign. He then left the phone booth
and placed an “out of order” sign on the outside to insure that the
line would be tied up all day. 33 The method, however, didn’t work
because of the automatic cutoff from the phone company.
c. Segretti Coverup
Segretti was first contacted by the FBI shortly after the Watergate
break-in, when his name and phone number showed up on Howard
Hunt’s telephone records. Segretti immediately called Dwight Chapin
at the White House to request his assistance in getting legal counsel.
Chapin, after consulting with Gordon Strachan at the White House,
told Segretti to return to Washington, D.C., immediately. 84 Mean-
while Strachan called John Dean and explained that the FBI had
called a friend of his named Donald Segretti, and wanted to interview
him in connection with the break-in at the DNC. 35
Strachan requested that Dean meet with Segretti. A meeting was
arranged for the morning of Saturday, June 24, 1972, among Segretti,
Strachan, and Dean 36 in the lobby of the Mayflower Hotel. Following
a short discussion of Segretti’s general activities, Dean told Segretti
to come to Dean’s office in the White House the following day for more
detailed discussion. 37
Segretti went to the Executive Office Building the next day, and out-
lined in detail to Dean his relationship with E. Howard Hunt. 38 Dean
told Segretti not to worry about the upcoming interview since the FBI
had picked his name up on Hunt’s phone records. In addition, Dean
instructed Segretti not to divulge the names of Chapin, Strachan, or
Kalmbach to the FBI unless the FBI felt it was absolutely necessary
to have the names. 39
Segretti left Washington and returned to California where he was
interviewed by the FBI agents. The interview focused on Segretti’s
contacts with E. Howard Hunt, and he was not forced to divulge any
of the names about which he had been concerned. 40 Segretti telephoned
John Dean after the interview to tell him that he had not been forced
to reveal any of the sensitive names.
33 11 Hearings 4383.
33 11 Hearings 4382.
34 Segretti witness summary, p. 14.
33 3 Hearings 962.
33 Segretti witness summary, p. 14 ; 3 Hearings 962.
37 Segretti witness summary, p. 14 ; 3 Hearings 963.
33 3 Hearings 963.
33 3 Hearings 963 ; Segretti witness summary, p. 14.
40 Segretti witness summary, p. 14.
179
In August 1972, Segretti was notified that he was being subpenaed
to appear before the grand jury investigating the Watergate break-in
in Washington. Because of his concern about testifying before the
grand jury, Segretti tried to contact his friends at the White House
as well as local legal counsel.
Segretti finally reached Dwight Chapin at the Republican Conven-
tion. Chapin called Dean, who was also at the convention, to explain
that Segretti was quite concerned about being called before the Federal
grand jury. 41 Dean said that he would be happy to meet with Segretti in
Florida, since it was impossible for him to go to Washington at that
time.
After Dean talked to Chapin, he called Assistant Attorney General
Henry Petersen at the Department of Justice and explained the sensi-
tive problem that was confronting Segretti. Dean said he told Petersen
that Segretti had no involvement in the Watergate incident, but that
he met with Hunt in connection with some campaign activities that he
had been performing for the White House. Dean testified he also ex-
plained to Petersen that Segretti was being paid by Kalmbach, and
that he had been recruited by Chapin and Strachan. Dean Said he
stressed that if these facts were revealed they would be quite embarras-
sing and would cause political problems during the last weeks of the
election. According to Dean, Peterson replied that he understood the
problem and would see what he could do. 42 Dean later spoke to Petersen
again, and Dean testified that Petersen explained that he did not
believe it would be necessary for the prosecutors to get into the spe-
cific a reas of concern to Dean when Segretti appeared.
Petersen recalls that the question of going into the “dirty tricks”
of Segretti was also raised by Earl Silbert, who said that there did
not appear to be a violation of the Corrupt Practices Act. The ques-
tion was raised again by Charley Bowles, head of the accounting
and fraud section of the FBI. who asked Petersen if there was any
violation of Federal election law by Segretti. Petersen replied that
he knew of none. 43
Petersen directed Silbert not to probe the relationships between
Segretti and Kalmbach, Chapin, and Strachan because he “didn’t
want him getting into the relationships between the President and his
lawyer or the fact that the President’s lawyer might be involved in
somewhat, I thought, illegitimate campaign activities on behalf of the
President.” 44
Segretti flew to Florida a few days prior to his appearance before
the grand jury. He met with John Dean briefly on the Saturday morn-
ing preceding the opening of the Republication National Convention. 45
Dean explained to Segretti that he did not believe the Government
was particularly interested in pursuing the names of Strachan, Chapin,
and Kalmbach in connection with Segretti’s activities, and that he
doubted that Segretti would be asked any questions in these 'areas.
Dean advised Segretti. however, that if he were asked any questions
about his “dirty tricks” activities, he should answer every question
truthfully, and if pressed, Dean advised Segretti to lay out the “whole
ball of wax.” 46 Segretti recalled that Dean was most concerned about
41 3 Hearings 963.
42 3 Hearings 964.
43 9 Hearings 3620,
44 9 Hearings 3621.
45 3 Hearings 964.
**3 Hearings 964 ; Segretti witness summary, p. 15.
180
Kalmbach’s name being brought up, but that Dean mentioned that he
might be able to put certain parameters on the grand jury examina-
tion through Henry Petersen. 47
Segretti then traveled to Washington for his grand jury appearance.
Prior to testifying, Segretti was interviewed by Earl Silbert and Don
Campell in the U.S. attorney’s office. During the interview, he re-
called that he was asked if he were getting paid by a “Mr. K.” 48
However, once Segretti went before the grand jury, Segretti testified
that Silbert did not get into that area of questioning. Segretti testi-
fied that a woman juror finally asked him who was paying him, and
that he then testified that he was paid by Kalmbach and was hired
by Chapin and Strachan.
Earl Silbert has filed an affidavit with the committee denying that
the original Watergate prosecutors limited their questioning of Se-
gretti in order to conceal the involvement of Chapin, Strachan, and
Kalmbach. Silbert said that since Segretti’s last payment was in
March 1972, prior to the effective date of the Federal Election Cam-
paign Act of 1971, “it foreclosed the possibility of a violation of this
act.” 49 Silbert also denied that he or Donald Campbell ever referred
to Herbert Kalmbach as “Mr. K”. 50 In his affidavit, Silbert explained
more fully his questioning of Segretti :
Because none of his non- Watergate activity appeared to
involve criminal violations and because the grand jury was
investigating only Watergate, we did not examine Mr. Se-
gretti at length about his political spying activities before the
grand jury. However, we immediately requested the FBI to
interview Messrs. Chapin and Strachan of the White House
staff, who Mr. Segretti had informed ns had recruited him,
and Mr. Kalmbach in California. The reports of these inter-
views were sent to the Special Election Law Unit in the
Department of Justice. The possible inference drawn by some
that we did not explore Mr. Segretti’s spying activities before
the grand jury because we wanted to conceal any involvement
of Messrs. Kalmbach, Chapin, and Strachan is nonsense. * * *
We did not because it did not relate to the break-in and the
bugging. 51
Following his grand jury testimony Segretti called John Dean to
explain that the names of Chapin, Strachan, and Kalmbach had
been revealed by questioning from one of the grand jurors. 52 Fol-
lowing his grand jury appearance, the FBI scheduled interviews with
Chapin, Strachan, and Kalmbach. Dean had responsibility for pre-
paring both Chapin and Strachan for their FBI interviews. Dean
recalled that Strachan stated on one occasion in the presence of
Richard Moore and Dean that he would perjure himself to prevent
Haldeman from becoming involved in the matter. 53 Strachan testified
that the discussion with Moore and Dean concerned a reply to a
press story in which Strachan offered to take responsibility for
approving the hiring of Donald Segretti instead of Mr. Haldeman. 54
47 Segretti witness summary, p. 15.
18 Ibid.
48 See Silbert affidavit, 25 Bearings 12405.
»> Ibid.
61 Ibid.
“ 3 Hearings 964 ; Segretti witness summary, p. 15.
63 3 Hearings 964.
64 6 Hearings 2488.
181
After his grand jury appearance, Segretti’s next contact concern-
ing his activities in the reelection campaign was in the middle of
September when he was contacted by Carl Bernstein and later, by
Robert Meyers of the Washington Post who called to ask about his
activities. After receiving these calls, Segretti contacted Larry Young
again for legal advice and also telephoned Dwight Chapin. Both
Chapin and Dean advised Segretti to keep a low profile, and Dean
asked Segretti to call and check in periodically. 55
On October 10, 1972, the Washington Post published the first alle-
gations that Donald Segretti had organized a massive campaign of
“political spying and sabotage conducted on behalf of President
Nixon’s reelection and directed by officials at the White House and
the Committee for the Reelection of the President.” 56 Segretti recalls
being called by John Dean prior to the publication of the article,
when Dean told Segretti of the forthcoming article. Dean said he was
in Florida and that he was going to fly to Washington to meet Segretti
as soon as possible to discuss the allegations in the article. 57
Segretti immediately flew to Washington, D.C., and called Fred
Fielding, Dean’s assistant, after checking in at a motel near the air-
port. Segretti was subsequently directed by Dean or Fielding to leave
the motel, since he was registered under his real name, and to take a
taxi to within a block of the Executive Office Building where Field-
ing met him to take him into the Executive Office Building. 59
Segretti testified that he did not sign in on the entrance logs to the
Executive Office Building, since Fielding explained to the guard that
“this was the individual who lost his wallet,” or something similar. 60
Segretti met with Fielding and Dean for about an hour, and they
discussed the allegations contained in the Washington Post article.
Dean read the article to Segretti line by line and they discussed the
truth or falsity of each of the charges. 61 At the end of the meeting
there was a brief discussion about Segretti writing a statement to
be released publicly on the following day. After the meeting, Segretti
said that Dean and Fielding drove him to a motel near Crystal City
where he registered under an assumed name.
Segretti wrote out a brief statement the following morning for
possible release by the White House. 62 Segretti testified that Fielding
came by his motel room at about 10 a.m. with a statement prepared
by people in the White House that denied most of the allegations in
the Post. Segretti said he read over Fielding’s statement and made
some corrections on it, since Fielding indicated they were under some
time pressure to get the statement out.
Later on that same day, Segretti was contacted again by Dean who
explained that the media people in the White House had decided that
the story would die by itself and that there should be no further
statement made by the White House at that time. 63
Segretti’s proposed press statement was discussed in a meeting at
Dwight Chapin’s office that day attended by Ron Ziegler, John
Ehrlichman, Dwight Chapin, John Dean, Gordon Strachan, and
53 Segretti witness summary, p. 15.
“ Washington Post, Oct. 10, 1972, p. A-l, col. 1.
67 10 Hearings 4034.
59 10 Hearings 4035.
80 Ibid.
61 10 Hearings 4042.
82 10 Hearings 4043,
83 Ibid .
182
later by Fielding after he had received a draft copy of Segretti’s
proposed press statement. At that meeting it was decided that Segretti
should not issue his statement. 64 Following the meeting Dean testified
that Ehrlichman directed him to advise Segretti to go incognito and
hide from the press to avoid further stories until after the election. 65
When Dean talked to Segretti later that afternoon, Dean mentioned
how “nice the Greek Islands were at that time of the year.” 66 There
was also some discussion about how Segretti should travel back to
the west coast. Segretti recalled that Dean told him that it would be
a great idea to take a train across the country. 67 Segretti, following
Dean’s suggestion, then took trains from Washington, D.C. to Phila-
delphia, from Philadelphia to Chicago, from Chicago to Houston, and
from Houston to Nevada. During his travels, Segretti would periodi-
cally check in with Dean to learn the latest developments and revela-
tions emerging from the White House and the campaign. 68 Sometime
during this same period, Segretti also called Doug Kelly and Robert
Benz, his two major operatives in Florida, to inform them of his real
identity so they would be prepared for the coming publicity. 69
Following the election, Dean was asked by Haldeman and Ehrlich-
man to meet with Segretti to determine the extent of the involvement
that Chapin and Strachan had with him. 70 Soon thereafter, Dean met
with Segretti in Palm Springs, Calif., at the El Dorado Hotel, where
Segretti had been staying for the week prior to the election. 71
Dean taped his interview with Segretti, with the understanding that
the material was privileged and would never be released. 72 Segretti
later claimed that the tape should not be disclosed because it was privi-
leged by the attorney-client relationship. 73 However, the committee
directed Segretti to answer questions concerning his conversations with
John Dean since the facts did not support a bona fide “attorney-client
privilege.” 74
Dean testified that his visit to Palm Springs was interrupted by a
request on November 11 from Tod Hullin that Dean go to Florida to
meet with Ehrlichman and Haldeman, who were there with the Presi-
dent, to report on Dean’s interview with Segretti. 75
Dean flew to Florida immediately, and met with Haldeman and
Ehrlichman on about November 12. At that meeting, Dean played the
tape of the interview that he had with Segretti. While Dean was dis-
cussing the matter with Ehrlichman and Haldeman, Dean recalled
that President Nixon requested that Haldeman meet with him in his
office. Dean recalled that Haldeman sent a message back to the Presi-
dent that he was meeting with John Dean and that he would be over
shortly to report to the President on the results of his meeting. 76
On about November 15, 1972, Dean testified that he met with Halde-
man and Ehrlichman at Camp David. During the first part of the
84 3 Hearings 965 ; see also 6 Hearings 2488.
85 3 Hearings 965.
88 10 Hearings 4043.
87 Segretti witness summary, p. 16.
88 Segretti witness summary, p. 16 ; 3 Hearings 965.
69 Segretti witness summary, p. 16.
70 3 Hearings 965.
Tbid.
72 3 Hearings 966.
73 Segretti witness summary, p. 16.
74 10 Hearings 4042.
75 3 Hearings 966.
78 Ibid.
183
meeting, the subject of Chapin remaining at the White House arose.
Dean said he learned at that time that the President had decided that
Chapin would have to leave the White House staff as a result of the
information that had been given to Haldeman and Ehrlichman in
Florida. 77
Other officials in the White House, including Richard Moore, felt
that the President should merely issue a letter of censure to Chapin
and leave the matter alone. Dean raised this suggestion with Halde-
man and Ehrlichman, but Ehrlichman felt it was not possible to
raise the matter again with the President.™ Dean then was given the
task of telling Chapin that he had to leave the White House. 79
Meanwhile, Dean was directed by Ehrlichman to get a job for
Segretti, and so he relayed this request to Herb Kalmbach. 80 Kalmbach
apparently found a job for Segretti which paid about $30,000 a year
at the Holiday Inn in Montego Bay, Jamaica, in a legal-public rela-
tions capacity. 81 Segretti said he was quite interested by the prospect
of this high-paying job, but testified that since his mother was sick,
and since he received a subpena from the Senate Judiciary Subcom-
mittee on Administrative Practices and Procedures at about this same
time, he decided not to take the job. 82 Dean also discovered that the
owner of the Holiday Inn where Segretti was going to work was a
friend of President Nixon, and so Dean said he instructed Segretti
not to take the job. 88
At about this time, Dean spoke with Paul O’Brien, counsel for CRP,
about possible west coast counsel for Segretti. O’Brien recommended
Gordon Hampton, an old friend of his from Los Angeles. 84
Segretti met with Hampton and wrote out in longhand all the
details of his activities during the previous year. Hampton subse-
quently gave this statement, as well as Segretti’s phone bills, address
cards, and account book to Paul O’Brien to transmit to John Dean
on December 8, 1972. 85 Hampton said he sent this material to Dean
even though Dean had never requested it because he felt that Dean
was acting as co-counsel on the case. 86 These materials were sub-
sequently turned over to the Select Committee by John Dean pur-
suant to a subpena duces tecum.
After Segretti was subpenaed by the Senate Subcommittee on
Administrative Practices and Procedures, he retained John Pollock,
a Los Angeles trial attorney. 87 Pollock said that Hampton told him
that Pollock’s name had been “submitted to or screened by or approved
by the White House.” 88 During the period that Hampton and Pollock
represented Segretti, O’Brien kept in touch with them and reported all
of their activities to John Dean. 89 There is no evidence that Hampton or
Pollock received any directions from third parties on how to represent
their client, Donald Segretti.
77 ma.
78 Ibid.
‘ 79 John Dean interview, Sept. 10, 1973, p. 8.
80 Id. at p. 4.
81 Segretti witness summary, p. 17.
82 Ibid.
83 Interview with John Dean. Sept. 10, 1973, p. 4.
84 O'Brien interview, Sept. 1973, p. 2.
86 Hampton interview, Sept. 1, 1973, p. 4.
88 Id. at p. 6.
87 Pollock Interview, Aug. 28, 1973, p. 2.
88 Id. at p. 3; Hampton denied that he ever told Pollock that he had been cleared by
anyone in the White House (Hampton interview).
89 Interviews with Dean, O’Brien, Hampton, and Pollock.
184
d . White House Press Response
On October 10, 1972, the Washington Post published the first allega-
tion that the Watergate bugging incident stemmed “from a massive
campaign of political spying and sabotage conducted on behalf of
President Nixon’s reelection and directed by officials at the White
House and the Committee for the Re-Election of the President.” 90 In
addition, the Post alleged that Donald Segretti traveled around the
country recruiting agents to sabotage opposing campaigns and to
gather intelligence information on opponents. These revelations by the
Washington Post initiated a concerted and organized effort by the
White House and the Committee To Re-Elect the President to deceive,
mislead, and misinform both the public and the press as to the activities
of Donald Segretti and his agents.
First, as described above, Segretti was immediately called back to
Washington, and then instructed to “lay low” until after the election in
November. In the daily press briefing at the White House on Octo-
ber 10, following the publication of the story about Segretti in the
Washington Post, White House Press Secretary Ron Ziegler refused
to provide any details or further information at all to press inquiries
concerning the Segretti matter and other information revealed by the
Washington Post. 91
On October 13, 1972, the White House press office was contacted
by Bob Woodward and Carl Bernstein of the Washington Post who
said that they would report on Sunday that Dwight Chapin was a
White House contact for Donald Segretti, that Segretti was paid a
$20,000 annual salary from a “trust account in a lawyer’s name * * *
a high-placed friend of the President,” that Segretti received some
assignments from E. Howard Hunt, and that Segretti reported fre-
quently to Chapin on the progress of the sabotage activities. Despite
the fact that Segretti had flown to Washington, D.C., on October 10,
to explain exactly what he had done, and despite the knowledge of
Strachan and Chapin about the details of Segretti’s hiring, the White
House issued the following statement,:
Statement by Dwight Chapin
As the Washington Post reporter has described it, the
story is based entirely on hearsay and is fundamentally
inaccurate.
For example, I do not know, have never met, seen, or talked
to E. Howard Hunt. I have known Donald Segretti since
college days but I did not meet with him in Florida as the
story suggests and I certainly have never discussed with him
any phase of the grand jury proceedings in the Watergate
case.
Beyond that I don’t propose to have any further
comment. 92
After the Post published the story on October 15, 1972, a meet-
ing was held in the Roosevelt Room of the White House among Ehr-
lichman, Ziegler, Buchanan, Richard Moore, Dwight Chapin, and John
" Washington Post, Oct. 10, 1972, p. Al.
« nut.
" 3 Bearing* 1209.
185
Dean. The purpose of this meeting was to prepare Ziegler for his press
briefing the following day with reference to the Segretti stories in the
paper. A secretary was present during the meeting and recorded much
of the hypothetical questioning and answering of Mr. Ziegler by those
present,. 93
The instructions given to Ziegler on October 15, 1972, and through-
out the rest of the Presidential campaign were designed to withhold
information from the public about Segretti’s activities so that
the President’s chances for reelection would not be affected. Ziegler’s
basic response was, “Gentlemen, I have nothing to add to what
Chapin has already said on the subject,” 94 J udging from what Chapin
had already said on the subject, Ziegler’s response to such press in-
quiries was hardly forthcoming.
Notes from the meeting indicate that it was known October 15 that
Herbert Kalmbacli paid Segretti for his expenses and salary during
his employment, 95 And yet when the White House was informed by
the Washington Post on October 15, 1972, that a story stating that
Kalmbaeh had authorized payments to Donald Segritti would appear
the following day, the White House had no comment. 96
At the 8 :15 a.m. meeting in the White House, on Monday, October
16, 1972, it was decided that Ron Ziegler, RNC Chairman Robert Dole,
and Clark MacGregor should all make statements attacking the Post’s
stories of the previous days, Ziegler characterized the charges in the
Washington Post as “malicious,” and stated that he would neither dis-
cuss nor deny the charges because to do so would “dignify” them. 97
During the day, MacGregor was advised that both Ziegler and Dole
had made strong statements, and so he thought there was no longer
a need for him to make a statement. However, MacGregor testified
that John Ehrlichman called him and asked him to read a statement
that had been prepared. 88 MacGregor testified that he did not know
the author of the statement, and that he opposed merely reading the
statement to the press and then refusing to answer any questions.
MacGregor also testified that he had no knowledge that the CRP or
the White House were supporting any type of political espionage.
However, MacGregor had talked to Dwight Chapin prior to his press
conference on October 16, and had been informed that Segretti had
been hired by Chapin to perform pranks during the campaign. 88
Nevertheless, MacGregor read the prepared statement on the after-
noon of October 16, 1972, which said, in part :
Using innuendo, third-person hearsay, unsubstantiated
charges, anonymous sources, huge scare headlines — the Post
has maliciously sought to give the appearance of a direct
connection between the White House and the Watergate — a
charge which the Post knows — and half a dozen investiga-
tions have found — to be false.
The hallmark of the Post’s campaign is hyprocrisy — and
its celebrated “double standard” is today visible for all to
see * * *.
03 #ee 3 Hearings 1200 for a copy of the notes.
04 3 Hearings 1202.
05 3 Hearings 1200.
90 Washington Post, Oct. 16, 1972, p. Al.
97 New York Times, Oct. 17, 1972, p. 28.
08 12 Hearings 4903.
89 12 Hearings 4905.
186
It is said that this is a dirty campaign, but all the dirt is
being thrown by only one side. The mudslinging, the name
calling, the unsubstantiated charges, the innuendoes, the guilt
by association, the character assassination, the second-hand
hearsay are all tactics exclusively employed by the McGovem-
ites and their apologists. President Nixon will remain on the
high road, discussing issues of real concern to the American
people in a fair, forthright, and hardhitting manner * * *.*
On October 25, 1972, the Washington Post reported that H. R.
Haldeman was one of five individuals who had authority to approve
payments from a secret cash fund during the 1972 campaign. While
this article did not relate specifically to Segretti, it was published in
the same time frame as the earlier Segretti articles. Again, the White
House issued only a terse statement to the Post which said: “Your
inquiry is based on misinformation because the reference to Bob
Haldeman is untrue.” Neither Haldeman nor Gerald L. Warren,
Deputy White House Press Secretary, would elaborate any further on
the story. 2 Once again, Ron Ziegler labeled the story “untrue” and
accused the Washington Post of “shabby journalism” and “a blatant
effort at character assassination.” Clark MacGregor joined Ron Ziegler
in issuing a flat, official denial of the Washington Post story. 3 Subse-
quent testimony before this committee revealed that Haldeman au-
thorized the hiring of Segretti and authorized payments from the
cash fund kept by Herbert W. Kalmbach. 4
On November 1, Dwight Chapin drafted a proposed statement to be
released by the White House which briefly related some details of the
hiring of Segretti. Four days later, Chapin drafted a memorandum
for John Dean which was marked “eyes only.” This memo was
entitled “Chronology of Activity,” and outlined for Dean some of the
facts concerning Segretti’s hiring by Chapin and Strachan. The pur-
pose of the operation, according to Chapin was that :
* * * we were after information as to the schedules of
candidates, people who could infiltrate headquarters, could
ask embarrassing questions and could organize counter dem-
onstrations to those we expected our opposition to come forth
with during the campaign. 5
The memo also noted that in January or February 1972, after Gor-
don Liddy reported to Gordon Strachan that there was an unidenti-
fied agent in the field who was causing some problems for the CRP,
“Strachan checked two people ( and )
and then Don was advised to report to Liddy.” 6 The two individuals
whose names were left blank were Haldeman and Mitchell.
Following the election, Dean testified that Haldeman asked him to
write a report for public release that would include full disclosure of
the Segretti matter. 7 Taking the information provided by Chapin,
Segretti, and others, Dean drafted a series of carefully worded affida-
1 12 Rearing s 5019-20.
1 Washington Post, Oct. 25, 1972, p. Al.
* New York Times, Oct. 26, 1972, p. 32.
1 7 Hearings 2877.
5 See exhibit No. 31 in U.S. v. Chapin.
« Ihid.
1 3 Hearings 967.
187
vits for each individual whose name had been mentioned by the press
in relation to political sabotage and espionage activities. Based on the
affidavits, Dean with the help of Richard Moore, wrote a summary
draft report and attached the affidavit*. This report was forwarded
to Haldeman on December 5, 1972. 8
Haldeman gave the report to Ehrlichman, who made some penciled
changes, and then forwarded it to Ron Ziegler. On December 18, a
meeting was held in Ziegler’s office among Ziegler, Haldeman, Dean,
and Moore to discuss whether or not to release the information.
Richard Moore, John Dean, and Dwight Chapin all testified that
Chapin had been in favor from the start of releasing a brief state-
ment whereby Chapin would accept responsibility for the hiring of
Segretti and would apologize for having done so. However, at the
meeting on December 13, Dean’s proposed releases were discussed, and
in the words of Richard Moore, “John Dean’s memos just raised more
questions than they asked [sic]. It was not a complete statement, it
wouldn’t have been a proper one to put out and I think I probably
said * * * it wasn’t justified and it was just shelved.” 9 Dean recalled
that nothing was resolved at the meet ing and that it was the consensus
of the group that the White House should continue to do nothing on
the “general theory that no one would be arrested for what they didn’t
2. OTHER INTELLIGENCE-GATHERING AND DISRUPTION
Although the activities of Segretti and his associates were the most
widespread of the White House and CRP sponsored covert campaign
activities, there were other significant inappropriate activities during
the 1972 campaign. They are summarized below.
a. Ruby /
As noted elsewhere in this report, 11 Senator Muskie was considered
the leading Democratic contender and a potentially significant threat
to President Nixon’s reelection until his setbacks in the spring 1972
primaries. Trying to obtain information on his campaign activities
was a high priority of those planning the reelection campaign. An
early example of a covert operation aimed at Muskie was the “Ruby I”
project, which involved planting someone in the Muskie campaign.
The plan was developed by Jeb Magruder, with the help of Ken
Rietz, beginning in August 1971. 12 Magruder asked Rietz if he could
arrange to plant someone in the Muskie campaign who would be
responsible for obtaining as much information concerning the cam-
paign as possible, including intraoffice memos, speeches, travel sched-
ules, press releases and position papers. According to Rietz, Magruder
8 See 3 Hearings 1210.
9 5 Hearings 2032.
10 3 Hearings 967.
11 See section on Campaign Strategy, p. 158, supra.
12 Rietz interview, Sept. 19, 1973. The idea of planting someone in the Muskie campaign
was first suggested, according to Magruder, by either Mitchell, Haldeman, or Magruder.
Magruder interview, Oct. 1, 1973, p. 10. Mitchell denied making such a suggestion but
admitted receiving information from a plant in Muskie headquarters. Mitchell interview,
June 27, 1973. Haldeman has denied any knowledge of such a political operation. DNC
Deposition, May 22, 1973, p. 21-22.
18 S
assured him that such an operation was legal. Rietz told Magruder
that he would confer with a friend on establishing a workable plan. 13
After this conversation with Magruder, Rietz contacted John Buck-
ley, who was director of the inspection division at the Office of Eco-
nomic Opportunity (OEO) and asked Buckley to help him place a
volunteer m the Muskie headquarters who would channel information
to CRP. Buckley agreed to help. 1 *
In late September 1971, Buckley told Rietz that he had drawn up a
plan, inspired by a newspaper column telling of a free taxi ride of-
fered to Senator Humphrey, 15 to have a cab driver offer his services
to the Muskie organization. Buckley told Rietz he had already secured
a cab driver for the job, and Rietz approved the plan. 16
Buckley had selected Elmer Wyatt, an old acquaintance of his, for
the job. Buckley instructed Wyatt to go to Muskie headquarters and
offer his services as a volunteer. Wyatt understood that he would be
paid, although he and Buckley did not talk finances at their first meet-
ing. Rietz said that Magruder later approved payment of $1,000 per
month. 17 Wyatt went to the Muskie headquarters where he first worked
as a volunteer doing errands such as picking up dry cleaning and mail-
ing campaign literature to other Muskie offices. Eventually, however,
Wyatt was asked to deliver inter-office mail between Muskie’s Senate
office and his campaign headquarters. Wyatt kept Buckley informed
on his progress as a Muskie volunteer, 18 and Buckley in turn reported
to Rietz that Wyatt was established as a volunteer at the Muskie head-
quarters.
From September 1971 until April 1972, Buckley worked with Wyatt
in obtaining and photographing confidential documents from the
Muskie campaign during the time Buckley was working at OEO. In
the early stages, Wyatt would call Buckley before leaving to deliver
documents either to or from Muskie’s Senate office. Wyatt would then
pick up Buckley on a specified comer and, while riding in Wyatt’s
cab, Buckley would review and photograph pertinent documents.
When this operation was completed, the material was delivered to the
Muskie campaign headquarters or Senate office. This procedure of
taking pictures in the back seat was unsatisfactory for Buckley, and
so he rented office space at 1026 17th Street NW. in Washington. Buck-
ley also purchased new equipment which was more effective in photo-
graphing documents. 18 Wyatt obtained press releases, itineraries, inter-
nal memoranda, drafts of speeches and position papers, and brought
them regularly to Buckley’s rented office to be photographed by Buck-
ley during his lunch hour. Buckley testified that no mail was ever
opened. 20
After developing the film, Buckley turned it over to Rietz during
meetings on various corners of Pennsylvania Avenue. 21 Rietz in turn
gave the film to Magruder. 22
In November 1971, Magruder gave Herbert Porter some developed
35-mm film and a viewer and asked him to review the film without
offering any explanation of its origin. Porter stated that Magruder
13 Rietz interview. Sept. 19, 1973.
14 11 Hearings 4438.
16 See Washington Star, Morris Siegal column, Sept. 27, 1971.
19 11 Hearings 4439.
17 Rietz interview, Sept. 19, 1973.
18 Elmer Wyatt interview, Sept. 28, 1973, p. 1.
18 11 Hearings 4441-43.
30 11 Hearings 4443.
» Ibid.
a Rietz interview. Sept. 19, 1973.
189
occasionally asked him for the film and viewer to show them to Mit-
chell. Porter recalled that later Rietz brought the film directly to
Porter at Magruders instructions. Porter’s job was to review the
film and bring anything of interest to Magruders attention. 23
On occasion, Martha Duncan, Porter’s secretary, typed transcripts
based upon the photographed documents for forwarding to Magruder.
At Magruder’s request, Porter testified he also sent copies of the
transcripts to Strachan. 25
In December 1971, Porter sent a transcript of one of the filmed docu-
ments from Muskie headquarters to Magruder. It was a staff memo-
randum from Muskie’s campaign manager suggesting that Muskie,
as chairman of a subcommittee on Government operations, could get
good coverage if he held tax hearings of his committee in California.
Magruder asked Porter to have the transcript retyped on plain bond
stationery and sent to Evans and Novak. Porter did so, Evans and
Novak printed it, and the hearings were never held.”
On another occasion, Porter told Magruder he had a 20-page speech
that Muskie was planning to deliver against the nomination of Wil-
liam Rehnquist to the Supreme Court. According to Porter, Magruder
told him to have a transcript typed from the filmed document because
Mitchell wanted to see it. 27 The floor plan of Muskie’s headquarters
was also obtained through this political intelligence operation. 28
In December 1971, Gordon Liddy began working at the Committee
To Re-Elect the President, and so Magruder instructed Porter to give
the film and viewer to Liddy. 29 At about the same time Howard
Hunt took over Rietz’s job of obtaining the film from Buckley. At
Liddy’s request, 30 Hunt met Buckley on various corners of Pennsyl-
vania Avenue as Rietz had done previously. During these brief meet-
ings, Hunt used the alias Ed Warren, and Buckley used the alias Jack
Kent. Throughout their association Hunt never knew Buckley’s real
name.
Although Hunt was then employed by the Robert R. Mullen Com-
pany, he was also working closely with Gordon Liddy, who was re-
sponsible for the political intelligence-gathering capabilities at
CRP. 31 The code name “Ruby I” evolved as part of the overall “Gem-
stone” plan, and was used primarily by Liddy and Hunt when
referring to Wyatt. They also referred to John Buckley, alias Jack
Kent, as “Fat Jack.” 32
Hunt met with Buckley approximately twelve to fifteen times.
Buckley turned over film to Hunt, who then gave it over to Liddy.
Hunt also gave Buckley plain envelopes containing cash on occasion
to cover Buckley’s expenses. This procedure continued until April
1972, when it was decided that Muskie was no longer a viable can-
didate and the operation was terminated. 83
The Ruby I operation, as Hunt and Liddy referred to it, lasted
approximately eight months and cost about $8,000. Buckley testified
23 Porter interview, Sept. 6, 1973, p. 19.
25 2 Hearings 670.
28 2 Hearings 669-670. See also exhibit 34, p. 351. For other examples of copied informa-
tion, see 11 Hearings 4889.
27 Id. at p, 670.
28 Rietz interview, Sept. 19, 1973.
20 Porter interview, Aug. 20, 1973, p. 20.
30 Hunt executive session, June 12, 1973, pp. 208-09.
31 2 Hearings 792.
32 Hunt executive session, June 12, 1973, p. 209.
33 9 Hearings 3761.
190
that he and Wyatt did not participate in any other political intel-
ligence operations for the CRP. 34
b. Sedan Chair I
The genesis of Sedan Chair, according to Bart Porter, was Jeb
Magruder’s concern with the favorable publicity the Democrats re-
ceived during past campaigns from the humor generated by Demo-
cratic prankster Dick Tuck and those like him who were making
Republicans the objects of their pranks. 35 In an effort to get similar
headlines, Magruder instructed Porter to obtain advance schedules
for leading Democratic contenders as part of a plan to carry out
disruptive activities. 36
The first operation arranged by Porter involved a MuSkie visit to
Chicago. An unidentified associate of Porter’s organized a crowd carry-
ing Nixon signs to meet Muskie at the Chicago airport, a move that
generated some news in the local papers. Similar events took place in
Cincinnati and Columbus, Ohio, and in cities in New Jersey. Accord-
ing to Porter the efforts were unsuccessful, eliciting in the media
1 ittle favorable Republican publicity. 3 7
Occasionally Porter paid his field operatives small amounts of
money, which he received from Hank Buchanan, the accountant at
CRP . In the early stages, he stated that he never distributed more than
$100 or $200 to any individual. 38
In conjunction with these efforts, Porter went to Ron Walker, then
the President’s chief “advance man,” and asked Walker if he had any
associates who might be proficient at “dirty tricks.” 39 Walker recom-
mended Roger Greaves, a friend of his, and shortly thereafter Greaves,
Porter, and Magruder met in California. Following the meeting
Greaves was retained and given the code name “Sedan Chair,” a ref-
erence to an old Marine Corps operation that Porter remembered. 40
It was Porter’s understanding that Magruder wanted someone to fol-
low or precede Democratic candidates and cause general harassment.
For example, Porter said that Magruder envisioned an individual
who would rob motorcades of automobile keys, schedule fake meetings,
or steal shoes of the opposition workers that were left in hotel halls
to be polished. 41 Greaves was told that he would be reimbursed for ex-
penses and that Porter would be the CRP contact. He was told that if
successful in early forays he would be hired on a long-term basis. 42
Greaves’ recollection of the meeting with Porter and Magruder is
that Magruder wanted someone to filter stories to the media, to gather
information from the opposition, and to cause harassment. Magruder,
according to Greaves, stressed the need for performing his tasks
covertly. Greaves said he was told by Porter that he should terminate
the job he then had and that cover employment would be arranged
with a large corporation, which would pav Greaves’ salary for work
performed at Porter’s direction. 43 According to Porter, Greaves at
84 11 Hearings 4445.
36 Interview of Herbert L. Porter, Apr. 2, 1973.
88 Ibid.
37 Ibid.
38 Ibid.
30 Interview of Herbert L. Porter, Aug. 20, 1973.
40 Interview of Herbert L. Porter, Apr; 2. 1973.
41 Ibid.
43 Interview of Herbert L. Porter, Aug. 20. 1973.
43 Interview of Roger Grea ves. Aug. 21, 1973.
191
first expressed reservations about taking the job, but agreed with Ma-
gruder’s suggestion that he perform some pranks in California on a
trial basis. 44
A November 17, 1971, confidential memo from Porter to Magruder
concerning the operation reads as follows :
Things went well in Los Angeles with our friend. I would
like the “green light” to proceed with the second part of the
plan. This will involve finding him a “suitable” home.
He is ready, willing, and most able. Any ideas? 45
Porter stated that the “suitable” home, referred to above, was finding
a corporation to pay Greaves’ salary while he covertly worked for
CEP. 46 In addition, the date of the memo above indicates that it was
written after some of Greaves’ early successful activities described
below.
Shortly after the meeting in California Greaves received a call
from Porter, who relayed Muskie’s schedule and instructed Greaves
to arrange for pickets at a Muskie appearance. Blacks and “hippies”
were preferred as pickets by Porter according to Greaves. Porter asked
Greaves to place Nixon signs at the airport arrival of Senator Muskie
and to place anti-Muskie signs at a dinner at which the candidate was
scheduled to speak. On another occasion, Porter said that Magruder
told him to have Greaves place some signs at the Muskie rally at Whit-
tier College and perhaps get media coverage. This rally was the same
occasion when Chapin instructed Segretti to arrange for pickets. 47
According to Porter, money was sent to Greaves on three occasions. 48
On the first occasion, Greaves claimed he needed $300 immediately for
pickets who were to appear at the Muskie appearance at Whittier Col-
lege. 49 The second instance occurred when either Magruder or Ken
Khachigian asked Porter to send Greaves 25 copies of the anti-Muskie
pamphlet ostensibly put out by the “Citizens for a Liberal Alterna-
tive.” 50 A Muskie fundraising dinner was planned in Beverly Hills,
and Khachigian or Magruder thought it would be humorous to place
a copy of the pamphlet in each of the menus, according to Porter. 51
However, because the dinner never occurred — Senator Muskie was ap-
parently ill — this stunt was sidetracked. 51 * The third time Porter for-
warded money to Greaves was in January 1972, when Greaves finally
decided to join the reelection campaign as a political prankster. 52
Porter testified that Magruder told him he needed someone to work
fulltime on political pranks in January 1972. It was Porter’s im-
pression that Magruder was under pressure to make immediate ar-
rangements for someone to go on to New Hampshire and then to
Florida to perform pranks and familiarize himself with the Muskie
campaign. 53
Porter, contacted Greaves and instructed him to use his imagina-
tion in performing political pranks that would get good coverage
in New Hampshire. 54 A salary of $2,000 per month was agreed upon.
« Ibid.
45 See exhibit 35, p. 352.
49 Porter interview. Aug. 20, 1973.
47 See p. 164 supra.
49 Porter Interview, Aug. 20, 1973.
40 Ibid.
50 See p. 157. supra, tor a fuller discussion of the “Citizens for a Liberal Alternative.”
91 Porter Interview, Aug, 20, 1973.
514 Ibid.
^ Ibid.
" Interview of Herbert L. Porter, Apr. 2. 1973.
** Interview of Herbert L. Porter, Aug. 20, 1973.
192
Before Greaves commenced his activities, he had his picture taken by
Porter. This was done at the request of Gordon Liddy, who explained
to Porter that some of his underlings would be doing some rough work
in New Hampshire and he wanted to avoid injuring Greaves. 55
By all accounts, Greaves’ performance in New Hampshire was a dis-
mal failure. Greaves often did nothing more than visit bars and listen
to conversations about the Muskie campaign. 56 Porter has testified
that Greaves said he arranged calls to voters in the middle of the
night with the caller falsely stating that they were “Harlemites for
Muskie” requesting the voter’s support for Muskie. In his interview
with the Select Committee staff, Greaves flatly denied any involvement
in this episode. 57
Greaves spent some time in New Hampshire and then went to Florida
where he again was supposed to organize activities disruptive to
Muskie’s campaign. Greaves stayed in Florida only a few days before
returning to California. 58 The next time Porter heard from Greaves
was when Greaves called and said he had returned to California and
was resigning for personal reasons. 59
c. Sedan Chair II
Following Greaves’ departure, Magruder told Porter he needed
another operative in the field to gather information about various
Democratic candidates. Magruder said he was directed to place another
individual in the opposition campaign by John Mitchell. 60 Magruder
stated that this person was to provide information only and was not
to engage in any disruptive activities. 61 Porter instructed Roger Stone,
a young scheduler in his office, to make arrangements for someone
who would work “in two or three of the primary campaigns as kind
of an eyes and ears. * * *” 62
Roger Stone’s recollection of the original Sedan Chair II discus-
sions conflicts with the testimony of Magruder and Porter. Stone
recalled discussing the need with Porter for an individual who would
perform political pranks as well as gather useful information con-
cerning opposition campaigns. 63 Stone said he discussed the need for
a “clever fieldman” with Morton Blackwell, who recommended
Michael W. McMinoway of Louisville, Ky. 64
After introductory telephone conversations with McMinoway, Stone
flew to Louisville, and using the assumed name of Jason Rainer, Stone
explained to McMinoway that he was being recruited to “work in the
Presidential primary states and track and infiltrate the Democratic
organizations * * *” 65 The two agreed that McMinoway would receive
$1,500 a month for his services 66 and that after “Rainer” designated
“ Ibid.
" Interview of Herbert L. Porter, Aug. 20, 1973 ; see alto, Greaves Interview, Aug. 21,
1973.
•7 Greaves Interview, Aug. 21, 1973.
« Ibid.
“ Interview of Herbert L. Porter, Apr. 21, 1973.
*> Magruder Interview, Aug. 18, 1973, p. 6.
61 Magruder Interview, Oct. 1, 1973. p. 9.
M 2 Hearings 659 ; Interview of H. I,. Porter, Aug. 20, 1973, p. 23.
M Roger Stone Interview. Aug. 15, 1973.
’•Ibid. See also 11 Hearings 4478. See also, Blackwell Interview, Sept. 9, 1973.
K 11 Hearings 4478.
“McMinoway received periodic payments from Stone beginning on Mar. 17, 1972, con-
tinuing through July 8. 1972. These payments, according to McMinoway, amounted to
$5,808.10. 11 Hearings 4479.
193
which Democratic organizations were to be infiltrated, the “actual
operation procedures” would be left up to McMinoway. 67 At this first
meeting and throughout McMinoway’s tenure, efforts were made to
conceal CRP’s involvement in the undertaking. Stone told McMinoway
only that “he was working for a group of concerned citizens that were
interested in the outcome of the 1972 Presidential election.” 68 McMi-
oway was supplied with a post office box in Washington to which he
was to send information, thereby avoiding any contact with CRP or its
officials. 69 McMinoway was subsequently given instructions by Stone,
who said he received them from Porter, who said he obtained them
from Magruder.” Magruder received most of his instructions from
John Mitchell. 71
In his testimony before the Select Committee, McMinoway de-
scribed how he infiltrated a Democratic candidate’s campaign : “The
usual procedure was to start off as a volunteer worker in the particular
organization from which I wished to gather information.” 72 Hard
work and seemingly helpful efforts on behalf of a particular candidate
advanced McMinoway in the organization. “My objective”, McMino-
way testified, “was to work within an organization, to gain their con-
fidence and to therefore be able to be in a position where I could per-
sonally observe and find out the information that I felt important to
the organization and its structure.” 73 Occasionally McMinoway
worked simultaneously for two or three Democratic candidates. 74
After obtaining relevant information from the campaign organiza-
tions, McMinoway called Stone or transmitted the materials to Stone
via the Washington post office box. 75
Stone in turn passed the information he received on to Bart Porter. 76
Porter gave the information to Magruder and Bob Reisner, his assist-
ant, in the form of memos typed on blank paper beginning “a confi-
dential source reports.” 77 Magruder said that he sent this information
on to John Mitchell and to Gordon Strachan for H. R. Haldeman. 78
Finally, Strachan testified that he included information from Sedan
Chair II in his “political matters” memoranda for H.R. Haldeman.
He specifically recalled including the report on the Pennsylvania
Humphrey campaign discussed below. 79
In addition to this information-gathering function, McMinoway
occasionally engaged in disruptive activities which affected particular
Democratic campaigns.
McMinoway’s first assignment from Stone and the chain of com-
mand above him was to go to Wisconsin in March 1972, and infiltrate
the Muskie headquarters. Stone instructed McMinoway to obtain
information about Muskie staff members, campaign finances, sched-
ules of events and any other useful information. McMinoway’s diary
corroborated his success in gathering information in Wisconsin. 80
37 11 Hearings 4480.
K Ibid. About 1 month after he began, McMinoway, reflecting upon the nature of his
activities, concluded that he was working for the Republican Party.
* Ibid.
70 Porter Interview, Aug. 20, 1973 ; Stone Interview, Aug. 15, 1973.
71 Magruder Interview, Aug. 18, 1973, p. 6.
73 11 Hearings 4481.
73 11 Hearings 4507.
74 11 Hearings 4483.
75 At first McMinoway testified that he called Stone every other day ; later In the opera-
tion McMinoway testified he spoke with Stone “several times a day.” 11 Hearings 4482.
• 73 Stone Interview, Aug. 15, 1973. p. 6.
• 77 Porter Interview, Aug. 20, 1973. p. 16.
78 Magruder Interview, Aug. 18, 1973, p. 2.
73 6 Hearings 2441.
» 11 Hearings 4483.
35-687 0 - 74 - 15
194
Other activities of McMinoway in Wisconsin were intended to dis-
rupt Democratic candidates. On March 28, 1972, instead of supervising
the distribution of Muskie literature, his diary shows that McMinoway
talked his group of workers into drinking beer. 81 On March 30, he
visited the Humphrey headquarters and gave them a schedule of events
of the Muskie campaign. 82 On March 25, while still ostensibly a Muskie
worker, McMinoway visited McGovern’s headquarters and talked to
a worker there about possible disruptions of a Muskie television inter-
view. 83 Finally, on March 31, the diary shows that he “went down to
headquarters and diverted some election day precinct materials.”
Following the Wisconsin primary, Stone, acting on orders from
Porter, told McMinoway to infiltrate the Pennsylvania Humphrey
campaign. Using an alias, McMinoway presented himself as a volun-
teer and was welcomed to the campaign. He routinely began sending
relevant information about the campaign to Washington.
The Humphrey campaign also asked McMinoway to help supervise
their phone bank operations. In this capacity, he “promptly put people
[on the night shift] on calling and duplicating cards that had been
done by the day shift.” 84 In addition, he rearranged names to be
called so that the night shift would make the. small calls as the day
shift. 85 The impact of this action was noted in his diary : “Repetition of
calls is starting to aggravate the volunteer block captains. The cap-
tains are getting called two or three times and it is beginning to
bother them. Some captains have already quit because of the repeated
calls.” 88
At one point McMinoway wrote in his dairy that he hired people of
“low caliber qualifications” to work the phone banks. 82 On another
occasion, he rearranged stacks of names to be called so that prepared
messages to be read by the caller were directed to the wrong group. 88
Calls for black voters were substituted for calls to union members and
vice versa. On still another occasion, McMinoway falsely told volun-
teers who were scheduled to work the phone banks that they would
not be needed that particular day. 89 McMinoway testified that his
phone bank activities caused considerable disruption to the Humphrey
campaign, 90 because, as he wrote in his diary, “Humphrey is spending
one-third of his budget on the phone bank and literature packets that
the block captains will distribute.” 91
As in Wisconsin, McMinoway’s “loyalties” were not confined to the
Democratic candidate he had volunteered to assist. In an April 22,
1972, entry in his diary, he shows he called people from the Humphrey
headcmarters and urged them to vote for Senator J ackson. 92
McMinoway testified that he impressed the Humphrey people with
his willingness to work. Toward the end of the Pennsylvania cam-
paign, McMinoway testified that a national coordinator asked him to
a 11 Hearings 4484.
* Ibid.
» 11 Hearings 4486.
» 11 Hearings 4487-88.
* Ibid.
"Ibid.
” Ibid.
m 11 Hearings 4489.
® 11 Hearings 4491.
* 11 Hearings 4488.
« 11 Hearings 4709.
« 11 Hearings 4488.
195
work at the Humphrey Los Angeles headquarters in the California
primary. In his diary, McMinoway quoted from an alleged letter
that the national coordinator prepared to introduce him in California.
The letter said McMinoway was “an avid Humphrey supporter that
could be trusted in any project.” 93
McMinoway was then assigned by Stone and his superiors to go to
California and infiltrate both the McGovern and Humphrey cam-
paigns. 94 This assignment came after the mid- April 1972 meeting when
Gordon Strachan testified that H. K. Haldeman told him to tell G.
Gordon Liddy “to transfer whatever capability he had from Muskie to
McGovern.” 95 McMinoway testified that he engaged in the same
activities in California as he had in prior primaries, and that he
reported by telephone to Stone daily.
McMinoway testified that he learned of the Watergate break-in
after the California primary, while awaiting his next assignment.
McMinoway said he immediately called Stone, only to learn that his
number had been disconnected that same morning. About two days
later, McMinoway said that Stone called him and asked that he con-
tinue his activities, explaining that Stone had taken no part in any
illegal actions. 96 McMinoway said he remained unconvinced, but that
he agreed to go to Washington to meet with Stone’s supervisor to
receive reassurances of the propriety of his undertaking. In Wash-
ington, McMinoway testified he received a phone call in his hotel room :
“* * * The man identified himself merely as Mr. M., just for the
matter of having something, a reference, for me to contact, and he
reassured me that the organization I was working with was not
involved in illegal activities and quite strenuously passed on to me the
fact that they were not, in fact, connected with the people that were
apprehended.” 97
This mysterious caller was Bart Porter, who stated that he had
discussions with McMinoway after the June 17 break-in. Porter had
no recollection of any discussion about the break-in, recalling that
the conversation focused on a possible increase in salary for Sedan
Chair II. 98
McMinoway testified that after this convention he volunteered for
work at McGovern’s national headquarters in Washington, where he
worked closely with McGovern’s administrative staff. 99 As he ex-
plained, “by this time I had become a familiar face.” 1
At the Democratic National Convention, McMinoway claimed to
achieve new successes in his efforts to infiltrate the opposition. The first
5 days there he said were used to “amass information on where differ-
ent delegations were staying, where different hotels were, the locations,
and so forth.” 2 Thereafter McMinoway served as a member of the
security staff in McGovern’s headquarters at the Doral Hotel, a posi-
tion which, he testified, occasionally allowed him access to otherwise
private areas. As he explained in his diary, McMinoway said he was a
83 11 Hearings 4490.
84 11 Hearings 4492.
85 6 Hearings 2455.
88 11 Hearings 4494. Stone said that McMinoway was In Washington before the break-ln,
and never expressed any concern about the break-ln (Stone Interview).
87 11 Hearings 4495.
88 Porter Interview, Aug. 20, 1973, p. 25.
88 11 Hearings 4496.
1 11 Hearings 4497.
8 Ibid.
m
guard on the “penthouse” floor where McGovern was staying. McMino-
way also wrote in his diary that he had access to all of McGovern’s
convention operations rooms and that he met “all of the bigtime Mc-
Govern staff.” 3 McMinoway wrote that he watched television with
Senator McGovern on the night of the vote on the challenge to the
California delegation, and added, “It is amazing how easy it would be
to be right in the midst of all the operations and planning and yet be
an enemy.” 4
Many of McMinoway’s particular claims about his work at the
Democratic convention are contradicted by sworn affidavits and testi-
mony in the public committee record. 5 However, there is no question
that McMinoway was able to secure a position as a volunteer security
guard of the McGovern floors while working directly for the Commit-
tee To Re-Elect the President. 6
d. Ruby II
In February 1972, Howard Hunt hired Thomas Gregory, a student
at Brigham Young University, to infiltrate the Muskie campaign. 7
Hunt met Gregory through Robert Fletcher, the nephew of Robert
Bennett, Hunt’s employer at the Mullen Co. 8
Using the alias “Ed Warren,” Hunt called Gregory in Utah and
asked him to come to Washington for an expense-paid job interview.
About a week later Hunt and Gregory met at the Park Central Hotel
in Washington, where Hunt explained that he wanted information
from the Muskie campaign, including schedules, internal memoran-
dums, and general observations of the campaign. Gregory was to work
as a volunteer for Muskie, report to Hunt once a week, and receive
$175 a week for his services. Gregory accepted the offer. 8
The next day Gregory began working as a volunteer at the Muskie
campaign headquarters, where he was placed in the foreign affairs
section under Anthony Lake. 10 His job consisted of photocopying,
picking up schedules, and other random chores. Gregory did not photo-
copy any material for Hunt, but he did type reports based upon docu-
ments he read or conversations he overheard. 11
Hunt and Gregory met weekly in a drugstore at 17th and K Streets
NW., in Washington, D.C. During these brief meetings, Gregory
gave Hunt typed reports on the week’s activities ; when Hunt was not
available, Gregory gave this material to Robert Fletcher to pass on
to Hunt.
All information that Hunt received from Gregory was turned over
to Gordon Liddy, including the memorandums that Hunt typed which
summarized Gregory’s oral reports. Hunt did not retain any copies
of this material. 12
* 11 nearingt 4717.
* Ibid.
5 See. for example, sworn letter of Senator McGovern. 11 Hearing a 4743; testimony of
Frank Mankiewiez. 11 Hearing a 4616 ; affidavit of Thomas P. Southwlck, 11 Hearing « 4893 :
affidavit of Anthony Barash. 12 Hearings 5267.
* See Barash affidavit, Ibid.
7 11 Hearings 4636.
8 Gregory Interview, Sept. 1, 1973, p. 1.
8 Id. at p. 2.
10 Berl Bernhard testified that Lake was under electronic surveillance by the administra-
tion while he was working for the Muskie campaign. 11 Hearings 4665.
11 Gregory Interview, p. 3.
u Hunt executive session, June 12, 1973, p. 206.
197
Gordon Strachan testified that in mid- April 1972, Haldeman told
him to contact G. Gordon Liddy to tell him to transfer his “capability”
from Muskie to McGovern “with particular interest in discovering
what the connection between McGovern and Senator Kennedy was.” 13
Strachan also testified that he assumed “finally, there was going to be
one unified system” of intelligence gathering under Liddy after this
conversation. 14
At about this same time, Hunt asked Gregory to transfer to the
McGovern campaign as a volunteer, which he did. Gregory’s respon-
sibilities remained the same as in the Muskie campaign, with one sig-
nificant addition : he was now to prepare and assist Hunt and Liddy
in their plans to place electronic surveillance on McGovern head-
quarters. 15
Gregory gave Hunt a floor plan and office description of the Mc-
Govern headquarters at Hunt’s request. Hunt then introduced Greg-
ory to James McCord, in late April or early May 1972. In a meeting
at the Roger Smith Hotel, Washington, D.C., Hunt and McCord told
Gregory they were planning to place a “bug” in the McGovern head-
quarters and would need assistance. 16
In late May 1972, Gregory took McCord through the McGovern
headquarters to familiarize McCord with the physical layout. On a
second occasion— May 27, 1972— Gregory again took McCord through
the McGovern headquarters; on that visit, McCord unsuccessfully
attempted to plant a bug in Frank Mankewicz’s office. 17
Sometime in late May or early June 1972, Gregory met Gordon
Liddy for the first time, during an automobile ride in which Hunt
drove Liddy and Gregory around the McGovern headquarters while
Liddy told Gregory that he, too, was interested in getting into the
McGovern offices.
Hunt, Liddy, McCord, and Gregory met at a Washington hotel
to discuss breaking into McGovern headquarters to copy documents
and to go over a physical layout of offices and the location of alarm
systems. 18
By early June, Gregory had serious questions about the propriety
of his activities which he discussed with his uncle, Robert Bennett. On
or about June 15 or 16, 1972, Gregory met with Hunt to tell him that he
no longer wished to continue with his work. 18a After terminating his
employment with Hunt, Gregory also contacted the McGovern head-
quarters to discontinue his volunteer work. Gregory received ap-
proximately $3,400 for his services.
e. Colson Suggestions
Roger Stone
Bart Porter recalled that Colson wanted to send someone to New
Hampshire to make a contribution to the campaign of Rep. Pete
McCloskey on behalf of some radical group. 19 Porter testified that he
13 6 Hearings 2455.
14 6 Hearings 2470.
18 9 Hearings 3685.
« Gregory interview, Sept. 1, 1973, p. 4.
17 McCord DNC deposition, Apr. 3. 1973, pp. 155-59.
is Gregory Interview, Sept. 1, 1973, p. 4.
»* Ibid,
a Porter Interview, Ang. 20, 1973, p. 10.
198
gave Roger Stone $200 to travel to New Hampshire to make a cash
contribution to the McCloskey campaign. 20 Jeb Magruder stated that,
on one occasion, Charles Colson suggested that CRP send an individual
wearing a “gay lib” button to a McGovern meeting. 21
Roger Stone recalled that Porter suggested that he travel to New
Hampshire and contribute money to McCloskey from the Gay Libera-
tion Front. 22 Stone said he persuaded Porter to make the contribution
instead from the Young Socialist Alliance.
A few days later, Porter called Stone back to his office and gave him
$200 in cash for travel and a $135 contribution. Stone said he
converted the $135 into small bills and coins to convey the image of
a donation from many small contributors.
Stone said he went to New Hampshire and delivered the contribution
to a McCloskey campaign worker in a storefront. Stone received a
receipt for the contribution from the campaign worker showing the
source of the contribution as the “Young Socialist Alliance. 23
After he returned to Washington, Stone said he met with Porter
and they drafted an anonymous letter to the Manchester Union Leader
and enclosed a photocopy of the receipt. 24 The bogus contribution was
staged and subsequently attempted to be leaked to discredit the McClos-
key campaign with the New Hampshire voters. 25
Theodore Brill
Jeb Magruder testified that another incident initiated by Charles
Colson was the infiltration of the peace vigil conducted by a group
of Quakers in front of the White House. The group of Quakers gath-
ered daily in front of the White House to protest the administration’s
Vietnam’policy. Magruder said Colson told him that there “should be
someone finding out what the peace groups in front of the White House
were doing, 26 Magruder asked Ken Rietz, head of the Young Voters
for the President, to find someone to get Colson the information. Rietz,
whose experience in intelligence-gathering began with the placement
of “Ruby I,” 27 delegated the assignment to his assistant, George
Gorton.
Gorton contacted Roger Stone and asked Stone if he knew a local
Young Republican who “needed a summer job.” 28 Stone suggested
Ted Brill, a former chairman of George Washington University’s
Young Republican organization. Gorton asked Brill to come to CRP
headquarters where he told him that the job consisted of infiltrating
and monitoring the Quaker vigil “as a first assignment.” 29 Brill’s
assignment was to determine the future intentions of this group, par-
ticularly its plans for the Republican Convention in Miami. Brill peri-
odically visited the vigil, sometimes wearing a McGovern campaign
button, and talked with the protestors during the next 6 weeks. 30 He
reported verbally to Gorton six or seven times and received about $675
for his efforts. Brill was terminated the week following the Watergate
break-in.
30 2 Hearings 658.
“ Magruder Interview, Aug. 18. 1973. p. 4.
* Stone Interview, Aug. 15, 1973, p. 2.
» Id. at p. 3.
» Ibid.
M Ibid.
30 Magruder Interview, Aug. 18, 1973, pp. 3-4.
"Seep. 187, supra.
“ Stone Interview, Aug. 15, 1973, p. 8.
* Brill Interview, Sept. 8, 1973, pp. 2-3.
so Ibid.
199
Throughout the Gorton-Brill contacts, the possibility of further
assignments was discussed, including infiltrating dissident groups at
the Republican Convention. Brill testified that, after news of the
Watergate break-in, he received no further assignments. 31
Magruder stated that the information from Brill went back to Ken
Rietz and then to Bichard Howard in Colson’s office. 32
f. Chapman’s Friend
Chapman’s Friend was a code name used by two reporters who were
hired by Murray Chotiner, a veteran of many Nixon campaigns, to
travel with opposit ion campaigns posing as newspaper reporters, and
to monitor the a<j ivities of these opposition candidates during the
1972 campaign. 3 ? Chotiner said the operation was approved by John
Mitchell but was handled directly by Chotiner. 34
The first Chapman’s Friend, Seymour K. Freidin, worked from
March to November 1971, and from May until the end of August 1972,
covering as many candidates as possible. 35 Freidin was not reporting
for any newspaper at the time, and received his sole source of income
from Chotiner. Chotiner said he told Freidin to observe everything
he could while traveling with various campaigns and to report the
information back to Chotiner. Freidin identified himself as a work-
ing journalist to gain access to the Democratic campaigns. He phoned
his reports to Chotiner or Chotiner’s secretary. The reports discussed
crowd reactions, interviews with staff people, and events that oc-
curred both privately and publicly while on the, campaign trail. 36
The reports were typed in draft form by Chotiner’s secretary and
edited by Chotiner, whose final versions were sent to Haldeman and
Mitchell. 37 Once the Chapman’s Friend Report reached Haldeman,
it was again copied and sent to members of Haldeman’s staff. 38 There
was no indication on the Chapman’s Friend Report where the infor-
mation came from or who was responsible for providing it. The re-
ports were simply labeled “Chapman’s Friend Reports.” Some time in
August 1973, Freidin got another assignment as a reporter and ter-
minated his employment with Chotiner.
Chotiner then hired Lucianne C. Goldberg, Mrs. Goldberg traveled
with the campaign of Senator McGovern, and also used the code name
of Chapman’s Friend. Mrs. Goldberg was employed by Chotiner from
September 1972 through the election in November. 39
Both Goldberg and Friedin were paid $1,000 per week plus expenses
with checks drawn from Chotiner’s law office account. Chotiner’s sec-
retary submitted expense vouchers to FCRP for reimbursement of
Chotiner’s expenses. 40 On the vouchers the payee’s salary was shown
only as “reimbursement for survey,” and related expenses were shown
only as “reimbursement for survey expenses.” 41
The only people who knew the true purpose of the “survey” expendi-
tures, according to Chotiner, were Mitchell, Magruder, and Robert
31 Ibid.
a Magruder Interview, Aug. 18. 1973, p. 4.
Chotiner Interview, Aug. 9, 1973,
34 Chotiner Interview, Aug. 17, 1973.
“ GAO report, Dec. 18, 1973.
K Chotiner Interview, Aug. 9, 1973.
» Ibid.
38 Hlgby Interview, May 10, 1973.
» GAO report, Dec. 18, 1973.
*> Chotiner Interview, Aug. 17, 1973.
“ GAO report, Dec. 18, 1973.
200
Odle. Chotiner told Odle the purpose of the payments but refused to
reveal the identities of the Chapman’s Friends because he did not want
the name of the informant disclosed before the election. Odle, however,
denied any knowledge of the purpose of the expenditures made by
Chotiner until some time in June 1973, when he was informed of the
purpose during questioning by the FBI. 42 Odle wrote a memorandum
on September 8, 1972, to Nick Bungato, a driver at CRP, which stated :
Once or twice a day you will get a call from Mr. Chotiner’s
office in the Reeves & Harrison law firm on the fifth floor of
1701, asking you to deliver envelopes directly to Mr. Halde-
mans’ office on the first floor of the West Wing at the White
House.
Please give these requests top priority since the envelopes
are very important and time will always be a factor. 43
g. Yowng Voters for the President Demonstrations
The CRP’s efforts to counter or neutralize the traditionally Demo-
cratic youth vote were coordinated by the Young Voters for the Presi-
dent (YVP). Memorandums indicate that Ken Rietz, head of YVP,
was directed by J eb Magruder to organize demonstrations against the
McGovern- Shriver campaign with the advice of Ed Failor, special
assistant at CRP. 44
Rallies organized in the spring of 1972 were initially in support of
the President’s announcement on May 8, 1972, of the mining of Hai-
phong Harbor. Rietz organized a pro-Nixon vigil at the White House 45
and organized “pro-RN demonstrations where needed.” 48
After Senator McGovern was nominated at the Democratic conven-
tion, Magruder directed Ed Failor to take responsibility for setting up
“McGovern-Shriver Confrontations.” 47 Ken Rietz reported to Failor
weekly on the success of the YVP in organizing demonstrations against
the President. 48 Failor himself reported to Magruder about his own
efforts to disrupt the McGovern campaign :
* * * I have personally endeavored to create an encounter
between Shriver and a busing opponent on the busing issue
for today in Las Vegas. Antibusing people will be used in this
encounter and no Republicans will be surfaced. 49
In Rietz’s report on the activities of the week of September 22, 1972,
he cited daily orchestrated demonstrations by Young Voters for the
President at McGovern and Shriver campaign stops. Rietz explained
that good media coverage resulted from these efforts :
* * * Reporter Bruce Morton concluded that it was not a
very good stop [for McGovern] . We are told an AP wire story
reported the presence of young Nixon supporters. 50
Rietz also reported that the demonstrations “upset” candidate Mc-
Govern in Milwaukee. Finally, these demonstrations apparently
42 Ibid.
43 See exhibit 36, p. 353. Also, there were apparently discussions in the McGovern cam-
paign about sending a similar individual on the Agnew campaign plane. However, these
plans were vetoed by Senator McGovern.
44 866 exhibit 37, p. 354
15 See exhibit 21, p. 305 ; memo from Liddy to Mitchell, May 15, 1972.
46 See exhibit 20, p. 301 ; memo from Odle to Mitchell, May 9, 1972.
17 See exhibit 37, p. 354.
48 An example is attached at exhibit 37 ; other examples are found in committee flies.
48 See exhibit 37, p. 354.
50 Ibid.
201
forced cancellation of some of McGovern’s planned activities. Failor
wrote to Magruder :
We have learned the McGovern organization and/or the
Secret Service has reacted to our activities. The San Gen-
nero Festival in Greenwich Village, N.Y., Saturday night
was originally planned as a walking tour of a few blocks by
McGovern. However, as a result of the events in Flushing,
X. Y., on Thursday, September 21 [organized by YVP],
the street walk was canceled and McGovern spoke in an area
that was barricaded off. 51
h. Use of Advance People
On July 28, 1971, Pat Buchanan wrote a memorandum to Attorney
General Mitchell, which suggested the following activity for the 1972
campaign :
Special Projects. We would like to utilize Eon Walker’s re-
sources where possible to handle some close-in operations,
pickets and the like, when candidates visit various cities.
The candidate normally brings with him his own media, he
attracts local media, and we would like to be able to “piggy-
back” on that media — with our own operations, anticandi-
date. This requires support activities from some source. Eon
has an operation in place, and they will need approval—
either general or specific — for these covei't operations. 62
Eon Walker headed the White House advancemen, who were used
to set up the logistics for Presidential visits. Thus, Buchanan sug-
gested that they be used for “anticandidate,” “covert operations”
against the Democratic candidates. Buchanan testified that this idea
was rejected. 63
However, Eon Walker testified about other questionable tactics
sometimes used by advancemen to counteract protesting signs at Presi-
dential appearances. Walker said that groups with pro-Nixon signs
on sheets would be organized by advancemen prior to the appearance.
At the first sign of any protest, the group would be moved to a curb-
side to place their signs between the President's motorcade and the
protesting observers. 54
Walker also testified that it was the advance operation’s policy to
insure that “undesirables” did not show up at Presidential rallies.
One technique used to keep out “undesirables” was the “fake ticket
routine,” in which the advanceman would ask for the ticket of an
individual and then declare it a “fake” and escort the individual from
the rally. 55 Walker said this technique was used in Charlotte, N.C.,
on Billy Graham Day to cope with potential protesters who were
planning to show up for the President’s appearance.
Walker also stated that there were other recommendations for coping
with demonstrators. One idea that was discussed was that the advance
operation should have ready a pickup truck with cowboys in it, and
« Ibid.
52 10 Hearings 4190.
53 10 Hearings 3931.
64 Walker interview', Aug. 15, 1973, p. 5.
65 Id. at p. 6,
20 2
if there were any trouble at an appearance, they would release the
cowboys and “let things happen.” 56 Walker said he recalled Haldeman
discussing such tactics but that such tactics were never implemented. 57
i. Vote Siphoning Schemes
Vote siphoning is essentially a direct interference by one political
party or campaign in the affairs of another party or campaign for the
purpose of weakening or eliminating an opposition candidate.
In 1972, the Committee To Re-Elect the President (CRP) secretly
financed efforts to take votes away from Senator Muskie in the New
Hampshire and Illinois primaries, and secretly supported an effort in
California to drive the registration of the American Independent
Party (AIP) below the required minimum so that AIP would not
qualify for a spot on the ballot in the general election.
The New Hampshire Primary : The effort to take votes away from
Senator Muskie in New Hampshire was initiated by Charles Colson,
according to Magruder, who told him that the project had been ap-
proved by both Haldeman and the President. 58 Magruder cleared the
project (at a cost of $8,000-$10,000) with John Mitchell and also
spoke to Haldeman about it. 59 Colson, or someone in his office, accord-
ing to Magruder, drafted a letter supporting a write-in campaign for
Senator Kennedy, whose name was not on the ballot. The draft was
taken by someone in Colson’s office to Robin Ficker, a Democratic
politician in Montgomery County, Md. who had been running a
Kennedy-for-President headquarters since July 1971. 60
Ficker said that in February 1972 someone who identified himself
in a telephone conversation as Mike Abramson, asked him to sign a
letter calling for a Kennedy write-in campaign. The letter was brought
to Ficker’s home by a “Bill Robinson,” who said he was with a law
firm in Washington, D.C. 61
Ficker signed the letter because he agreed with its contents. He was
later told that between 150,000 and 180,000 copies of the letter were
mailed to New Hampshire residents whose names appeared on the
CRP mailing list of Democrats. 62
Ficker also went to New Hampshire, shortly before the primary,
and campaigned for Kennedy for 4 or 5 days. At Abramson’s sug-
gestion, he placed one advertisement in the Manchester Union Leader,
credited to the United Democrats for Kennedy, which he signed and
paid for himself. 63
Ficker never saw Mike Abramson and never knew where he could
be reached. Ficker believed that he worked with Kennedy aides in co-
ordinating the Kennedy write-in campaign in New Hampshire. 64
The write-in campaign for Senator Kennedy was totally financed by
the Committee To Re-Elect the President, yet that information was
“ Ibid.
57 Ibid.
68 Jeb Magruder Interviews, Aug. 18, 1973, p. 3 ; and Oct. 1, 1973, p. 11.
69 Id. at p. 11.
80 Magruder said the individual who took the letter to Ficker worked in Colson’s office,
but this person has not been identified.
61 Robin Ficker interview, p. 1.
62 Magruder interview, Oct. 1, 1973. For a copy of the letter, see 10 Hearings 4266.
63 Ficker interview, p. 2. The write-in effort was not successful. Senator Kennedy received
only 735 (0.9 percent) of the Democratic votes in the primary. Congressional Quarterly,
Mar. 11, 1972, p. 539.
64 Ficker interview, p. 2.
203
disclosed neither to Mr. Ficker or to the public during the campaign.
Patrick Buchanan testified that, although not acquainted with the
Ficker letter, he knew about Ficker’s write-in campaign. 65 Asked
about the propriety of the letter, Buchanan responded that it was “a
borderline case,” with regard to unethical campaign practices. 66
Buchanan had advocated a form of vote siphoning in an October 5,
1971, memorandum to Mitchell and Haldeman:
(3) Fourth party candidacies . — Top level consideration
should be given to ways and means to promote, assist and fund
a fourth party candidacy to the left Democrats and/or the
black Democrats. There is nothing that can so advance the
President’s chances for reelection — not a trip to China, not
4i/>-percent employment — as a realistic black Presidential
campaign. 67
The absence of a requirement that the true sponsors of such efforts to
aid opposition party candidates be disclosed may mislead the public
into thinking that there is more support for such candidates than in
fact, there is.
The Illinois Primary: The Committee To Re-Elect the President
apparently also directed some money to the Illinois primary campaign
of Senator Eugene McCarthy, hoping that McCarthy would take votes
away from the other candidate on the ballot, Senator Muskie. 68 Once
again, financial support of an opponent of Senator Muskie was not
disclosed to the public.
American Independent Party Effort in California: The American
Independent Party (AIP) was founded by supporters of George
Wallace’s Presidential aspirations. The attempted vote siphoning
aimed at AIP was limited in scope and unsuccessful, but it none-
theless provides an insight into the tactics supported by CEP to
assure President Nixon’s re-election.
Under California law, 69 a political party, as of January 1 of an
election year, must have registered voters exceeding one-fifteenth of
1 percent of the total voter registration in the State to qualify for
the ballot in a primary election. The plan was to convince enough of
the approximately 140,000 registered AIP voters to re-register in
another party before January 1, 1972, to drop AIP registration below
the one-fifteenth of 1 percent figure.
The re-registration plan was conceived in early 1971 by Robert J.
Walters, a California businessman and sometime Wallace supporter
who had become disenchanted with the AIP after the 1968 Presidential
election. 70 Walters was upset because the AIP was drawing votes
away from conservative candidates of the two major parties.
It was Walters’ understanding that voters who had changed
addresses since the 1970 election without notifying county authorities
could be purged from the list of registered voters if proof of the
address changes were presented to the officials. Walters planned to
63 10 Hearings 3968.
63 Ibid.
67 10 Hearings 4201 (excerpted from exhibit No. 179, which begins at 10 Hearings 4197).
68 Gordon Strachan interview, Aug. 13, 1973, p. 8, and John Mitchell interview, June 27,
1973.
09 California Election Code, sec. 6430.
70 Walters interview, Aug. 31, 1973.
204
send a mass mailing to registered AIP voters, receive from the
Post Office those letters undeliverable because of address changes,
and then forward them to county election officials for purging. Walters
also planned to enlist a large group of people who would personally
contact AIP voters and urge them to re-register. Walters mailed
re-registration literature under the heading of the “Committee
Against Forced Busing’’ urging AIP members to fight against busing
by joining one of the major parties.
In the summer of 1971 Walters began writing letters to numerous
conservative groups asking for support. Walters also wrote a letter
to CRP in Washington. In late September 1971, an unidentified
man called Walters from New York City, said he worked for a group
doing public relations work for President Nixon’s re-election effort,
and told Walters that he would be contacted by someone else regard-
ing the reregistration drive.
About mid-September, according to Walters, a man called him
from a Los Angeles hotel and identified himself as Mr. Magruder
from “out-of-town.” He said that he and Jeb Magruder met and dis-
cussed Walters’ reregistration plan. Magruder remembered meeting
with Walters and discussing the plan. 71
While Walters waited for a followup call to the meeting with Ma-
gruder, an initial mailing went out, largely funded by Willis Carto
of the Liberty Lobby. 72 About October 1 Walters hired a friend, Glenn
Parker, to assist in the drive.
In the meantime, Magruder received John Mitchell’s approval for
spending $10,000 73 and discussed the plan with Lyn Nofziger, 74 a
Californian with many years of political experience who was then
at the RNC. Nofziger called Jack Lindsey, a Los Angeles businessman
whom he knew. Nofziger mentioned Walters’ plan to Lindsey and
Lindsey agreed to monitor the project and pay the expenses. 75 Nofziger
then arranged to send Lindsey $10,000 in cash that he obtained from
Hugh Sloan. 76
Lindsey called Walters to arrange a meeting to discuss funding
without indicating the source of the money. Walters briefed Lindsey
on the results of the mass mailing and door-to-door visits during
several occasions in the late fall of 1971. Lindsey forwarded Walters’
written reports on the drive to Nofziger, 77 who said he mailed them to
Magruder without reading them. 78 Lindsey paid Walters’ expenses
plus $150 per week salary. After the reregistration drive folded in late
1971, Lindsey still held $1,000 of the $10,000, which he said he donated
in his name to a Los Angeles fundraising dinner for President Nixon.
The reregistration effort itself never got off the ground despite the
$10,000 CRP contribution. Many county officials refused to “purge”
voters who had moved. 79 In addition, the personal canvassing effort
faltered from the beginning and ended up involving members of the
American Nazi Party.
71 Magruder interview, Oct. 1, 1973.
72 Walters interview, Aug. 31, 1973.
78 Magruder interviews, Aug. 18, and Oct. 1, 1973.
74 Nofziger interview, Aug. 29, 1973. Unless otherwise noted, the details of the Nofziger-
Magruder discussions that follow are from Nofziger’s recollection. Magruder had little
recollection of these discussions.
75 Nofziger interview ; Lindsey interview.
76 Nofziger interview ; Craig Mauer interview, Aug. 14, 1973 ; see also 2 Hearings 541.
77 Lindsey interview ; Nofziger interview.
78 Nofziger interview.
79 See, e.g., exhibit 38, p. 358.
205
Walters was never able to recruit volunteers or paid canvassers in
numbers sufficient to assure more than a minimal canvassing effort. His
assistant, Glenn Parker, knew that Joseph Tomassi, then head of the
regional Nazi Party, needed money for mortgage payments on the
party headquarters. 80 Parker hired Tomassi and some of his associates
who contacted AIP members on the reregistration drive without iden-
tifying themselves as Nazi Party members. Documents show that
Tomassi received some $1,200 of money originally from CEP for his
efforts. The reregistration drive was a complete failure, according to
all participants.
j. Unsigned Literature
In addition to the incidents cited above of unsigned literature
printed and distributed by CEP agents prior to the break-in at the
DNC, S1 there Avas a suggestion made by the White House after the
break-in that unidentified literature should be prepared and distrib-
uted by the CEP. Eichard Howard, Charles Colson’s administrative
assistant, wrote in a memo to Ed Failor on June 28, 1972 :
An idea that has come from very high sources is that a
booklet or small brochure be prepared (with no identification
as to Avho prepared it) on the “McGovern Platform.’’ All the
issues should be listed such as labor, national defense, am-
nesty, pot, poverty, abortion, etc. Under each issue should be
the worst possible quote, statement, or reported position by
McGovern regarding the issue.
Some of his bland or noncontroversial issues should also
be included. After the booklet is completed, a large distribu-
tion should be made to opinion leaders. 82
There is presently no evidence before the committee to indicate
Avhether this suggestion was implemented.
3. IMPACT OX DEMOCRATIC CAMPAIGNS
It is difficult, if not impossible, to assess accurately the impact of
the activities described above on the 1972 Presidential campaign.
Donald Segretti testified that one of the tactical objectives outlined
for him by Dwight Chapin was “to foster a split between the Demo-
cratic hopefuls.” 83 In addition, much of the other disruptive activity
described above appears to ha\ T e been intended to “divide the Demo-
crats,” in the words of Pat Buchanan. 84 Both Berl Bernhard, Senator
Muskie's campaign manager, and Frank Mankiewicz, Senator Mc-
Govern’s campaign director, testified that the activities described
abm-e Avere successful in dividing the Democratic candidates among
themselves.
Bernhard testified that the “dirty tricks” emanating from the White
House and CEP “generated suspicion and animosity between the
staffs of the Democratic contenders.” 85 Mankiewicz testified that the
objective of the “dirty tricks” Avas :
80 Parker interview, Aug. 28, 1973.
81 See pp. 168-73 supra.
83 See exhibit 39, p. 360.
83 10 Hearings 3980.
10 Hearings 4197.
85 11 Hearings 4667.
206
* * * to create within the Democratic Party such a strong
sense of resentment among the candidates and their followers
as to make unity of the party impossible once a nominee was
selected. At that, the efforts seems to have been most success-
ful. 86
Though no witness could testify that the outcome of the general
election would have been any different if the “dirty tricks” discussed
above had not occurred, these activities helped to leave the Democratic
Party bitterly divided at the close of the Presidential primaries. 87
Frank Mankiewicz noted that “what was created by the sabotage
effort was an unparalleled atmosphere of rancor and discord within
the Democratic Party.” 88
Senator Muskie was widely acknowledged throughout 1971 as the
Democratic frontrunner and most formidable political opponent for
President Nixon. As Patrick Buchanan wrote Attorney General
Mitchell on July 28, 1971 :
The clear and present danger is that Senator Muskie, the
favorite in the early primaries, will promenade through the
primaries, come into the convention with a clear majority
and enormous momentum for November. That would be bad
news for us. 89
As a result of this concern, almost all of the activities described
above- -Segretti and agents, Ruby I, Ruby II, Sedan Chair, Sedan
Chair IT, and others — initially focused their attention on Senator
Muskie. After the early primaries, Senator Muskie’s campaign de-
clined, and he withdrew from active campaigning following the Penn-
sylvania primary. On April 12, 1972, Buchanan and Khachigian wrote
to TIaldeman and Mitchell :
Our primary objective, to prevent Senator Muskie from
sweeping the early primaries, locking up the convention in-
April, and uniting the Democratic Party behind him for the
fall, has been achieved. 90
Berl Bernhard testified that Senator Muskie’s decline was attribut-
able to a lack of adequate financing, a proliferation of Democratic
primaries, the polarization of the Democratic Party, and the problems
of a “centrist” candidate. 91 However, Bernhard also testified that the
“dirty tricks”
... took a toll in the form of diverting our resources, chang-
ing our schedules, altering our political approaches, and be-
ing thrown on the defensive. 92
Finally, both Mankiewicz and Bernhard testified that the activities
described above were not “politics as usual” for either Democrats or
Republicans. 93
Apart from the activities noted above that were directly linked to
President Nixon’s reelection campaign, the campaigns of Democratic
88 11 Hearings 4603.
81 See, e.g., testimony of Frank Mankiewicz at 11 Hearings 4603, where he states that
“any reuniting of factions — normally the course in a Democratic campaign after the
primaries — became far more difficult.”
88 11 Hearings 4604.
80 10 Hearings 4186.
00 lOHearings 4226.
91 11 Hearings 4652.
m 11 Hearings 4667.
“ 11 Hearings 4603 ; 4655.
207
contenders encountered many other instances of disruptive or deceptive
behavior. For example, the well-known “Canuck Letter” was pub-
lished by the Manchester Union Leader on February 24, 1972, less than
2 weeks before the New Hampshire primary. 94 The letter, allegedly
from a “Paul Morrison” of Deerfield Beach, Fla., claimed that Senator
Muskie had laughed at an aide’s use of the racist slur “Canuck.” 95
Senator Muskie issued an absolute denial of the charges on a flatbed
truck outside the offices of the Union Leader and denounced its editor,
William Loeb. The committee was unable to discover the individuals
responsible for this “dirty trick.” 96 Senator Muskie also responded
emotionally to an article about his wife reprinted in the Union Leader,
which was subsequently reported by the media as the Muskie “crying”
incident. 97
The other instances or allegations of improper activities directed at
Democratic candidates that were not linked to any other Presidential
campaign are contained in the committee files and are not detailed
in this report. 98
C. Improper Activities Directed Against President Nixon’s
Re-Election Campaign
Testimony before the committee indicates that the 1972 re-election
campaign of President Nixon was subjected to some improper, un-
ethical or illegal activities perpetrated by persons individually or in
combination with others. Some of these activities took the form of vio-
lent acts of destruction against local campaign offices. The select
committee condemns all acts of violence by individuals against the
campaign of any political candidate. Other improper activities di-
rected at President Nixon's campaign included demonstrations which
may have prevented citizens from exercising their rights to assemble
freely, and a few examples of scurrilous literature directed against
President Nixon.
It should also be noted that except for a few isolated examples noted
below, there is presently no evidence indicating that these improper
activities were directly or indirectly related to the campaign of any
Democratic candidate.
1. DEMONSTRATIONS
Affidavits in the committee record describe in detail some of the
violent demonstrations directed against the Nixon re-election cam-
paign. 99 The most significant of these demonstrations are described
below.
In Boston, a demonstration at an appearance of Mrs. Nixon resulted
in some personal injuries to bystanders and extensive property dam-
age (e-.g.. smashing 'of windshields, the slashing of tires, and the burn-
ing of an automobile.) The “Nixon campaign car” suffered much dam-
age and “(expletive deleted) Nixon” was scratched in the paint all
over the car. 1
64 10 Hearings 4265.
95 The letter actually said “Cannocks.”
96 Ken Clawson, named In some accounts as the writer of the letter, denied having any-
thing to do with the letter In an interview (Aug. 14, 1973).
97 See, e.g.. New York Times, Feb. 27, 1972, p. 54 ; and Time, Mar. 13, 1972. p. 20.
98 See, e.g., letters in committee files from John McEvoy and Robert Strauss and inter-
views with former McGovern campaign workers.
99 12 Hearings 5007-5018.
1 12 Hearings 5110-5115 ; 12 Hearings 5116-5118 ; 12 Hearings 4996-5007.
208
In Tulsa, Okla., demonstrators chanted slogans during a campaign
speech by President Nixon in an attempt to disrupt the President’s
rally. 2 Testimony from the Tulsa CRP youth coordinator alleged that
the demonstration had been organized by the local McGovern cam-
paign college co-ordinator. 3
The committee also received testimony that demonstrators in Fresno,
Calif., some of whom carried McGovern campaign signs, shouted down
potential Republican speakers with obscenities and abusive language. 4
In Tampa, Fla., testimony indicates that a group of demonstrators
shouted in unison and heckled a speech by then Vice President Agnew. 5
In Chicago, 111., Agnew’s appearance was “continually disturbed by
large groups of unruly demonstrators.” 6
An appearance by President Nixon in Atlanta, Ga., provoked a dem-
onstration by about 75 individuals. The demonstrators apparently
engaged in shouting obscenities and their “pushing and shoving”
caused some observers to be concerned “for the President’s safety.” 7
In Maine, the campaign appearance of then Vice President Agnew
was met by a large crowd of demonstrators protesting against the
war. There was testimony before the committee that some individuals
threw cans and plastic bags filled with tomato juice at Republican
delegates and at Vice President Agnew. 8
In New York City, the Nixon reelection campaign offices were har-
rassed by demonstrators who dumped cockroaches in the offices and
threw paint on volunteer Nixon workers at a storefront. 9 In Columbus,
Ohio, an appearance by then Vice President Agnew was met by a
large demonstration in which demonstrators threw rocks and other
objects at both guests and police, one of which struck Agnew’s car’s
window “directly behind where the Vice President was seated.” 10
The committee also received testimony indicating that high level
McGovern campaign personnel participated in the organization of a
demonstration at the campaign appearance of President Nixon at the
Century Plaza Hotel in Los Angeles on September 27, 1972.
Fred Taugher, the southern California campaign coordinator for
McGovern, testified that at a meeting between himself, Rick Stearns,
the McGovern western campaign coordinator, and two other Mc-
Govern workers, it was decided that the McGovern phone banks in the
Los Angeles headquarters “would be available to the sponsors of the
demonstration” in order to call individuals “to encourage them to
attend the demonstration.” 11 Stearns testified that he was aware of
planning for the demonstration and that he had no objections to Mc-
Govern staffers attending the demonstration, but that he recalled no
requests to the campaign to provide any assistance for the demon-
stration. 12
Taugher testified that the McGovern phone banks were used on two
successive nights by demonstration organizers, and that leaflets an-
nouncing the demonstration were distributed in about half of the
2 12 Hearings 5165 — 72 .
3 12 Hearings 5171 - 72 .
4 12 Hearings 5051 - 5054 , 4947 - 4963 .
6 12 Hearings 5074 .
* 12 Hearings 5082 - 83 .
7 12 Hearings 5076 - 81 .
8 12 Hearings 5084 - 5094 .
9 12 Hearings 5151 - 5152 .
10 12 Hearings 5153 - 5158 .
11 11 Hearings 4539 .
12 11 Hearings 4571 .
209
McGovern storefronts in the Los Angeles area. 13 Use of the phone
banks was terminated, Taugher testified, because they were needed to
organize a rally for Senator McGovern the following week.
In response to inquiries from the press about the use of the phone
banks, McGovern press spokesman Fred Epstein told reporters, “I
don’t know who allowed them to use the phones or who told them to
stop * * * It probably was some overzealous person in the cam-
paign.” 14 Taugher testified that the press statement left “the wrong
impression.” 13
About 3,000 individuals demonstrated against President Nixon at
Century Plaza, 16 but the demonstration was peaceful by all accounts. 17
The use of the resources of a political campaign, however, to or-
ganize a large demonstration against an opponent raises questions of
propriety.
H. R. Haldeman, John Ehrlichman and Rob Odle all testified that
the frequency and intensity of demonstrations in the 1972 campaign
were a cause of major concern both within the White House and
within the Committee To Re-Elect the President. 18 Finally, the com-
mittee received both testimony and extensive documentation describ-
ing some of the violent demonstrations which occurred in Miami
Beach, Fla., during the Republican Convention week, August 19 to
21, 1972. Congressman Tim Lee Carter testified before the committee
and outlined some instances of physical violence to which he and his
wife were subjected while attending the Republican Convention. 19
Congressman Carter also testified about a number of personal injuries
and property damage that he observed while attending the Republican
National Convention. 20
The committee also received in evidence the “Chronological Log of
Events” prepared by the Miami Beach Police Department, which re-
cites the number of incidents of violence which were perpetrated on
delegates and their families by demonstrators in Miami. 21 These in-
cidents included, for example, the pelting of delegates with eggs and
rocks, slashing tires, attempts to set buses filled with delegates on fire,
stuffing potatoes in exhaust pipes, smashing windows, throwing ignited
papier m ache bombs into the convention compound, tear gas grenades
thrown by demonstrators, shots fired at police officers, and demon-
strators marching on Convention Hall attired with helmets, gas masks,
and night sticks. 22 As a result of these tactics, more than 1,200 arrests
were made in 2 days during the convention week. 23
A delegate from South Carolina described in a letter to the com-
mittee that the entire South Carolina delegation to the convention
had stones thrown at them as they boarded their bus to proceed to the
Miami Convention Hall on the last evening of the convention. 24 In
addition, the South Carolina delegate described the slashing of the
13 11 Hearings 4540-41.
14 11 Hearings 4549.
15 11 Hearings 4550.
10 11 Hearings 4558.
17 11 Hearings 4559. Pat Buchanan, however, testified that this demonstration was a
“near violent [demonstration] denying the President of the United States a right to speak.'’
(10 Hearings 3942) Lieutenant Hickman testified that the demonstration did not deny the
President the right to speak. (11 Hearings 4560.)
18 (See 6 Hearings 2502; 7 Hearings 2874-2876; 12 Hearings 5188-5192.
18 12 Hearings 4986-4996.
20 Ibid.
21 12 Hearings 5219-5257.
22 Ibid.
23 For full exposition of the events, see 12 Hearings 5196-5264.
24 12 Hearings 5262.
35-637 0 - 74 - 16
210
bus’ tires, the destruction of the gas lines of the bus by the demon-
strators, and the physical abuse to which the delegates were subjected :
* * * we were pushed and shoved, struck by eggs, stones,
and fists and spit on, we found ourselves separated into twos
and threes. They tore clothing and screamed obscenities.
The slogans many of them chanted called for either ending
the war in Vietnam or dumping President Nixon. In the
confusion my wife and I were temporarily separated. I fin-
ally was able to rescue her from a doorway where she was
trapped by the mob. Her dress had been torn and she was
hysterical * * * 25
F rom the evidence in the committee’s records, it appears that most
of the demonstrators in Miami Beach during the Republican Conven-
tion were part of demonstrations against the war. 26 Any act of vio-
lence directed at participants in the political process has no place in
the American political system.
It should be noted here that the Select Committee received a letter on
June 8, 1973, from John H. Davitt, Chief of the Internal Security
Section of the Criminal Division of the Department of Justice which
stated that neither the ISD files nor the Federal Bureau of Investiga-
tion had any information which linked any Democratic candidate in
the 1972 campaign to any criminal acts or any conspiracies to commit
unlawful or disruptive acts. 27
2. CAMPAIGN VIOLENCE AND HARASSMENT
Another problem in the 1972 Presidential campaign was the vio-
lence directed against CRP and Republican campaign offices in
various cities. In Phoenix, Ariz., the CRP headquarters building was
gutted by fire resulting from arsonists splashing some 5 gallons of
gasoline throughout the headquarters. 28
The affidavit of George Willeford, Jr., described a fire set in the
State Republican headquarters offices in Austin, Tex. in the spring
of 1972. 29 Other affidavits describe attempted arson against CRP
headquarters in Albuquerque and New Hampshire. 30 Further affi-
davits describe gunshots being fired into campaign headquarters of
the CRP in Massachusetts and in Pennsylvania. 31 In Springfield,
Mass., the room into which the shot was fired was full of people but
no one was injured. 32
Other acts of destruction directed against the 1972 campaign to
reelect President Nixon included the smashing of plate glass win-
dows, 33 the spraying of vulgar anti-Nixon signs on buildings and
windows 34 and alleged break-ins to the campaign headquarters where
campaign property was destroyed. 35
25 12 Hearings 5263.
26 12 Hearings 5198.
27 8 Hearings 3321.
28 12 Hearings 5034-5047.
29 12 Hearings 5176.
30 See 12 Hearings 5143-5146 ; 5127-5142.
* See 12 Hearings 5116-5119 ; 5173.
32 12 Hearings 5117.
33 12 Hearings 5097-5101.
34 12 5147-50.
30 See, e.g., affidavit of Chester Oman stating that motor oil was poured on Nixon cam-
paign literature, 12 Hearings 5125-26; affidavit of Ella Jacques stating that Dayton CRP
headquarters were broken into and McGovern signs printed on the walls, 12 Hearings 5163 ;
and affidavit of Toni Greenwood stating that the Washington. D.C., Democrats for Nixon
headquarters was occupied by 75-100 demonstrators and campaign literature destroyed
and pro-McGovern literature left in its place, 12 Hearings 5185-87.
211
3. CAMPAIGN LITERATURE
President Nixon’s reelection campaign was also subjected to some
improper and distasteful literature. For example, pamphlets and
brochures appeared in the campaign which ranged from cartoons de-
picting President Nixon with fangs dropping bombs on people to
posters with crude sexual puns. 36 Other examples of literature directed
against the President’s campaign efforts, usually by antiwar groups,
may be found in the committee record. 37
A piece of inappropriate campaign literature which bears mention
was the unimaginative piece distributed in California which said
“Nixon is treyf,” and which went on to state: “Thanks to modern
technology Nixon brings the ovens to the people rather than the people
to the ovens.” 38
In addition, Michael Heller testified that he observed this pamphlet
both in the McGovern Fairfax headquarters in Los Angeles in Septem-
ber 1972, as well as being distributed in the streets by McGovern cam-
paign workers. 39
Paul Brindze, head of three West Side Los Angeles offices for Mc-
Govern, testified that he directed a young volunteer in the McGovern
offices to mimeograph off 3,000 copies of the pamphlet “Nixon is
Treyf,” 40 Brindze also testified that at the suggestion of the southern
California McGovern coordinator, the McGovern campaign decided
to place the blame for the distribution of this pamphlet on the 16-year-
volunteer who had merely mimeographed the pamphlet at the direction
of campaign superiors. As a result, the 16-year-old volunteer was
terminated, and Paul Brindze remained in his capacity as the director
of one of the McGovern campaign local Los Angeles offices. 41
III. KECOMMENDATIONS
The recommendations which follow are an effort by the Select
Committee to help prevent the recurrence of improper, unethical, and
illegal activities that took place in the 1972 campaign. Of central im-
portance to these recommendations is the creation of an independent
Federal Elections Commission, similar to the proposal in S. 3044
already passed by the Senate, with full enforcement and subpena
powers to monitor and enforce the election laws. This proposal is dis-
cussed more fully elsewhere in this report. 42
1. The committee recommends that Congress enact criminal leg-
islation to prohibit anyone from obtaining employment, voluntary
or paid, in a campaign of an individual seeking nomination or
election to any Federal office by false pretenses, misrepresenta-
tions, or other fraudulent means for the purpose of interfering
with, spying on, or obstructing any campaign activities of such
candidate. Furthermore, such legislation should make it unlawful
for anyone to direct, instruct, or pay anyone to join any such
campaign by such means or for such purposes as are outlined
above.
*> 12 Hearings 5081, 5198, 5130, 5217.
37 12 Hearings 5022, 5024, 5081, 5216-17.
38 12 Hearings 5022-24, The flyer also promoted an upcoming demonstration against the
President. Note that “treyf” is a Yiddish term meaning “not kosher.” The area in Los
Angeles where the pamphlet was distributed was primarily Jewish.
39 12 Hearings 4967.
40 12 Hearings 4977.
41 12 Hearings 4981-85.
42 See Chapter 4 below.
212
Discussion. New legislation is needed to prevent the infiltration of
Presidential and Federal campaigns. The activities of Donald Segretti,
Robert Benz, Michael McMinoway, Elmer Wyatt, Tom Gregory, and
others are abundant documentation of the numerous infiltration efforts
in the 1972 campaign.
The dangers of this infiltration range from the confusion and sus-
picion resulting from leaked information to the opponents or news-
papers to more systematic disruption and sabotage of the opposition
campaign.
Infiltration occurred in the 1972 campaign which ranged from plac-
ing a false name on a mailing list of the Democratic National Party
to the systematic infiltration of Michael McMinoway in the various
Democratic primary campaigns.
It is essential for a campaign or organization to have free and open
discussion, without fear that one of the conversants is a spy from
the opposition. Every campaign requires some maintenance of con-
fidentiality : sensitive matters must be examined; personalities dis-
cussed ; and confidential policy must be deliberated. One of the pur-
poses of the legislation outlined above is to free political campaigns
from infiltrators who report systematically back to the opposition
campaign.
The proposed legislation would not ban a “Chapman’s friend” or
a reporting arrangement where the reporter does not actually join
another campaign. While this practice may not be ethically pure, this
legislation is aimed at ridding campaigns of the unhealthy deception
of actual infiltrators. Where the individual does not actually work
himself into the confidences of an alien campaign, the potential harm
to the campaign is diminished even though deception still exists.
2. The committee recommends that Congress enact legislation
to make it unlawful to request or knowingly to disburse or make
available campaign funds for the purpose of promoting or financ-
ing violations of Federal election laws.
This recommendation is an effort to deter individuals with control
over campaign funds from blindly and automatically providing money
for campaign activities whenever they are so instructed. For example,
Herb Kalmbach, the custodian of leftover 1968 campaign funds, funded
Tony Ulasewicz’s activities for nearly 3 years as well as the travels
and illegal activities of Donald Segretti. A statute such as the one
outlined above would force people w r ith control over campaign funds
to inquire more fully about the expenditures that were requested,
since they would be held criminally liable for funds spent for illegal
purposes.
In addition, this recommendation seeks to deter individuals working
in political campaigns from requesting campaign funds in order to
promote illegal activities during Federal campaigns. Such a statute
as is recommended above would be an effective deterrent to many
activities like those occurring in the 1972 campaign.
3. The committee recommends that Congress enact new legisla-
tion which prohibits the theft, unauthorized copying, or the taking
by false pretenses of campaign materials, documents, or papers
not available for public dissemination belonging to or in the
custody of a candidate for Federal office or his aides.
Discussion. The evidence of Donald Segretti, Robert Benz, Doug
Kelly, Jack Buckley, Elmer Wyatt, Michael McMinoway, Tom
213
Gregory, and Howard Hunt clearly establish the need for a larceny
statute which can be used to prevent such unauthorized takings in a
Federal election. Present “larceny by false pretense” statutes in most
States require the object that is taken to be “a thing of value.” Since
papers are generally not thought to have value in the sense that the
term is used in the existing statute, a new Federal election larceny
statute is necessary to prosecute such violations.
4. The committee recommends that Congress should make it
unlawful for any individual to fraudulently misrepresent by
telephone or in person that he is representing a candidate for
Federal office for the purpose of interfering with the election.
Present Federal criminal legislation, 18 U.S.C. § 612, requires that
campaign literature disclose the names of individuals and organiza-
tions responsible for its publication and distribution. 43 However, there
were numerous cases of false, deceptive, and misleading literature pub-
lished and distributed in the 1972 campaign by fraudulent or non-
existent sponsors. The existence of this literature in the 1972 cam-
paign demonstrates the need for better publication and more rigorous
enforcement of the existing Federal law in this area. The proposed
new independent Federal Elections Commission would be the appro-
priate institution to accomplish these objectives of better publicity
and more rigorous enforcement.
It is important to eliminate this form of deception from Federal
campaigns since voters have the right, to know whether the pamphlet
they receive, the advertisement they read, or the expression of sup-
port they observe represent the bona fide views of his fellow citizens.
Manipulation of voters’ views through misrepresentation has no place
in the democratic process. _
Similarly, late night calls to voters of a State from a nonexistent
group purporting to support a particular candidate also have no place
in the electoral process. Thus, this recommendation seeks to deter
other kinds of misrepresentation in political campaigns not presently
covered by existing legislation. Fraudulent, door-to-door canvassing
and fraudulent phone calls to voters “on behalf” of a candidate are
the kinds of misrepresentation that have no place in Federal cam-
paigns. This recommendation is an effort to help deter such behavior.
Summary. The improper and unethical activities that occurred in
the 1972 campaign will not be eliminated merely by new legislation.
Although law seeks both to shape and reflect the moral and ethical
values of individuals, new laws cannot fully substitute for such
individual values. Therefore the political process and government
itself must attract individuals of the highest moral and ethical stand-
ards if the improper activities that occurred in the 1972 Presidential
campaign are to be eliminated completely in the future.
43 Section 612 reads : Whoever willfully publishes or distributes or causes to be published
or distributed, or for the purpose of publishing or distributing the same, knowingly deposits
for mailing or delivery or causes to be deposited for mailing or delivery, or, except in cases
of employees of the Postal Service in the official discharge of their duties, knowingly trans-
ports or causes to be transported in interstate commerce any card, pamphlet, circular,
poster, dodger, advertisement, writing, or other statement relating to or concerning any
person who has publicly declared his intention to seek the office of President, or Vice
President of the United States, or Senator or Representative in, or Delegate or Resident
Commissioner to Congress, in a primary, general, or special election, or convention of a
political party, or has caused or permitted his intention to do so to be publicly declared
which does not contain the names of the persons, associations, committees, or corporations
responsible for the publication or distribution of the same, and the names of the officers of
each such association, committee, or corporation, shall be fined not more than $1,000 or
imprisoned not more than one year, or both.
215
Exhibit No. 2
:! SECURITY PACIFiC NATIONAL BANK ^
Newport Center Office
fj 550 Newport Center Drive
ji Newport Beach, Calif. 92660
HERBERT W. KALMBACH
ATTORNEY AT LAW N2 223
SUITE NO. 90 0, NEWPORT FINANCIAL PLAZA
550 NEWPORT CENTER DRIVE <7 1 4) 644-4 !1 1 September 27 _ |*j TloOJS
NEWPORT BEACH, CALIFORNIA 92660 •' " ~~ ’ 122;
Nine Hundred Seventeen and no/100-
r ' W”
Anthony T. Ulasewicz
--Dollars $_:_91?.00
HERBERT W. KALMBACH
TRUSTEE. ACCOUNT FOR CLIENTS
j; SECURITY PACIFIC NATIONAL BAN K §§
ji Newport Center Office
550 Newport Center Drive
| Newport Beach, Call/. 92660
HERBERT .W. KALMBACH
ATTORNEY AT LAW
SUITE NO. 9 CO, NEWPORTTINANCiAL PLAZA
550 NEWPORT CENTER DRIVE ,(714; 644-4 1 t t
NEWPORT BEACH, CALIFORNIA 92.660
N° 104 ji
Auguot; 14, • .o9 9-flgp- |j
, AY NINE HUNDRED T'c'ENTY-THREE AIK !) 3/100*" * * * « *..* * *_Doli,aks J!**923.83**
# " n “
HERBERT W. KALMBACH
TRUSTEE ACCOUNT FOR CLIENTS
ANTHONY T, ULASEWICZ
000001 2 IS 3,1
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JEFFRIES BANKNOTE COMPANY
Financial Printers, Securities Engravers, Color Lithographers j Telephone (213) 746-1611
1330 West Pico Boulevard, Los Angeles, California 90015 j
217
6/28/69
Exhibit No. 3
ULASEWICZ TRAVELS
Holiday Inn, D. C. , $22. 29.
JUNE, 1969
7/ 7/69
Eastern shuttle, N. Y. -D. C.
JULY, 1969
7/ 8/69
1/
Eastern shuttle, D. C. -N. Y.
7/ 8/69
Roger Smith Hotel, D. C. , $34. 20
7/14/69
Roger Smith Hotel, D. C. , $6. 30
2/
7/19/65 -
Eastern shuttle, — ■ N. Y. -Boston.
7/19/69 to 7/23/69 Boston, Avis, 327 miles
7/19/69
H. Johnson, Kingston, Mass. $65, 10
7/20/69
Woods Hole- Martha’s Vineyard (r. t. )
7/20/69
Edgar town- Chappaquiddick (r. t. )
7/21/69
Woods Hole, Martha’s Vineyard (r. t. )
7/23/69
Eastern shuttle — Boston-N. Y.
7/30/69
Eastern shuttle ~ N. Y. -Boston
7/30/69
Howard Johnson, Kingston, Mass., $21.00
7/30/69
Boston, National, 361 miles
AUGUST, 1969
8/ 3/69 Eastern shuttle, N. Y. -Boston
J J shuttle tickets do not always indicate travel
direction; date not reliable as indicator of travel
date.
2/ probably misprint, serial number indicates
1969 ticket.
218
AUGUST, 1969
8/ 5/69 Panorama Motor Lodge, "Bourne", Mass.
8/ 5/69 to 8/9/69 N. Y. , National, 679 miles
8/ 6/69 Martha's Vineyard Motor Inn, $27.48
8/7/69 Howard Johnson, Warwick, R.I., $21.00
8/12/69 Eastern shuttle, N. Y. -Boston
8/ 12/69 to 8/ 15/69 Boston, National , 278 miles
8/12/69 to 8/ 14/69 Mansion House, Martha's Vineyard, $57.09
8/15/69 Eastern shuttle, Boston-N. Y.
8/26/69 Eastern shuttle, N. Y. -Boston
8/27/69 Martha's Vineyard Motor Inn, $23.26
8/29/69 Eastern shuttle, Boston-N. Y.
SEPTEMBER, 1969
9/ 2/69 Eastern shuttle, N. Y. -Boston
9/ 2/69 to 9/4/69 Boston, National, 182 miles
9/3/69 Howard Johnson, $33.90. Boston.
9/4/69 Eastern shuttle, Boston-N. Y.
9/ 4/69 Roger Smith Hotel, D. C. , $6. 30
9/ 5/69 (2 tickets) Eastern shuttle, N. Y. - Wash. , D. C.
9/12/69 (2 tickets) Eastern shuttle, Wash. , D. C. -N. Y.
9/18/69 American, N. Y. -L. A.
219
SEPTEMBER, 1969
9/18/69 L.A. National , 558 miles
9/18/69 Beachtown Motel, Longbeach, Cal., $16.50
9/19/69 "Royal Inn Wharf", "DCCEAEBA", $16.80
9/20/69 Sail Inn, Newport Beach, $10.50
9/21/69 Holiday Inn, San Diego, $29.40
9/23/69 Holiday Inn, Boston, $48.62 -
9/25/69 to 9/27/69 N. Y. , National , 478 miLes
? to 9/29/69 Wash., D. C. , National , 46 miles
9/29/69 (2 tickets) Eastern shuttle, Wash. -N. Y,
OCTOBER, 1969
10/ 5/69 Motel Madison, Boston, $15.69
10/6/69 Eastern shuttle, N. Y. -.Boston
10/ 6/69 10/8/69 Boston, National Car, 197 miles
10/ 8/69 Eastern shuttle, Boston to Wash. , D. C.
10/12/69 Roger Smith Hotel, $6.30
10/15/69 (2 tickets) Eastern shuttle, N. Y. -Boston
NOVEMBER, 1969
11/12/69 Eastern shuttle, N. Y. -Wash. , D. C.
11/15/69 (date altered to 1 6) Roger Smith, $176.71
11/15/69 Eastern shuttle, Wash. , D.C. -N. Y.
11/17/69 Eastern shuttle, N. Y. -Wash. , D.C.
220
DECEMBER, 1969
12/ 3/69 American, N. Y, -L. A, -Cleveland-N. Y.
12/ 3/69 Avis, L. A. , 150 miles
12/ 3/69 Holiday Inn, West Covina, Cal., $25.20
12/12/69 (2 tickets) N. Y. -D, C. Eastern shuttle
12/21/69 to 12/30/69, Boston, National, 325 miles
12/22/69 American, N. Y. -Cleveland-N. Y.
12/23/69 Holiday Inn, Cleveland, $14.32
12/23/69 to 12/24/69 (unclear) Beria, Ohio, National , 40 miles
12/27/69 Eastern shuttle, N. Y. -Boston
12/29/69 Holiday Inn, Manchester, New Hampshire, $11.75
12/30/69 Boston-N. Y. , Eastern shuttle
JANUARY, 1970
1/ 3/70 Eastern shuttle, N. Y. -Boston
1/ 3/70 to 1/8/70 Boston, Avis , 309 miles
1/ 3/70 Panorama Motel, Bourne, Mass. , $10.57
1/ 4/70 Ferry receipt signed "Ferguson", Woods Hole to
Vineyard Haven
1/ 6/70 to 1/9/70 N.Y., National , 570 miles
1/ 7/70 Howard Johnson, Boston, $18. 00
1/13/70 (2 tickets) Eastern shuttle Boston, N. Y.
1/13/70 Eastern shuttle, N. Y. -D. C.
1/27/70 Eastern shuttle, N. Y. -D. C. (2 tickets)
1/29/70 Eastern shuttle, N.Y. -D.C. (2 tickets)
221
2/ 4/70
2/ 4/70
2/ 7/70
2/ 9/70
2/14/70
2/18/70 (
2/19/70
2/24/70
3/ 3/70
3/ 3/70
3/ 5/70
3/10/70
3/10/70
3/12/70
3/12/70
3/12/70
3/13/70
3/18/70
3/16/70
FEBRUARY, 19 70
Eastern N. Y. -Miami-N. Y.
Miami, National , 204 miles
Holiday Inn, Coral Gables. $75, 31
(? ) Eastern shuttle, N. Y. -Wash. , D. C.
(2 tickets) Eastern shuttle, N. Y. -D.C.
?) Ramada Inn, Milwaukee, Wis. $40.97
N. Y. -Mil. -N. Y. , United
Eastern shuttle, N. Y. -D. C. (2 tickets)
MARCH, 1970
Rest. (? ) Flushing, N. Y. $40. 05
Eastern shuttle, N. Y. -D.C. (2 tickets)
Northwest, N. Y. C. -M. S. P. -M. O. T. -G. F. K. , FAR.
WAS. (? ) $233. 10
Minot Daily News, $6.50, S-$l. 00 receipt, with name
Dick Dobson, 701-838-3341.
MN, N. Dakota, $26. 74
2:30 p. m. to 9:30 p. m. St. Louis Park, Minn., National ,
252 miles
North Central, Grand Forks, N. D., G (? )-MOT-GMC (? )
Holiday Inn, CAFE (?) N.D. $33,13
MN, N. D. $11. 12
Town House Motel, Fargo, N.D. $67.01
Northwest Airlines, Fargo CTQ (? )
222
APRIL, 1970
4/2/70 N. W. Air., N. Y. -Bangor-PWM-N. Y.
4/ 6/70 to 4/9/70 Bangor, National, 160 miles
4/ 6/70 Holiday Inn, Bangor, Maine $12, 60
6 /
4/6/70 Holiday Inn, AUG (? ) $12.60 AUGUSTA, MAINE
4/ 7/70 Sheraton, Portland, Me. $36. 76
4/ 8/70 Press Herald-Evening Express, receipt for
back copies, $3. 57. (paid Ap. 9)
4/ 9/70 East. Shuttle, N. Y. -D. C. (2 tickets)
4/13/70 East, shuttle, N. Y. -Boston
4/13/70 Madison Motel, Boston. $33.50
4/13/70 Eastern, Bost. -DCA (?)
4/16/70 Howard Johnson, Kingston, Mass. $13.74
4/16/70 Manger Hay Adams, D.C. $22.36
4/16/70 East. Shuttle, N. Y. -D. G.
4/22/70 East. Shuttle, N. Y. -D. C. (2 tickets)
4/27/70 East. Shuttle, N. Y. -D. C. (2 tickets)
4/29/70 East. Shuttle, N. Y. -D. C. (2 tickets)
4/29/70 Northeast Air. Speed ticket, Boston-D. C.
MAY, 1970
5/10/70 to 5/12/70 N. Y. , National, 622 miles
5/ 9/70(11 and 12 added) Holiday Inn, Dedham, Mass. $23.38
7/
5/12/70 Receipt to T. A. Watkins for "campaign contributions. "
6/ AUG. circled on receipt; it‘s Augusta, Maine.
7/ this address listed as Fabric Co. in New York.
223
5/14/70
5/21/70
5/21/70
5/21/70
5/25/70
5/26/70
6/17/70
6/17/70 to
6/19/70
6/22/70
6/30/70
7/ 5/70
7/ 7/70
7/13/70
7/21/70
MAY, 1970
East. Shuttle, N. Y. -D. C. (2 tickets)
N. Y. -Phoe. -N. Y. air ticket.
Ramada Inn, Phoenix, Arizona $12. 58
Phoe., National , 50 miles.
Receipt, T. Watkins. 5/25 to 5/31 Rm. # 4, unknown
location.
East. Shuttle, N. Y. -D. C. (2 tickets)
JUNE, 1970
East. Shuttle, N. Y. -Boston
6/19/70 Boston, National, 160 miles
East. Shut. N. Y. -Boston
East. Shuttle, N. Y. -D. C. (2 tickets)
Am. Air, Albany (?)
JULY, 1970
American Air. , Albany-Ord-ABq. (? )
TWA re-route
East. Shuttle, N. Y. -D. C. (2 tickets)
7/27/70 N. Y. , National, 1059 miles
Ferry W. Hole to V. Haven, note 5 or 6 passengers
crossed out.
7/26/70
224
AUGUST, 1970
8/11/70 Eastern Shuttle, N. Y. -D. C. (2 tickets)
8/13/70 Ramada Inn, Fresno, Cal, $65.56
8/14(?)/70 Eastern Shuttle, N. Y. -D.C. (2 tickets)
8/14/70 TWA, N. Y, -L. A, - Fresno (? )-N, Y.
8/15/70 United, L. A. -Fresno
8/15/70 to 8/18/70 Fresno, National, 438 miles
8/17/70 Ramada, L. A. $14.51
8/17/70 Fresno, L. A., United.
SEPTEMBER, 1970
9/ 2/70 Sheraton, Boston $51.11
9/ 3/70 Eastern Shuttle, N. Y. -Boston {2 tickets)
9/ 5/70 Boston, National , 484 miles
9/9/70 Penn. R. R. , Wash. -Baltimore (2 tickets) N. Y.
9/ 9/70 Allegany Air. , Philadelphia-D. C.
9/11/70 Baltimore Hilton $117.39
9/14/70 Baltimore to Washington, Penn. R.R.
9/15/70 Baltimore car rent. National to 9/16/70, 270 miles
9/22/70 Eastern Shuttle, N. Y. -Washington
9/22/70 Eastern , Washington -Miami -Washington
9/25/70 Eastern Shuttle, N. Y. - Washington
9/25/70 Holiday Inn, Ft. Lauderdale, Fla. $43.28
9/29/70 Penn. Central, N. Y. to Philadelphia
225
OCTOBER, 1970
10/ 3/70 Holiday Inn, Philadelphia, Penn. $38.03
10/ 3/70 to 10/5/70 Philadelphia, National, 147 miles
10/5/70 Eastern Shuttle, N.Y. -D. C.
10/25/70 Eastern, N. Y. -Jacksonville -Tallahassee, Fla.
10/25/70 to 10/27/70 Tallahassee, National , 61 miles
10/26/70 Eastern, Tallahassee-Atlanta-Washington, D. C.
10/27/70 Holiday Inn, Tallahassee, Fla. $28. 07
10/27/70 Eastern Shuttle, D. C. -N. Y.
NOVEMBER, 1970
11/ 5/70 Eastern Shuttle, N. Y. -D. C.
12 /
11/ 7/70 (?) Mansion House, M. V. Mass. $34.71
11/25/70 Eastern Shuttle, N. Y. -D. C.
DECEMBER, 1970
12/2/70 Polcari's, Inc., Boston, Mass. $9.50
12/2/70 Hotel Madison, $13.68
12/2/70 Eastern Shuttle, N.Y. -Boston
12/ 2/70 to 12/4/70 Boston, National , 155 miles
12/3/70 (? ) Eastern Shuttle, N. Y. -D. C,
12/ 3/70 Holiday Inn, Hyannis, Mass. $25.25
12/(?)/70 Eastern Shuttle, N. Y. -Boston
12/13/70 Eastern Shuttle, N. Y. -D. C. (2 tickets)
12/18/70 Penn. Central, N.Y. to Baltimore
12/21/70 Holiday Inn, Baltimore, $75.49
12/ could be 1/7/70
35-687 0 - 74 - 17
226
DECEMBER, 1970
12/21/70 Penn. Central, Baltimore-N. Y. ,
12/26/70 Eastern Shuttle, N.Y. -Boston
13/
12/28/70 Thomas A. Ulasewicz, Boston, Avis , 249 miles
12/28/70 Holiday Inn, Dedham, Mass.
12/28/70 "Watkins" vote list receipt
12/30/70 Holiday Inn, Boston, $20.00
12/30/70 N.Y. -Boston
12/28/70 to 12/30/70, Boston, National , 84 miles
JANUARY, 1971
1 / 5/71 Penn. Central, N. Y. -D. C.
1/ 7/71 Holiday Inn, Hyannis, Mass. $70.00
1/14/71 Penn. Central, N. Y. -D. C.
1/21/71 Holiday Inn, Philadelphia. $80.47
1/16/71 Penn. Central, N. Y. -Philadelphia (r. t. )
FEBRUARY, 1971
2/ 1/71 Penn. Central, Albany (r. t. )
2/ 1/71 Dewitt Clinton, Albany $58.38
2/12/71 N. Y., National , 141 miles
2/25/71 N. Y. -D. C. , Penn. Central
2/26/71 D. C. -N. Y. , Penn. Central
2/28/71 N. Y. -Rochester
227
3/ 2/71
3/ 2/71
3/ 2/71
3/ 3/71
3/ 3/71
3/ 4/71
4/ 8/71
4/ 7/71
4/ 8/71
4/ 9/71
4/10/71
4/12/71
4/23/71
4/24/71
4/25/71
4/28/71
5/ 4/71
5/11/71
5/13/71
MARCH, 1971
Holiday Inn, Rochester
Rochester-Schenectady, Penn. Central
Albany-N. Y, , Penn. Central
Albany, National , 126 miles
(changed to 4) Dewitt Clinton Hotel, Albany, $59. 19
Roger Smith Hotel, Washington, D. C. $47.49
APRIL, 1971
N. Y, -Birmingham, Eastern
(changed to 8) Holiday Inn, Hyannis, Mass. $118.29
Downtowner Motel, Birmington, Alabama $61. 64
Eastern, Birmingham-Atlanta- Washington, D. C.
Roger Smith, $22. 23
American Jet Express, D. C. -N. Y.
Penn. Central, N. Y. -D. C. E (indistinct)
N. Y. -Tucson. Arizona-N. Y. , TWA
Eastern Shuttle, N. Y. -D. C.
Ramada, Tucson, Ariz. , $69. 12
MAY, 1971
Penn. Central, N. Y. -D. C.
Penn. Central, N. Y. -D. C.
D. C. -N. Y. , Penn. Central
5/28/71
N. Y. -D. C. , Penn. Central
228
JUNE, 1971
6/ 2/71 Flushing, National, $74. 14
6/ 6/71 Eastern, N. Y. -Jacksonville, Fla.
6/ 6/71 Robert Meyer Hotel, Jacksonville, Fla. $66.98
6/ 8/71 JacksonvilLe-Atlanta - D. C. , Eastern
6/9/71 D. C. -N. Y., Eastern
6/15/71 Eastern, N. Y. -D. C. (either direction)
6/15/71 Eastern, D. C. -N. Y.
6/16/71 N. Y. , National, 1896 miles
6/24/71 Eastern, D. C. -N. Y.
6/24/71 Eastern, N. Y. -D. C.
6/27/71 Sheraton, Hyannis, Mass. $114.25
AUGUST, 1971
8/3/71 N. Y. -D. C. -N. Y.
8/ 5/71 Nautilus Motor Inn, Woods Hole, $101.90
8/16/71 Sheraton, Hyannis, Mass. $110.69
8/19/71 Holiday Inn, Groton, Conn. $39.96
(Am. X. charge) $78. 85
8/21/71 Am. Air, N. Y. -L. A. -Honolulu-N. Y. (r. t. )
SEPTEMBER, 1971
9/ 8/71 Holiday Inn, Hyannis, Mass. $62. 84
9/ 9/71 Holiday Inn, Norwalk, Conn. $82. 70
229
SEPTEMBER, 1971
9/13/71 Eastern, N. Y, -D. C. -N. Y.
9/23/71 Eastern, N. Y. -D. C. -N. Y.
9/24/71 N. Y. -Roanoke-N. Y.
9/25/71 to 9/26/71 Roanoke, National, 113 miles
9/26/71 Holiday Inn, Roanoke, Virginia $22.77
9/26/71 N. Y. -L. A. , United
9/28/71 Century Plaza Hotel, L.A. $113.23
OCTOBER, 1971
10/10/71 United, N. Y. -San Diego-N. Y.
10/10/71 to 10/11/71 L.A., National, 45 miles
10/11/71 United, San D. -L.A.
10/12/71 United, L.A.-N. Y.
10/11/71 through 10/13/71 Holiday Inn Statement, L.A. $68.95
10/11/71 to 10/13/71 L.A., National, 75 miles
NOVEMBER, 1971
11/14/71 to 11/15/71 Holiday Inn, Hyannis, Mass. $40.78
11/15/71 Woods Hole to Vineyard Haven. Ferry
11/15/71 Return Ferry, Woods Hole.
11/17/71 "Tom Watkins" receipt for back issues (of a newspaper?)
11/18/71 Northeast, N. Y. -Manchester, New Hampshire
11/18/71
Manchester, N. H. , Avis, 150 miles
230
NOVEMBER, 1971
11/18/71 to 11/20/71 "T. Watkins" N. H. Highway Hotel, $38.90
11/29/71 Gas.
11/ ? Gas.
11/29/71 through 11/30/71 Holiday Inn, White June, Vermont. $32.00
DECEMBER, 1971
12/ 1/71 New Hampshire Highway Hotel, Concord. $27.80
12/ -- Gas
231
Exhibit No. 4
LAW OFFICES
KALMBACH, DE MARCO, KNAPP & CHILUNSWORTH
MEMORANDUM
FILE: J.D.E. - Edward T. Stanley Data: July 8, 1969
To: File
From: Herbert W. Kalmbach
At 9:15 a.m. this morning, I talked to Tony Ulasewicz
and we agreed on the following:
1. That he will use his American Express credit card
for air travel and other necessary expenses.
2. He will make application for a second American Ex-
press credit card in the name of Edward T. Stanley and will ad-
vise the American Express Company that I will guarantee payment
personally,
3. I will get telephone company credit cards for him
in both names.
I reviewed with him our procedures on payment and such
are satisfactory. Including the per diem allowance of $20 per day.
232
Exhibit No. 5
1. Investigation into accident at Chappaquiddick;
July-August 1969.
Z. Investigation into living conditions of Donald A.
Nixon in the Sierra Madre, Calif; September 1969,
3. Investigation into allegedly segregated apartment
owned by prominent Republican in Tallahassee,
Florida; October 1970.
4. Investigation into Intertel, Robert Peloquin,
William Hundley; January 1971.
5. Investigation into the background of Richard M.
Dixon, comic imitator of President Nixon; October 1971.
Investigation into the producer of "Millhouse: A
White Comedy, " October 1971.
7. .Investigation into alleged use of illegal
immigrants by Romano Banuelos; date unknown.
8. .Investigation into Quaker demonstrators in front
of the White House; date unknown.
9. Investigation into the activities and background
of Meier Kahane, Jewish Defense League; date unknown,
10- Investigation into a group in New York City selling
Presidential emblems on walnut without appropriate
authorization; date unknown.
11* .Observation of demonstrators during protest
marches in front of the White House and at the
Washington Monument; 1969, 1970.
^♦Investigation of civil rights incident at Jefferson
Hospital, Philadelphia, Pennsylvania; date unknown.
233
to. <_ .. • -
Investigation into an alleged incident involving i
Speaker Albert in the Zebra Room, Washington,
D. C» ; date unknown#
14. Investigation into ttt§ -witnesses and reporters, v^ho
story on My Lai massacr^; date unknown.
15. Investigation into Jack Anderson’s relationship
with Kirkland Hall College; date unknown.
16. Investigation into the background, location,
supporters, and contacts of the Brookings Institution;
•July 1971.
Investigation into the lessor of the apartment
to the Nixon family 1*1945 in New y ork City; date
unknown.
18
Investigation into activities of John Alessio,
Tune 1970.
19 . Trip to Hawaii to investigate party attended by
• /v
by SenatorKennedy; August 20-22, 1971.
Investigation into "Crime Checks” , a law en-
forcement group in Chicago; date unknown.
2J^. Investigation into background and personnel
involved with In-Flight news programs; date unknown.
22 # > Investigation into businessmen's Educational
Fund; date unknown.
23 ; Investigation into alleged improper behavior by a
United States Senator in New York City; date unknown.
Investigation in Birmingham, Alabama, into an
alleged scandal involving George Wallace’ls brother
and road contracts; April 8, 197L
_ Investigation into the political composition of the
Birmingham, Alabama city council; April 1971.
234
26. Investigation into the firm of Dyson and Kissner
to determine the relationship of Larry O'Brien with
that firm; late 1969.
27. Investigation into the background of Louis Harris
Associates; date unknown.
8 * Investigation into the background of the Committee
for Public Justice, New York City; date unknown.
29
7 * Investigation into the distribution of SBA loans
in North Dakota; March 1970.
30 .* Investigation into the House of Mercy Home
for Unwed- Mothers, Washington, D. C.J date unknown.
31. Investigation into background of Public Affairs
Analysts,; -.and relationships -with Larry O'Brien
Aug. 5, 1970
32 v Investigation into background of President's
Commission on Consumer Interests; date unknown.
33. . Investigation into background of Potomac
Associates; July 6, 1971.
34. ^ Investigation into background of Young Republicans
National Federation; date unknown.
35. Investigation into background of Young Republicans
Leadership Conference; date unknown.
Background investigation into National Peace
Action Coaliation; date unknown.
37 * „ Investigation into a water purification controversy
in New Mexico; July 1970.
38. Investigation, into misuse of labor by Smithsonian
Institution; date unknown. r
235
&9. Investigation into background of Richard O. Cudahy,
Cocharrman of Citizens for Proxmire ; Feb. 1970
40. Investigation of former Senator Tydings and charges
that he was being paid to bring in Israel immigrants;
Sept. 25, 1970.
41.
Background investigation into attendees at United
States Conference of Mayors concerning revenue
sharing; date unknown.
. Investigation and viewing of "An Evening with
Richard Nixon, " New York City; date unknown.
Investigation into the^death of Rebecca Ryan,
personal secretary to Mrs. Rose Kennedy; date
unknown.
44
* Investigation into brothers of columnist Jack
Anderson to determine if one held a job in govern-
ment; late 1971.
45. Investigation into allegations of a White House
official being involved with call girls; October 27, 1971.
Investigation into new yachts for the President;
November - December 1971.
47 • Checks on the contributor^ list to the campaigns
of Senator Muskie, Kennedy, Tydings, Hatfield,
Murphy, Proxmire, Gore, Hartke, Burdick, and
possibly Percy, Hart, and Morse; dates unknown.
. Frequent Board of Election checks for upcoming
visitors to the White House.
Investigation into* the narcotics shortage in New
York City during the dock strike; January 1972.
50 * Background investigation into the Gallagher
Presidents* Report; December-January 1972.
236
51. Investigation of takeover of the Statue of Liberty
by the Vietnam Veterans Against the War; January 1972.
52. Investigation into party in Phoenix, Arizona,
involving allegedly loud behavior by U. S. Senators;
date unknown.
53* Investigation into similar allegations of mis-
behavior by Senators and Governors at a party in
Hollywood, California; date unknown.
54. Investigation in ~ Wisconsin into an un-
identified individual attempting to recruit college
students to pull pranks in the Presidential primary
campaign in Wisconsin; January 1972. The individual
Ulasewicz was s art to investigate was Donald
Segretti, sent by a different arm of the White House
to encourage disruption and harassment.
55. Full investigation into the McCloskey campaign
in New Hampshire; December 1971. This investigation
was undertaken by Caulfield and Ulasewicz to demon-
strate the potential of the Sandwege Plan discussed
in there port..
55. Investigation into convention hall financing plan
by Democrats in Miamlj Florida; March 1972*
57, Investigation in Augusta and Bangor, Maine,
into all newspaper files on past Muskie campaigns;
date unknown.
58 • Investigation into youth leader for Muskie to
determine if he had any radical associations;
April 16, 1971.
59
. Investigations into the Maine Sugar Industry
to determine if any Small Business Administration
— loans had been influenced by Senator Muskie;
April 15, 1971.
60. _
Investigation in New York City to determine whether
Ester Newberg, former worker for Senator Robert
Kennedy, worked for Senator Muskie in his New
York campaign headquarters; December 20, 1971.
61. Attempted surveillance of meeting of Muskie 's financial
backers at 77th Street and Central Park West, New York
City; January 1972.
CUSTOMER'S RECORD COPY OF-PERSONAL MONEY ORDER DRAWN ON
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this customer’s; RECORD is submicied therewjj^
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Drawn on CicmicalBaisk
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Customer's Record Copy M2
of Personal Money Order
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RECORD COPY ■
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PERSONAL MONEY OM>CR •
BANKERS TRUST COMPANY \
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240
Exhibit No. 7
IKSaffiKKTXai
The 1972 Prcsidantiai Canpaign strongly suggests a definitive Republican
need lor the creation of a political intelligence-security entity to be
located within the private sector. This entity, surface- ly disassociated
f roc the Adjiiinistration by virtue of an established business cover, would
have the capability of performing in a highly sophisticated manner
designed to ensure that the major offensi ve intelligence and defensive
security requirements of the entire campaign and Republican convention
■ ■ t
would be professionally, structured, programmed end -implemented. ‘ In the
author's judgment, this effort would make a significant and perhaps
crucial contribution towards the reelection of Richard Dixon.
Indicated below, therefore, are a series of considerations and suggestions f
posed in this regard for the review of those requested to endorse the
suggested undertaking.
I. OPPOSITION IHTEUJG B iCB EFF ORT ■
The presence of Lawrence O'Brien as Chairman of the Democratic national
Committee unquestionably suggests that the Democratic nominee will have
a strong, covert intelligence effort mounted against us in 197P. The" . '
1959 I,. A. Times, New York Post, U. S. Marshal tear! which' operated from
former U. S. Attorney Mor-;onlhau ’s office (assertedly without his krxowledgej
is evidence of O’ Bi‘i£n's modus operand! and indicative of vhat* we can expect
this time around.
241
In tliis retire, \e shew la be par-. 5 rnlarly con^riK.-l about the new and
r ap i d ly grow in;; I : i i c r i ■* } o . ■gar. 1 :< a v i on ( Sc c Tab " A” ) . Chou Id Ui j s
Kennedy mafia dominated intelligence* "gun for hire" be turned against
us in 1 72 , ve would, indeed, have a dangerous and formidable foe.
Close scrutiny of this organization's activity has been ongoing here.
Indicated below are a series of points designed to suggest the political
hazards that this group represents:
A) The organisation was co-founded by Bill Hundley,
former Special Assistant to A. G. Bobby Kennedy and Bob Pelloquin,
Kennedy loyalist who functioned as Senior Attorney in Justice's
Organized Crime and Racketeering Section, also under Bobby Kennedy.
; B) Other Kennedy mafia types, including the so called
mysterious David I. Belisle, former Director Invest i gations for the :
Rational Security Agency, are principals in the organization.
C) It has been reliably determined that Stephen Smith,
EMK's brother-in-law, has privately visited Intertel's New York office
headed by former FBI supervisor Jack. O'Connell known by his colleagues
to have been a "black bag" specialist while at the Bureau. Smith,
. unquestionably, would think Intertel should EMK go for the big prize. ;
- D) On Intertel’s Board of Directors is Jerome S. Hardy,
Executive Vice President of the Dreyfus Corporation which is chaired
by Howard Stein. • The media reports that Stein will be a heavy contri- .
butor to a Democratic -Liberal or 3rd Party Presidential, candidate.
Shortly before this media revelation, the aforementioned Jack O'Connell
35-687 0 - 74 - 18
ac c or..ran ic-d an elec trq: 1 1 s]x-c :3 v 1 i s v to hot' > Stei n 1 s ; pud l4?dy * s of f i c es
♦ X$?y
for sweeping purposes.
E) It has been very reliably determined that sow of
Intertel’s principals possess enabling weaknesses or. have been quietly
let go trait their sensitive federal law enforcement positions because of
financial improprieties. One In tor tel principal, related to a known
Baltimore Cosa IJostra figure ancl released from federal service because
of an established gambling weakness, is now in charge of .Hughes' security,
operation in Las Vegas. •
F) The investigative reporter fraternity is taking a
closer look at the potential for Intertel to be exposed as a mafia front
or a mafia exploitable tool for its Caribbean and Vegas operations.
Tile recent Look article on Howard Hughes alludes to this point. Bill Kolar
(former Chief of Intelligence at IliS) and Resorts International's President
1. G. (Jack) Davis, recently testified before the Hew Jersey legislature
advocating legalised gambling in that mafia ridden state. •
All of the above facts are mentioned to suggest how the weaknesses of
Intertel, intertwined with established Democratic-Kennedy loyalties make
the organization most susceptible to a '72 intelligence gun for hire
approach by O'Brien or the Democratic Presidential nominee. The deep ;
concern here is that the assignment could be accepted on a compartmentalized
basis and easily hidden from republican James Crosby, Chairman of the
Board of Resorts International (assertedly owning £91 of Intertel stock).
Jim Golden, formerly with Intertel, has now switched over to the Hughes'
243
Page ad'. ■ r 1
Tool _ Company nnd i: la. - removed from the day to day Intel) 3 gence
activities or I n tc r to 1. . Thu s , th o oner a t i_n_^ head cue. r to j r, is be rc rt
of any Kixon support or loyalty.
It is recommended that consideration be given to have Inter tel
neutralized by Justice to preclude such development from taking place or
to discourage consideration by O'Brien or Stephen Smith. This can be
accomplished by directing Justice (if it has not done so already) to
open a case vith a view towards determining if the organization has
unauthorized access to sensitive government files. It most certainly
has.
Among other factors supporting this contention is the consensus in the
federal intelligence sector indicating that Intertel, in all likelihood,
delivered the details of a reported Justice- IRS skimming investigation
of Bob Maheu to Hughes causing Kaheu's fall and Hughes' departure from
Vegas. The manipulated threat of indictment of Intertel principals would
effectively minimize this threat, create a potentially debilitating
intelligence weakness for O'Brien's forces and force them to try other,
less sophisticated sources. Additionally, "Operation Sandwedge" would
be free to operate both offensively and defensively without a dangerous
adversary.
PROPOSED ”SA3 iDV.’BDGE" Il~fP0;:3 1 PI T.ITI E3
The total offensive intelligence, defensive security requirements for
the '72 Presidential Campaign and Republican National Convention will be
a large and sensitive undertaking.
244
Operation Sand vedre proposes that St be . charged, in
the following responsibilities:'
.(New York City based - clandestine operation)
A) Supervise penetration of nominees entourage and
headquarters with undercover personnel. -
. B) "Black Bag" capability (discuss privately) including
&11 steps necessary to minimize Democratic
'.•'.'•.j: voting violations in" Illinois > Texas, etc.
C) Surveillance of Democratic primaries, convention,
meetings, etc.
D) Derogatory information investigative capability,
world- vide.
■ E) Any other offensive requirement deemed advisable.
ESEERSIVE OPERATJOHS ' . * ’ V . r
A) Select and supervise the private security force hired
in connection .with the Republican Rational Convention. :
Conduct all political security investigations at
. - Republican Convention.
B) Establish and supervise nation-wide electronic counter-
1- .. measures capability in connection with all non-preoidential
security aspects of '72 campaign.
C) Supervise all security operations at 1701 Pennsylvania
Avenue, RRC. Conduct all security investigations (leaks,
personnel, etc.)
245
D ) Ensure the p j 1 i t leal sc • m ■ :i ty a spec ts of the
travel linj; campaign staff.
E) Conduct any Republican Party -Campaign oriented
investigation nation-wide.
OPERATES COVER .
The consensus dictates that a privately created corporate business
entity would be the most effective tool to implement the sensitive
responsibilities indicated above. The corporation would* posture itself
as a newly formed security consulting organization ostensibly selling
itself as a group of highly talented .invest! gator- security experts with '
impeccable Republican credentials who active] y seek only Republican
Corporations and law firms as clients.
Since the key operating principals (3 or U persons) in the corporate
entity would be well known Nixon loyalists in the law enforcement area,
the defensive involvraent, as outlined above, would be plausible and readily
acceptable to all friend or foe inquiries.
The offensive involvment outlined above would be supported, supervised
and programmed by the principals, but completely disassociated (separate
foolproof financing) from the corporate structure and located in New
York City in extreme clandestine fashion. tty source would be charged with
setting upland supervising ‘this operation. In other words, he would not
surface. Rather, his responsibilities would be increased and he would be
charged with setting up the clandestine operation in exactly the same
fashion as he did during his career- You are aware, of course, that his
246
Page seven * •* "
expertise in this area was considered the model for police departments
throughout the natiorl and the results certainly proved it.
"SANDWEDGE" PRINCIPALS
It is suggested that the best method of ensuring the success of Sandvedge
is by limiting the principals to an absolute minimum, but to allow for
an expansionary backup of consultants on a case by case basis where
the need arises. The involvment in defensive campaign activity as
indicated above would, under inquiry, be postured as a natural "ad hoc"
contribution on the part of the corporation to the *72 Republican effort.
The covert or offensive side of the operation, in no way connected to the
corporation, would be untraceable to any of the principals or the
t‘:V; • ’■
Administration.
Necessarily then, the principals should be strong Nixon loyalists,
possessing the necessary credentials to perforin in this highly sensitive
area, professionally, with the described effective cover. Below are lieted
the principals who are ready,- willing and able to so participate in the
manner designated. /
JOHN J. CAULFIELD
/ 1. Cover - Because of White House experience and contacts,
has decided to create a Washington based security consulting- investigative
organization which would seek Republican corporations and law firms as
2. Assignment - Receive and program all activities and
clients.
247
Fagt' eight .
assignments, including the Hew York City operation, act as liaison vith
selected White House staff before ana during campaign for sensitive
investigative needs. Liaison with Cabinet when necessary. Liaison with
1701 Pennsylvania Avenue operation on all security- investigative needs,
Liaison with Republican national Committee in connection with their investi-
gative needs (Nofziger). Liaison with the RiJC on the programming of all
security at the Republican National Committee. .
JOSEPH WOODS : , 5 ' ’
1. Cover - Since only engaged part time as a County
Commissioner in Illinois and needing funds to support his latge family
(true enough! ), has decided to become a principal in a potentially lucrative,
Washington based. Republican oriented security consulting firm utilizing
expertise in law enforcement (FBI - Sheriff Cook County) and political
contacts nation-wide. Will seek to build the organization in the mid-west,
taking advantage of the large influx of Republican big business into the
Chicago area.
2 . Assignment - In charge of all private security forces
at the Republican National Convention. In charge all covert efforts (discuss
designed to preclude voting frauds in Illinois, Texas, etc. Liaison active
and retired FBI agents,- nation-wide, for discreet investigative support
(Hoover also? - Evaluate). Liaison nation-wide with Republican State
Chairmen for investigative support. Support New York City covert operation.
NOTE . ^ rV-v/;. \ •; . ' ;
It is interesting to report that Intert.el made a lucrative offer to Joe
Woods last week ($30,000 per annum, stock options, etc.) indicating he
would be in charge of their new Chicago office. This tack is viewed as an
attempt to purchase White House prestige. In the author’s judgment, the
compartmentalized political hazards, previously indicated, would still
constitute a real and present danger.
248
Page nine
* 'V
VERNOI! (MIKE) AC REE - Deputy Commissioner IRS, Inspection Division
Mike is the highest ranking Republican career official in the Internal
Revenue Service. A synopsis of his outstanding career is attached hereto.
("CAB "B"). He is a strong Nixon loyalist and has so proved it to me,
personally, on a number of occasions. His management and investigative
expertise will be invaluable to the undertaking, especially in the
financial investigative area - crucial in a campaign of this type.
\
• ' • ' ’ ? i •• •
1. Cover ' - Mike has decided to retire after 32 years
of federal investigative"" service. He has witnessed the financial success
of Intertel and has decided to join a small group of Republican oriented
principals who wish to emulate and improve on the Intertel experience
dealing only, however, with' republican corporations and law firms.
2. Assignment - IRS information input, financial
investigations, liaison federal law enforcement establishment nation-wide,
preparation of reports, briefings to key Administration campaign figures
on results. Support New York City operation. .
CONSULTANT PERSONNEL j \ ; 4 .. • ... •// f ’ : 4.'>
Under the cover of the corporate entity hiring Republican consultants
to assist in meeting the needs of its clients, a medium for the likely
required expansion of the covert aspects of the undertaking would be
established in compartmentalized fashion , thereby minimizing any threats
to exposure inherent in a large covert operation. The consultants would
be brought on to perform ad hoc assignments on a case by case basis in
any area or undertaking. v
249
cortroiUTK staff
As surges ted, , a bright young Nixon loyalist with atto rney and
business managerial credentials should be brought on board to take
complete charge of the corporation’s business requirements. He would
function as a technician with little or no responsibility or knowledge
regarding the covert aspects of the operation.
No candidates will be considered for this assignment until the
concept receives a go. Anne Dawson, understandably, would be a key
' ' y" ' " -
and valuable asset to this undertaking! Trudy Drown (presently
in White House Security liaison with FBI) would, if willing and
could be spared from her present duties, also be highly valuable.
Any other administrative help brought on board would be of the same
caliber as Anne and Trudy.
250
Page eleven ■-
fip;p7 ::3 * .
Reviewing the above proposed broad ranged responsibilities of Operation
Sandwecge, it is clear that it would be impossible to judge, at this
time, what total costs for such an undertaking would be involved. The
major initial costs, of course, would relate to principal, management,
technical and secreterial salaries, as well as office space and
equipment in Washington and Chicago. It is expected that substantive
additional costs would become evident as the requirements for effective
operation come more clearly into focus. *
What is obviously needed, therefore, is a funding technique which would
enable the corporate cover to raise whatever monies would be required
on a legitimate and painless basis. It is suggested that the business
cover, indicated above, provides the ideal and proper framework to
resolve this problem, as follows:
The overt security consulting services to be offered
Republican corporations by the business entity would clearly be a
deductible business expense. There are no IRS requirements dictating
the amount, type or quality of service which must be performed for a given
consulting fee. This is strictly a matter for negotiation between the
client and the entity performing the service.
Thus, it is clear that if the new Corporate Security Consultants International
firm were in a position to "negotiate" as many lucrative consulting
agreements as required on an expandable, need basis with trustworthy
Republican corporate giants, the funding of this effort could go smoothly
forward with no direct financial connection to the Administration
or Republican Rational Committee. Further, the sensitive- and often
traceable area of political 'contributions would be eliminated as a
hazard to this undertaking.
As indicated, funding for the proposed Hew York City operation would
require special measures. There are some very discreet and viable
approaches to this matter but, it is suggested that they be discussed
on a private basis only. -
CONCLUSION
This paper, then, is submitted with a view towards presenting, for review
a highly sophisticated approach to a critical aspect of the 1 972
Presidential Campaign. It is suggested that the various subheadings
indicated (SES TAB "C") in the proposal provide a proper agenda after
high level review for a meeting between the principals indicated and
the officials charged with final decision. . f
It has been indicated that it is already very late for this proposed
undertaking to be in -review .status - the authors concur. It is .
respectfully requested, therefore, that the highest priority attention
be given this matter. We await your reply. ' PMfi
252
Exhibit No. 8
2 * 375
Eaadolph 5f„ T hro wer-
Commissioner
Ki.’ Kart±a Bburtfay
Chief Counsel " ' - x
Disclosure offtneome Tar Return* to the President
{v P br t her.^ reference- is made* to- your request- formy ; : -
opinion with respect, to whether you have authority to
diselase-iacemm-tax.retaEna to: a. member of the Presi-
dent's - TTnrfc- dafrn. nf April 14, 1970,
r ftnm«W you with a brief summary opinion to the. i
effect that, t here is no- question about the President’ s
Wy-ht nf arr i -n t-n. i mnM ; tar r e t u rn* through, a designated '
irmtwr cf Mn staff^ r then advised you that a moret-; -t - ;;
detailed opinion «u in process ofr preparation. -iV..--..
— . ' r j - -V* '■ ^;r-' r " - - •.. Tr:&Z'h*s* * -> *-• ’
• ■ • - - iv; • ■ <>? T:' *;•££*
Hie specifier background concerns the disclosure by
the Service of federal income tax re t u r n s to the ' - '
Honorable Clark &. Mollenhoff, Deputy Counsel to the
President, pursuant to the procedures and understanding . .
outlined in your m emorandum to Hr. Mollenhoff, dated
Se ptemb er 18, 1969 (copy of which is attached as Exhibit A).
You hove advised me that at the time Mr. Mollenhoff - dis-
cussed with you his access to designated, federal income
tax return* he indicated to yon that he was acting undexr
aut fae ri ty of the Pr esi dent. “
Our more- detailed study fully confirms my conclusion
that t here is no question that Hr. Mollenhoff acting on '
behalf of the President lawfully had the right of, and
was lawfully given, access to federal income tax ret u r n s'
end related data.
Section 6103(a)(1) of the Internal Revenue Code of
1954 provides: «
"(a) PUBLIC RECORD AHD IHSPECTI03. —
253
- 2 , -
"(1) Returns made with respect ter taxes
imposed by chapters 1, 2, 3, and 6 upon which
the tax has been determined by the Secretary
or his delegate shall constitute public records;
. but* except as hereinafter provided in this
section,, they shall, be open to inspection only
.upon order of the President and under rules and
regulations prescribed by the' Secretary or his
? -delegate and approved by the- President. n - ^ .
- It would sees "quite : clear that under this Statute you •
am- fully- auth o rize d to disclose any tetum "made with ~ .
respect to taxes imposed by" Chapter. 1, relating to income
taxes, , "upon order of. the- President.” In fact, by virtue of
the provisions, of Section 2 of Article IX- of the Constitu-
tion^ which p rovi des that- ** the President ***• may require- -
the Opinion, in writing, of the principal. Officer in each
of the executive Departments, upon any Subject relating
to the- Duties of their respective Offices, ***," it would
seem quite evident that as an officer of the Executive
Branch of the G over n m ent, you may be required by the y
President to disclose to him any matter coming to your
attention (or to that of your subordinates) in the per-
formance of y our official duties. ''*** [Ijn contemplation
of law under our theory of Government, all the records of
the executive departments are under the control, of the
President of the United States ***." H. Rept. 141, 45th
Cong., 3 (1379). ' ' - '
Section 1 of Article II of the Constitution provides
that ”[t]he executive Power shall be vested in a President
of the United States of America," and Section 3 of the
same Article provides that "*** he shall taka Care that
the laws be faithfully executed ***." It is quite apparent
that the President cannot carry out these responsibilities
in a nation of this size, or a Government of this size,
entirely on his own, but must call upon others duly appointed
to the Executive Branch to assist him in carrying out these
duties. As early a s Marbury v. Madison. 1 Cranch 137, 5 U.S.
60 (1803) , the Supreme Court said:
254
- 3 -
. , "By the- constitution of ths United States,
the president is invested with certain important
-- political, powers, in the exercise of which he is
' 4 j?to use. h£s own discretion, and is accountable
4^ only to- his . country: in his political character
L^vand-to his^owa. conscience, ITo aid him in the
>.« i s authorized
... ' ?r> appoint^cartain off leers j.wbo act by his;“P- U .
f^ aert'l'i u Itjr^ aad in conformity • with his orders. J .
eases^thsir achar are his acts; and
•hy. whatever opinion may be entertained of the manner
in which ereruHve-discretion may be used, still,
there exists, and can exist, .no power - to control;-
feet di acTWtl nm."?- IT Cranch 137 at 165, 5 U.S,
-'It 0 at 791?-' ■ ■;
This proposition has been repeatedly enunciated by the
courts. See, e.g. Myers v. United States . 272 U.S.
52 (1926): “
"The vesting of the executive power in the
President was essentially a grant of the power
- to execute the laws. But the President alone >-
and maided could not execute the laws. He
must execute them by the assistance .of subor-
• dins tats. ..This view has since been repeatedly
affirmed by this Court.
**** The highest and most important duties
:! which his sub or di nates perform are those in
which' they act for. him. In such cases they are
- exercising not their own but his discretion."
.272 B.S.^5.2 at 117, 132.
Xt is also clear that even in the case of one who has
bo power to delegate, he may, without delegation exercise
his authority through persons he appoints. See^ for example,
S lu ' evep or t En grav ing Co.. Inc, v. United States , 143 F. 2d
222 at 226 (5th Cir. , 1944) , citing Mechem on Agency, Vol.
I,. Section 304.
255
-A- t. . ' : ;
It should tie noted that even In the case of heads
of. departments and other officers of the Government,
of Ia 3 ser stature than the President , they may authorize
inspection of returns by. their subordinates acting for
them. Sea, for example. Regulations Sec. 301.6103 (a)-I(f) .
The President would seem to have no lesser authority.
It would further seem quite clear that the President may
relay any lawful order to yhu through his subordinates and
that yon have no choice but to comply therewith.: let is
common knowledge that orders to military and civilian-
personnel are frequently stated.' as being "By the direction
of the President," though signed by his. subordinates, and 3
it has long been settled that such orders may be presumed
to be of the same lawful effect as if delivered by the
President in. person. See, for. example,. Opinion of. the
Attorney General, 7 O.A.G. 453 (1855). It seems quite,, V
apparent from the statute that Congress intends that. : . -
income tax returns be disclosed "upon order of the Presi-
dent" as he may direct. .
It should be noted that Section 6103(a) (0. provides
that income tax returns be open to inspection
"upon order of the President" and
' "under rules and regulations prescribed by the
■ Secretary or his delegate and approved by the President.
It. has been suggested that the President himself can only
require that returns he made available for inspection by -■!
complying with the "rules and regulations" referred to in
this section. If this were so, the words in the statute
"upon order of the President" would become meaningless
since he obviously could provide by such "rules and fegu-
latlons" for inspection by anyone. It is inconceivable
that the President should be bound by such rules and_^ -. -
regulations in prescribing the circumstances or mannet in
which returns are to be disclosed to a member of his"staff
256
- 5 -
fcnrhia asa,^J Sines any such rules and regulations are
' subject to revision ox modification by the Secretary at any
^fciaie with the approval, of the President, and the Secretary
;.is the subordinate- of the President appointed to serve
fat the pleasure of the President^ it caiinot be believed
that he ahonjd be - limited by the requirements of any such
inles and -i-g gntat-to ng-OT- t-ha tr Congress so intended, f
•^P^«SSiScST>c-f
■'"fj; ■ frrrrri ihad ns • a copy of a legal opinion dated
Apart* to Hri. Lawrence-: Fi O’Brien,- C h a irm a n ,
-jCfoxter Comnrlssioner of. Internal Revenue); Sheldon S. Cohen.
.” {fcrmer chief Counsel: and latest Commissioner of Internal
Bevenne). and Hitcheli Rogovin (formerly Assistant 'to. jhe
Ccsanisaianer- and latex Chief Counsel of. the Internal. Revenue
Service) . In tfaaifop inion they, state that "a- presidential J.
request would presuma bly have to comply with the various
requirements of the -regulations" — and specificallytWith
Regulations Sec. 301. 6103(a)-l(f). Such regulations. pro-
vide for inspection of returns upon the application of
the head of an executive department — 'specifically making
such inspection dependent upon "the discretion of the
Se cr e ta ry - of the Treasury or the Commissioner of thcemnal—
!» or the delegate of either." To assume that a
"presidential re q ues t** must comply with such regulations
assumes that the Secretary of the Treasury or the Com-
missioner of Internal Revenue could frustrate a request of
the President for returns -- in the face of the fact that
Chs s tatu to ry pr o vi sion says that they should be open for
Tmi|i— r Ti in on his, order. : ^ f -
The a tatnta as I interpret it, and as interpreted by
my predecessors, is not the source of the right of the
President to inspect returns, but merely sets forth the
manner in which returns may be made available to other
•persons without Presidential order.
257
- 6 - , ■ • "
The opinion. letter of Messrs-. .Caplin, Con an, and
Eogovin previously referred to states that:
”It has been, suggested that sines the employee
in question acts as agent for the President in
Eiatters of. inves tigation , no written request by
the- President- is required. Wa are unaware of
any theory of law which would support such an
. ar gume nt."
• Although cases have not frequently arisen where dis-
closure to the President or someone acting for him was ■
■ q uesti oned, the Office of Chief Counsel ha3 clearly and
- -repeatedly taken the position that neither the statute
nor the regulations limit such, disclosure.
Prior to 196X this office had apparently never
1* addressed fee problem. ’ in 1961 the. question - first formally
arose regarding disclosure to a special . consultant to the
President. While no opinion of Chief Counsel was written
Cm fee question, access to the returns by Mr. Bellino as
Special Consultant to the President was clearly approved by
various representatives of the Office of Chief Counsel,
In a neaorandnm of March 23, 1961, to the General Counsel
©f fee Treasury from Commissioner Caplin fee following
stat em e nt concerning the inspection of returns and the
legality thereof was stated;
-. Hfln January. 26 Mr. Bellino, Special Con- v
sultan t to fee President, called at my office
end requested permission to inspect our files
on — - - — and others. Although we had no
precedent- to guide U3, we decided that Mr.
Bellino, in his capacity as a representative
of fee President, could- inspect our files with-
out a written request. Thi3 reflects the view
that. Section 6103 of the Code specifically pro-
vides that r etur ns shall be open to inspection
upon order of the President, and since Mr.
Beilina’s official capacity constitutes him the
representative of fee President, the action
taken is regarded 33 conforming to law. Based -
. . on this decision, we permitted Mr. Bellino to
258
- 7 -
inspect the files relating to - - - -* Since
that time we have also permitted him to in-
spect tax returns and related documents
. pertaining, to other persons."
Onr fi les show that this memorandum was reviewed by
thp Director: of: the Enforcement Division in this office :
(them responsible for disclosure matters) and an Assistant
Chiajc Connaal before being sent by the Commissioner to the
G eneral Counsel. It- is our understanding that Mr. Bellino
Tn ipm H il fileawithout written request at various times
a ft er the position vas taken that he could have access to
the returns tender pertinent: law— ^ (See memorandum of -
May 23, 1961 to Robert H. Knight,, General Counsel of the
Treasury, from Mortimer Caplin, Commissioner, re: "Inspec-
tion of Returns by Congressional Committees," copy of
which is attached as Exhibit B.)
Eighteen months later, in 1962, then Chief Counsel
Hauser furnished an opinion to Commissioner Caplin, at
hi n request, dealing with both the question of whether
the President was limited by statute in his power to dis-
close to committees of Congress certain information
required to be filed by exempt organizations with- the
Internal Revenue Service, and the further question of
whether the President, in exercising such power, could
set. through a subordinate. After careful analysis of
various authorities bearing on the questions, the opinion
concluded that "the vesting of executive power in the .
President the Constitution requires that he be
entitled to all information relative to his control over
the executive branch ," and also that:
”*** an official in the Executive Branch
when acting in line of duty acts for the
President 'and actually exercises the President’s
1 i ! mr for bim - His acts are considered
to be the acts of the President, as he is and
must be the President’s alter ego in the matters
259
- 8 "
of the Executive Branch where the President ^
is required by law to exercise authority." —
(See memorandum dated November 19, 1962, from Chief
Counsel Hauser to- Commissioner Caplin, and Mem orandum of
law referred to therein and forwarded therewith, dated -
November 1, 1962, a copy of which i3 attached as Exhibit C.)
In January 1964, this office was again called upon
for an opinion with respect to disclosure of returns to
the President or someone acting for- the President. • Presi-
dent. Johnson h»d issued Executive- Order 11130 establishing
a rrnrm-f g-inr., with Chief Jus ties . Warren as chairman, to
investigate ^ report on the assaaination of President
Kennedy; the Executive Order contained no reference to
disclosure or non-disclosure of tax information, but merely
Indicated rhat» all eg and departments should furnish
the Commission with such facilities, service and cooperation,
as might be reforested. ■ The opinion of this office j pre-
pared in the Enforcement Division of this Office on. January
6, 1964, concluded. (1) that the executive order constituted
authority for the Commission to examine the returns and
(2) that, in any event , the Commission "acting as an 1 am *
of the President,” "in the President's stead," and "for
the President" had full authority to examine. the returns
1/ The opinion of Messrs. Caplin, Cohen and. Kogervin, 'jg
dated April 9, 1970, previously referred to, suggests
that- disclosure of returns in response to a presidential
request, other rbim in accordance with Regulations Sec. .
301. 6103 (a) -1(f), constitutes a misdemeanor under Secs.
7213 of the Internal Revenue Code (Title 26) and 1905' ■
of the Criminal Code (Title 18). It may be noted that
the opinion to Commissioner Caplin of November 19, 1962,
referred to above, specifically concluded in this con-
nection that, "As the President is the Chief in the chain
of command in the Executive Branch of. Government, xt is c >
clear that' Section 1905, Title 18 United States Code, and
Section 7213, Title 26 United States Code, are inapplicable
to disclosures made to him."
260
- 9 -
without regard to the regulations and without the necessity
of any further Presidential order. The opinion states in
pertinent part:
”*** the provision in Sec. 6103(a)(1) for
prescription of rules and regulations by the
Secretary or. his delegate i3 merely an
authorization for facile imp lamentation of a
Presidential order rather than a restriction
on Presidential authority.
"*** there can he no congressional restriction
on the authority of the Commissioner to release
information to the President. - *
"*** it is axiomatic that in the exercise
of power of his office the President is not - -
required to personally take care of day to day^
details but may, in his discretion, delegate
certain functions to others. *** Manifestly,
Sec. 6103(a)(1) could not have been designed ^
to require the Secretary or his delegate and - -I/-.,
the President to prescribe and approve rules'
and regulations regarding a personal inspection .
of ret urn s by the President. Such construction
should apply equally to an inspection by the
Commission acting for the President. ’ll'
”*** yhe President, by virtue of his office,
is the head of' all executive departments and the
inspection of returns by the head of the depart-
ment is not in any real sense a disclosure. The
same is true with respect to the President’s
delegate.” .
(See memorandum to General Counsel Belin from Acting Chief
Counsel Hertzog, dated January 6, 1964, a copy of which is
attached as Exhibit D.)
261
-xo-
Xfc is of. interest to note that no attempt was there-
after- made to comply with . the requirements of Regulation.
Sac* 6103(a)-l(f) in that no request was received from
Chief Justice Warren, as head of the Comnission but that
requests were accepted from the General Counsel of the
Cccsaiasioru- ■ Your files, indicate that on several occasions
thereafter during 1964 various returns were furnished
the. Commission (presumably on the basis of the foregoing
opinion) charieg the signature of Mr. Rogovin as Assistant
to the Commissioner..
a question arose as to whether the returns
disclosed to the Wa rre n Commission could be published by . '
tine- Commission. This resulted in a request by Sheldon
Cohen (who had meanwhile become Chief Counsel) to the
Director, legislation & Regulations Division of this.-- .
Office, for its opinion as to whether the Commission had - -
auth o r ity to inspect returns. 1; The legislation & Regulations
Division advised Mr_ Cohen by opinion on September-24, ~
1964, that it concurred in the January 6, 1964 opinion of
the Enforcement Division, reiterating thatj. ■ hi;- .-.
”**■* the Commission is the ’alter ego’ of the
President, and since there is no restriction on
the President’s authority to inspect tax returns,
likewise there is no restriction on the right :
of the Commission as his ’alter ego’, to inspect
tax returns within the scope of the Executive
Order.” "fc
, . . - ,:yr
(See memorandum to Chief Counsel Cohen from the Director,
Legislation. 8c Regulations Division, dated September 24,
1964, attached 33 Exhibit E.) U: • '
These prior opinions of my predecessors, insofar
as they relate to the present question, seem to me to be
correct as a matter of law. Thus, there would seem to be
no question about the President’s right or access to these
r e t u r ns through- a designated member of his staff. . While
262
-li-
as X indicated in my earlier summary opinion, there is
no legal. requirement that such requests he written, the
procedure you have followed requiring that all requests
be detailed in writing is procedurally preferable to
accepting oral requests.
KMW/mg/mah
Enclosures
■ Very • truly yours ,
{Sigced) X. llarth '.Voty
K. MABTIN WORTHY
Chief Counsel
W&Sk
mm
mm
' *“ V |
-
i mmm
i i
! ■
•••• I
263
Exhibit No. 9
,0 i v
L-.i .^*0
C?:C:D
July 2k, 19S9
MEKBAMDUM TOH PILE: .
SUBJECT: Activist Organizations Coirnittae
j
In response to Assistant Cornnissior.er Bacon's jnemoraxiduni cf July 13, 19 £9 ,
the following persons at
tended the
organizational meeting tod;
2-y:
Mr. Paul H. Wright
C?:C
Mr'. Paul L. Kane
T: MS: 320
Mr. Donald F. Cowles
CP
i -< *r . James J • McGarty
CP: A
Mr. Charles 3. Fink
D:0:P
fir. Bernard L. Meehan
CP
Mr. William. F. Gibney
CP: 1:0
Mr. Richard T. Stockton
T:I:I
Mr. Richard M. Hahn
CC
Mr. Walter &. Stuapf
CP:A?:SA
Mr*' Gilbert F. Haley
Mr. Thomas W. Hines
C?:I:0
CP: AT
Mr. Donald 0. Virdin
C?:C:D
X
The purpose of the meting was to establish basic communications between
the various functions of the Service and to furnish an overall picture
of the purpose and sensitivity of this Committee. The following were
the principal items mentioned:
1. This is an extremely important and sensitive matter in which the
highest levels of sovermsont are interested and in which at least
three Congressional coanittses are currently conducting investigations.
In addition, the Internal Security Division, Department of Justice,
and the Federal Bureau of Investigation have files on many of these
organisations .
•t
2. To indicate the type of " organization in which we are interested, each
person attending was furnished the nuamorandums to all Regional Commis-
sioners dated July 14, 1969, and March 25, 19^9, from Assistant
Commissioner Bacon. These lists, which identified 77 specific organi-
zations, will give some idea of the identity and importance of this
project. . '
3. Reports which have been received in response to these memorandums
. from Regional Commissioners indicate that many Compliance activities
have some facts about various organisations but there has not been
coordination between Compliance activities or other parts cf the
Service to . the extent that is necessary to insure that all Internal
Revenue Service laws have been complied with. Alcohol, Tobacco and
Firearms Division is conducting investigations of many of these
organizations; the Intelligence Division has much material on others;
the Audit Division has examined or investigated several of the organi-
zations; and the Collection Division has failure to file investigations
underway on others.
264
- 2 -
4 . Sane orc&nizations should have filed income tax returns but have
not done so; others may be liable for payroll tax. returns but have
failed to file. | .
5. Some of these orsanisations may be a threat to the security of the
United States and one of our principal functions will be to determine
•the sources of. their funds, the. names' of the contributors, yr.ether
the contributions riven to the organizations have been deducted as
charitable contributions, what we can find out generally about the
funds of these organizations.
*
6 . The Federal Bureau of Investigation has prepared monographs on
many of "these organizations and has files on most of tnem. That
agency vill be requested to furnish data to the Committee. Also,
tile Senate Committee on Government Operations has much information,
including charts showing the organizations ’ structure, membership, •
and some indication as to the source of funds.
7 . Notwithstanding the fact that ve vill cooperate with and obtain
information from outside sources, t-nis Committee will not conduct
joint investigations. Our principal purpose will be to coordinate
the activities within the Compliance organisation to insure that
all information available throughout the United States is collated
and made available to the appropriates. Compliance division conducting
the investigation of the organization.
8 . A review of the files assembled in the National 'Office on ^ some of
these organizations shows Cpmiaunistic infiltration and indicates
that there is a proliferation of the activities of soma organizations;
that is, they, have 'many local units and may 'have suborganizations
under other names - . " ' ■ '■«
The Committee plans' to start functioning about August 1, 19^9/ and its
principal actions viH ( be:
1. To assemble the data that has been received and trill be received from
the regions and; various National Office functions.
2. Analyze the data to determine vhat action should be taken. .
3. Disseminate the information to the appropriate Compliance activity
for appropriate field investigation, if necessary. In doing this,
the Committee will not take over the function of any Compliance
• activity. Thus, if the principal thrust of the investigation should
be by Alcohol, Tobacco and Firearms Division,- that Division will
be furnished the data and vill be expected to take such action as
265
- 3 -
may be necessary in coordination with other Compliance activities.
If ti:c flatter appears to be one" for Intelligence or Audit, the
Division having the principal interest in the matter ".all assume
the primary field investigative function.
b. All parts of the Service are interested. Thus, ve may have sons
of these organizations who claim, to be political, parties and ve
will need the Chief Counsel's guidance and advice because of the
extremely delicate and sensitive nature, and the unanswered ques-
tions, as to what should be done. Data Processing may be asked to
use their resources, if necessary, where filing records arc needed
or where it is found necessary to use their date processing capa-
bilities in this work. The Office of International Operations is
affected because soma of these organizations have members or activi-
ties outside the United States. The Appellate Division already has
some cases, pending, and. it is expected that many others may reach
that level. Thus, we cannot say that any part of the Service will
not be asked to participate actively in' this matter.
It was pointed out that although the fact that this Committee
exists will become known, its activities should be disclosed
generally only to those . persons who need to know, because of its
semi-secretive nature. Indeed, action is being taken to obtain
top secret clearance for the full-time Committee members. Cur
files will be protected with usual • intelligence type security.
We do not want the news media to be alerted to what ve are attempt-
ing to do or how ve are operating because the disclosure of such
information night, embarrass the Administration or adversely affect
the Service operations in this area or those of other Federal
agencies or Congressional committees.
6. Because cf the type of organisations involved, we would expect the
Exempt Organizations Branch of the Audit Division to play an active
part. Also', the Income Tax Division and the Miscellaneous and
Special Provisions Tax Division will also be active participants.
Ve estimate that it will take the four Divisions represented on
the Committee and their secretarial and clerical support about
four months to assemble the data and to really initiate actions
. that we plan to take .
7- The permanent Committee will be composed of Mr. Paul H. Wright,
Chairman, C?:C; Hr. William F. Gibney, C?:I:0; Mr. -James G. McGarty,
CP: A; and a member to be designated by Alcohol,. Tobacco and Firearms
Division.
8. In addition to the permanent members, each activity represented
at this organizational meeting was asked to advise the Chairman as
to the permanent representative who would be contacted for advice,
coordination, special meetings, etc.-
266
9 -
io.
11.
12 .
13.
• TOE
It is emphasized that this Committee will only coordinate ar.d
recommend action to to taken . Each division will still do its
own work. Thus, the Committee viil recommend to the functional
division that it has developed certain information vhich appears
to warrant investigation, but it is up to the division concerned
to take any action deemed necessary.
The permanent Committee '.-/ill moot in Boon 30^9 a t 9:30 A. Mi, Tuesday,
July 29, 1969 , to discuss generally ’/hat ve plan to do with
Mr. Philip R. Manuel, a representative of the Senate Committee on
Government Operations. Other members in attendance today may
participate if they desire.
Because ve have limited resources in money and manpower, ve must
make the mo 3 t effective use of our information. Vie cannot waste
our efforts; ve have to hit the high spots. Tne tentacles of seme
of these organizations are so far reaching that it vould take an
exhorbitant amount of our resources if ve did everything tr.at
could be done. Thus, the decisions concerning any field investi-
gations or other activities must be made with this thought in mind.
The type of organization in vhich ve are interested may be ideological,
militant, subversive, radical, or other, and one of our first problems
will be to. define and to determine vhat kind of organization ’.re are
interested in. V/e have a general idea as set forth in the lists
vhich have been given you, but ve have net made any final decision.
In effect, -vhat ve ’./ill attempt to do is to gather intelligence
data on the organizations in vhich ve -are interested and to use
a Strike Force concept whereby all Compliance divisions arid ail
other Service functions will participate in a joint effort in our
common objective.'
As soon as permanent space has been assigned, all members will be
advised promptly. Meanwhile, any questions snould be referred to
Mr. Paul H. Wright, Chairman, on Extension 3^97 > or nay be sent to
Room 5242.
D. 0. Virdin
A copy of this memorandun ha
attendins the meeting;.
hear, delivered to each person
267
MEMORANDUM FOK: . . - ' ,H._ R. HALDEMAN ' •
FHOb£: . , . . 'J. S'. .MAGRUDEH " :
HE; • The Shot-gun versus the Stifle
Yesterday you asked me -to give you a talking paper oa specific problems
we've had in shot-gunning the media and anti-Administration spokesmen
on unfair coverage. : ; .
I have enclosed from the log approximately' 21 requests from the Presides
in the last 30 days requesting specific action relating to what could be
considered unfair news coverage. This enclosure only includes actual
memos sent out by Ken Cole's office. In the short time that I have been
hare, I would gather that there have been at least double or" triple this
many requests made through various other parties to accomplish the
same objective. .
It is my opinion this co'nt'inual daily attempt to get to the media or to •
anti-Administration spokesmen because of specific things they have said
is very unfruitful and wasteful of our time. This is not to say that they
have not been unfair, without question many situations that have been
indicated are correct, but I would question the approach we have taken.
When an editor gets- continual calls from Herb Klein or Pat Buchanan on
a situation that is difficult to document as' to unfairness, we are in a
very weak area. Particularly when we are talking about interpretation
of the news as against factual reporting. . *
. The real problem that faces the Administration is to get to this unfair
coverage in such a way that we make major impact on a basis which the
networks-newspapers and Congress will react to and begin to look at
things somewhat differently. It is my opinion that we should begin
concentrated efforts in a number of major areas that will have much mor
impact on the media and other anti-Administration spokesmen and will
do more good in the long run. The following. is say suggestion as to how
268
"V. e can achieve this goal:
1. Begin an official monitoring system through the FCC as soon as
''can BfVch is officially on board as Chairman. If the monitoring system
proves our point, we have then legimate and legal rights to go to the
■networks, etc., and make official complaints from the FCC. This will
bave much more effect than a phone call from JKerb' Klein or Fat Buchanan
2. Utilize the anti-trust division to investigate various media relating
•*v anti-trust violations. Even the possible threat of anti-trust action 1
1 !:ink would be effective in changing their views in the above matter.
3.' .Utilizing the Internal Revenue Service as a method to look into /
■•-e various organizations that we are most concerned about. Just a /
'hr eat of a IRS investigation will probably turn their approach. — '
•4. Begin to show favorates within the media. Since they are basically
i'Ot on our side let us pick the favorable ones ai Kennedy did. ■ I'm not
/ eying we should eliminate the open Administration, but by being open we
■>'ave not gotten anyone, to back us on a consist ant basis and many of those
'•■“ho were favorable towards us are-now giving it to us at various- times, i.
’> id Lewis, Hugh Sidiy. •. • • ■
5. Utilize' Republican National Committee for major letter writing
s :7orts of both a class nature ar.d , a quantity nature. We have set-up a ‘
v ::uation at the National Committee. -that will allow us to do this, and
1 think by effective letter writing and telegrams we will accomplish our '.
-''hjective rather than again just the shot-gun approach to one specific .
Senator or one specific news broadcaster because of various comments.
* would liken this to the Kennedy Administration in that they had "no
Claims about using the power available to them to' achieve their objectives,
\i- the other hand, we seem to march on tip-toe into the political situation
“r .0 are unwilling to use the power at hand to achieve our long term goals
'"‘itch is eight years of a Republican Administration. I clearly remember,
:- -mnedy sending out the FBI men to wake-up the Steel Executives in the
— iodic of the night. It caused an uproar in certain cases but be achieved
'•is goal and the vast majority of the American public was with him. If
''e convince the President that this is the correct approach, we will find
*i.at various support groups will be much more productive and much more
'■loperative; and at the same time I think we . will achieve the goals this
Udminiairation has set out to do on a much more meaningful planned basis.
269
PRESIDENT'S REQUEST
.DATE:
J. Ehrlichman
President’s request that you take
action to counter Dan father’s
allegation' that the Kershey move.,
was decided upon because of the
moratorium. {Dog 1733)’ •
President's request that you talk '
to Ted Dewis concerning the"
present status of discipline with- •
in the Administration. (Dog 1699)
'October 15
P, Buchanan ’ . .. President’s request for a report
on what actions were taken to com-.' ;
* 4 ..., ... plain to NBC, Time and Ne wsweek
•• concerning a recent article coverage
. .. . on the Administration. {Dog- 1-688)
President’s request for letters to
the editor of Newsweek mentioning
the President’s tremendous .recep-
tion in Miss, and last Sat. Miami •
Doljfain football game, (Dog 1627} •
President's request that you take' .’
appropriate action to counter • ' \
biased TV coverage of the A dm. '■
over the summer. (Dog 16*54}
CONFIDENTIAL .. '■
October 14
4 October 10
October 14
, President’s request that you ask
Bogers Morton to. take action to
counter Howard K. Smith’s re- •
marks concerning the three House. ;
seats lost by the GOP this year*
(Dog 1558) '
■ October S
270
PRESIDENT'S REQUEST --
TO:
P. Bucwnaa
ITEM:
DATE:
President's request that appropri-
ate columnists be informed of the ■
extemporaneous character of
Presidential press conferences. .
{Log 1551) .
October 10
. H. Klein ■ . .. . President's request that you
• demand equal time to counter* * ''
' John Chancellor's commentary
* < regarding the Haynsworth nomina-
. ■ . tion'. (tog 1559)
October 7
H. Klein
A. .Butterfield *
President's request for a report on
what action is taken concerning ; <■ :
Sen. Muski's appearance .on the *
"Merv Griffin Show. ** * ' * . .
• •
President's request lor a.
. report what resulted from 'our •
PS efforts following up the Friday ' \
Press Conference. (Log 149S)
October 8
October 3
B. Klein
President's request that we have .
the CHICAGO TRIBUNE hit
Senator Percy hard on his ties
with the peace group. (Log
■U95) CONFIDENTIAL
October 3 ‘
H. Klein' 'President’s request for letters to
the editor regarding Newsweek's
lead article covering the Pres-
i . .. . - .. ident's U. N. speech. {Log 1443)
September’!
H. Klein
President's request that we counter
Ralph Nader's remarks regarding
Virginia Knauer accessability to
the President. (Log. 1404)
September
271
PRESIDENT'S REQUEST --
DATE:
H. Klein
Ron Ziegler
H. Klein
A. Butterfield.
?. Flanigan
Dr. Kissinger'.
President's request that yoU V.
. attach Life Magazine's editorial'. .
accusing the Administration of '
creating a Coherence Gap. .
* ’{Log 1366) ■ , r ..* .• ■ *.
■ ; President's request that you
.'contact Howard K. Smith and ...
give him the true record on . . .
. what the Administration has. ' , . , -
-done. (Log 1367)
■ a - .. .. ■
i Sen. Kennedy's Boston speech’ ; ,
. alleging that the war in Vietnam
remains virtually unchanged. . ,
(Log 1292) . ’•/ v
tenth el' I
K. .Klein.
Ralph Nader's charge that the- ■
President pays little attention to ..
': consumer affairs. (Log 1293)
• t . , *; *
' Arti'cle hy Jack Anderson which
alleges that some U.S. officers
. in Vietnam favor Thieu’s hard
line over the President's
moderate policy and are' sabotag-'
ing the truce efforts. (Log 1281)
President's request that you in- ‘
■ form Walter Trohan about our
'substantive programs and that •’
you place the blame for inaction ■
.on the democratic Congress. •'
■ (Log 1246) .:
.s’ •’ .September i
. September 2
• September i
272
4 ..V ■ \ • .
PRESIDENT'S REQUEST -- V
TO: 7 ITEM: * ' ’ DATE:
j .
Ehriichman ' " President request for a report.
on possible answers to Evans-'
. 'Novak charge of an Administra-
' "-tion retreat on tax refprhi. •
(Log 1224)
September 23
Dr. Kissinger : President's request for a report^ _ SeptesAber 16
. , on Walter Cronkite's comment
• • ‘ • that the South Vietnamese did not
■ _ observe the truce resulting from . /*
Ho Chi Mirth's death.' (Log 1154). .’ -*■ -
RECORD OF TIME OF ARRIVAL AND DEPARTURE FROM BUILDINGS
(Aflor Normal Duty Hours)
277
Exhibit No. 12
THE WHITE HOUSE
WAS H INGTON
December 30, 1971
MEMORANDUM FOR:
FROM:
JOHN DEAN
CHUCK COLSON
The attached is much too hot for me to handle. Smathers
called me, I assumed, just to talk politics. The moment he
began to get into the subject I turned on the recorder. Hence
you have the full transcript attached.
Obviously he makes a very good point and I would assume if
there is anything we can do properly, we should. On the
other hand, in view of the personalities involved here I
e would think this has to be handled with extreme care. I
assured Smathers 1 would "ct back to him quickly, so I
would appreciate your earliest advice as to what we should
do. Please discuss with me before getting this too far along.
I do think, however, in view of Smathers' decision to supptfrt
-the -President next year that we had better attend to this and
not let it slip.
For obvious reasons, the attached should be used only by you
and left in the form it is in.
278
Conversation with George Smathers, December 30, 1971
S: Anybody with whom you talked about- this. . . Here is - hat occurred to me.
It involves a case by aman by the name'of Calvin Kovem He was convicted
about 1963 for having borrowed money from the Teamste Union and he
borrowed more than he actually spent arzlthc allegations v e generally that
they had made a kick~back of some kind to Hoffa and he vns one of the victims
of Bobby Kennedy. Anyway, they fought the case for a lo; g time, Calvin
Kovens is a very prominent Jewish citizen here in Miami. He's been president
of the Miami Beach Kiwanis Club, head of the United Fund for the whole area,
he*s headed the Jewish Greater Miami Federation, etc. Anyway, to make a
long story short, he finally had to go to jail at Egman Field. He got an A32
sentence which meant the judge said, well any time you want to turn him out
it*s up to the larole Board. I personally am not a criminal lawyer or anything
and don't know my ass from third base about half that stuff, but anyway, I took
his case before the Parole Board and the Parole Board granted him a parole
beginning, however, this was at the last meeting of the Parole Board, where
they turned Hoffa down and Bobby Baker and all the others. They agreed to
hear our case and they granted parole. They said, however, it would begin
May 1, the order read, "We grant parole for judgment, parole is granted to
begin May 1, 1972" so that meant he had to-Berve 4 more months. -Now,- what's
happened is this. In the meantime, this fellow's had a very serious heart attack
and the doctor out at Egman Air Force Base, where he is, which is also a
maximum freedom prison outfit, and the head cardiologist out there, Major
Foper, as well as the Superintendent of the prison, both wiii say that they think
the fellow ought to be released to go get some bettor medical attention. He's
going to be released anyway in May. The Parole Board.has already said he's
-out. Now, I was talking with Bebe about-lt and said, "Bebe^it looks lik<* *o W
that this would be a pretty good thing to do.-” There are no minuses, the guy ~ .
has already been paroled except for May, he's the most, popular Jew -in-Dade
County, South Florida; the fellow I had speak foir him before-the Parole Board
is a guy named Rabbi Irving Lehrman who rs~fc:~president of the National
Rabbinical Association out in New York. In other words, he's the head Jew
for, the head Rabbi for all the Rabbis in the United States. Now, he appeared
before the Parole Board on behalf of Kovens. So*- everybody is for this guyi
and there's nobody, under the circumstances, who would do anything but applaud
a move by T the President at this point to go ahead and say, ; "look, : I’m going^' .i* . '
the Parole Board said he could get out on May'l and in. light of the fact that. he's
had this heart attack which Major Pope r has, the head cardiologist, >*said he v
needed some additional treatment, we're going to -let him out"/ The President
would do nothing but gain supporters, and that doesn't mean he's going to get a
lot of Jewish vote down here; 1 never got it except when I ran for Congress tin
first time,, but I newer got it after that. However, I always did get some. , But
this I know would at least give the President, and those arc going to help him in
this area, a very stYong basis of going to the Jewish community and saying; ”Foj
God Sake s, the one guy that went to bat for him was th„ President when he had
this sickness”, and then the President is totally defended because he get's, well
279
2 .
the Parole Board has already granted him release as of May 1, 1972, he was
serving a three year sentence and when he had 18 months left to go, after May,
they let him out on May 1 and since then he’s had the heart attack, I think there
are some pluses in it and Bebe said, *. I think he ought to do it, I said, 1 agree,
there's no negatives on this side, it's all pluses,
C: I don't know how mechanically it works, George, whether once the Farole
Board has made a decision and has taken jurisdiction that way, whether it's in
or out of the President's hands, but in any event let me check into it with the
fellows who will know and,., ,
S: Let me just say this. The Parole Board, I'm sure of this, denied Hoffa
the hearing, they wouldn't even hear him and the President went ahead and
released him anyway, so I'm sure the President can do it and I'm sure, actually.
Chairman George Reed would probably approve of it. , ,
C: Well, that's the thing I want to find out. If it's' done that way it's the probably
quickest and simplest. But, as 1 say. I'm not very familiar with this. . . how the
process works. . .
S: Me*neither. I've never been over there before in my life, I told them, and %
didn't kiiow *f I'd tvci' be tbexc n gahi, I certainly uujjcu I v^ouiuu i attu eeilainxy
•not for any friend or myself. Anyway, Chuck, 1 really think that politically it's
a very astute thing to do and it would not do anything but get, gain credit and
commendation for the President. 1 can guarantee that. There's no backlash to
this at all.
Cj Let me see what I can do with it George. ^4111 check right into it this morning.
Delighted you're going to be with us and on the team next year.
S: Well, I will be.
C: That's terrific. Who do you think is going to win the Florida Democratic
Primary?.
S: Well, I suspect now that you've got Lindsay, and McGovern and Gene McCarthy.
Gehe has not said whether he's going to enter it or not, but if hecomes down here
it's going to be so screwed up, frankly, it will be meaningless. They keep screwirs
it up and if Wallace runs as a Democrat, which I hope he does, so that will keep
him from running as an indepdent. Wallace, could actually come cut with the
most votes. It will be so divided — Wallace with a 14 or 15 percent vote might
have more votes tham anybody,
C: It would be a setback to Muskie wouldn’t it?
280
3 .
S: Be a terrible setback to Muskie. Everyone guy that gets in hurts Muskie
and Humphrey coming in is going to hurt him because Muskie thinks he's going
to carry down here in the South end, but Muskie's not carry I don't believe. I
think Humphrey is going to get a hell of a lot of votes down here in Dade. Now
Jackson will get most of the votes -- unless Wallace runs -- outside of here
from let's say Palm Beach north, Jackson will do great.
Cs And Jackson will do well with the Jewish vote. *
S: Well, Humphrey is going to cut into that a lot.
C: It will be an interesting one to watch.
S: It really will be and that crazy I-Iartke said he might come down. I dont
know. He's one that really needs to go to a psychiatrist.
C: God, you'd think a guy would be happy to sit where he is, but...
S: You know, the polls show that Lindsay can beat him in Indiana as a Favorite
Son. Lindsay!
C: Lindsay knows how to rnanipnlat? media. *
S: Lindsay is great with it. That's what he's got going for him. And they love
him and he handles it so beautifully. . .
C: . . Doesn't have much else going, but he's got that going. Well, I list getting
him out of the Republican Party one of our major accomplishments this year.
S: I thought that was a great thing and to get him over there with the Democrats
was double. If he'd beedme an Independent it would have been tough, but to get
him in thefe where he is now, he just really screwed it up good.
C: Well, good to talk to you George, my friend and I'll go to work on this right
away.
S: 1 see your friend John Haldeman sitting out here, but He's a funny fellow, we
just say hello and that's all. I hardly know him. I don't mean funny, but lie's
very close, very ungregarious.
C: Yea, that'e the way Bob operates, cause he's got so goddamned much he's got
to do. *
S: 1 know it, but anyway. Chuck, this can do nothing but help if there's some way
mechanically it can be done. I guarantee it will help and X gua rpntee it won't hurt.
C: Alright, let me get to work on it.
281
Exhibit No. 13
HERB KLEIN
FROM:. CHUCK COLSON
FYI - EYES. ONLY, PLEASE
September 25, 1970
MEMORANDUM FOR H. R. HALDEMAN
The following Is a summary of the most pertinent conclusions from
my meeting with the three network chief executives.
1» The networks are terribly nervous over the uncertain state of
the law, 1. e., the recent FCC decisions and the pressures to
grant Congress access to TV# They are also apprehensive
. about us. Although they tried to disguise this, it was obvious.
The harder I pressed them (CBS and NBC) the more accommo-
dating, cordial and almost apologetic they became. Stanton for
all his bluster Is tho moat insecure of all.
2# They wore startled by how thoroughly we were doing our home-
work -- both from tho standpoint of knowledge of the law, as I
discussed It, but more importantly, from the way in which we
have so thoroughly monitored their coverage and our analysis
of it. (Ailin’ a analysis is attached. This waa my talking paper
and I gave them facts and figures. )
3. There was unaraimou* agreement that the President’s right of
access to TV should in no way be restrained. Both CBS and
ABC agreed with me that on most occasions the President speaks
as President and that there is no obligation for presenting a con-
trasting point of view under the Fairness Doctrine (This, by the
way, is not the law -- the FCC has always ruled that the Fairness
Doctrine always applies — and either they don’t know that or they
are willing to concede us the point. ) NBC on the other hand argues
that the fairness teat must be applied to every Presidential speech
but Goodman is also quick to agree that there are probably instances
In which Presidential addresses are not ‘'controversial*’ tinder the
Fairness Doctrine and, therefore, there is no duty to balance.
All agree no one has a right of ‘’reply” acc that fairness doesn’t
mean anawerlng tho President but rather Is ’’issue oriented.”
This was the most important understanding we came to. IV hat Is
Important is that they know how strongly we feel about this*
282
4. They are terribly concerned with being able to work out their
own policies with respect to balanced coverage and not to have
policies imposed on them by either the Commission or the
Congress. ABC and CES said that they felt we could, however,
through the F CC make any policies wo wanted to. (This is worry-
ing them all. )
5. To my surprise CBS did not deny that the news had been slanted
against us. Paley merely said that every Administration has
felt the same way and that we have been slower in coming to
them to complain than our predecessors. He, however, ordered
Stanton in my presence to review the analysis with me and if the
news has net been balanced to see that the situation is immediately
corrected. (Paley is in complete control of CBS — Stanton is
almost obsequious in Paley , s presence.) -
6* CBS does not defend the 0*Brlen appearance. Paley wanted to make
it vary clear that it would not happen again and thbt they would not
_ .permit partisan attacks on the President. They are doggedly deter-
mined to win their FCC case, however; as a matter of principle,
even though they recognise that the v made a mistake the'*’ den* t
want the FCC in the business of correcting thfcdr mistakes.
7» ABC and NBC believe that the whole controversy over "answers"
to the President can be handled by giving some time regularly to
presentations by the Congress — either debates or the State-of-
The-Congress -type presentations with both parties in the Congress
represented. In this regard ABC will do anything we want. NBC
proposes to provide a very limited Congressional coverage cnco
or twice a year and additionally once a year "loyal opposition"
type answers to the President's State of the Union address (which
• has been the practice since 1966). CBS takes quite a different
position. Paley*s policy is that the Congress cannot be the sole
balancing mechanism and that the Democratic leadership in Con-
gress should have time to present Democratic viewpoints on legist
lation. (On this point, which may become tho most critical of all,
we can split the networks in a way that will be very much to our
’ advantage,)
283
Conclusion:
I had to break every meeting. The networks badly want to have these
kinds of discussions which they said they had had with other Admin-
istrations but never with ours. They told me anytime we had a com-
plaint about slanted coverage for me to call them directly. Paley
said that he would like to come down tsi W ashington and spend time
with me anytime that I wanted. In short, they are very much afraid
of ns and are trying hard to prove they are "good guys."
These meetings had a very salutary effect In letting them know that we
axe determined to protect the President’s position, that we know pre9 ,
clsely what Is going on from the standpoint of both law and policy and
that we are not going to permit them to get away with anything that
Interferes with the President’s ability to communicate.
-Paley made the point that he was amazed at how many people agree with the
Vice President's criticism of the networks. —He also went out of his way
to say how much he supports the President, and how popular the President
Is. When Stanton said twice as many people had seen President Nixon on
TV than any other President in a comparable period, Paley said it was
because this President is more popular.
The only ornament on Goodman’ s desk was the Nixon Inaugural Medal.
Hagerty said in Goldenson'a presence that ABC is "with us." This all
adds up to the fact that they are damned nervous and scared and we
should continue to take a very tough line, face to face, and in other
ways.
As to follow-upjnl believe the following is in order:
U I will review with Sianion and Goodman the substantiation of my asser-
tion to them that their news coverage has been slanted. We will go over
it point by point. This will, perhaps, make them even more cautious.
2. There should be a mechanism (through HerbjnKon or me) every time
we believe coverage is slanted whereby we point It out cither to the chief
executive or to whomever he designates. Bach of them invited this and
we should do it so they knew wc are not bluffing.
3. I will pursue with ABC and NBC the possibility of their issuing declar-
ations of policy (one that we find generally favorable as to the President's
use of TV). If I can get them to issue such a policy statement, CBS will
be backed into an untenable position.
284
4. I will pursue with Dean Burch the possibility of an interpretive
ruling by the FCC on the role of the President when he uses TV, as
soon as we have a majority. I think that this "Mat could be very
favorably clarified and it would, of course, have an Inhibiting Impact
on the networks and their professed concern with achieving balance.
5. I would like to continue a friendly but very firm relationship when-
ever they or we want to talk. I am realistic enough to realize that we
probably won’t see any obvious improvement In the news coverage but
1 think we can dampen their ardor for putting on "loyal opposition"
type programs. - - —
I have detailed notes on each meeting If you'd like a more complete
report.
Charles W. Colson
285
Exhibit No. 14
«EA) RiJ^T^ /
November 23, 1971
}.«:<ORJU«UM FOR; Jib S. KAGRliDDR
FROM: :<EK RIRT2
ACTION is an -agency that we should be able to use
politically. It has a good linage among young people,
is in direct day-to-day contact with there and is
unencumbered by a lot of bureaucratic structure.
Wfe should hold a meeting soon with Blatchford and
suggest:
1} lie dj a lot of speaking on campuses and in high
schools. He identified well with younger people
and has the kind of program they like to hear about.
2) We use their recruiters (who cabled to 450,000
young people last year) , advertising program, public
relations effort, and public contact people to sell
the President and the accomplishments of the
Adr.-.i.sis oration . Via should be involved and aware of
everything from the scheduled .-.ppearanccs of ACTION * s
recruiters to the format and content of its advertising
DISAGREE
286
Exhibit No. 15
o
THE WHITE HOUSE
WASHINGTON
o
October 11, 1969
MEMORANDUM FOR: MR. MAGRUDER,
Y/ould you please make sure that a hundred telegrams are sent
to former Vice President Humphrey commending him for his
courageous stand and thanking him for supporting- the President in
his statement yesterday. [ A ^
These telegrams should be sent from various points around the
country and be worded individually. . \ '■
V /l/v
Also would you get with Nofziger ancYwmrk out having people here
at the White House assigned to Goodell, Mathias and Percy. L»et
me know who these people are today. Each of these people will be
responsible to work out a program over the next week for sending
letters and telegrams, and making telephone calls to the Senators,
blasting them on their consistent opposition to the President on ever
thing he is trying to do for the country. This program needs to be
subtle and worked out well so that they receive these items from
th a i r h o m e districts as well as or h z r oi n t * a r ou n d th e countr v .
287
MEMORANDUM
THE WHITE HOUSE
WASH I SOTOS
October 14, 1969
• \
MEMORANDUM FOR; H. R. HA EDEMA N
From; J. S. Mag ruder i f.l\ t\
)n
V'v
iSubj: Campaign re Good ell, Mathias arid Percy
V* r e are doing the following regarding our proposed program on
Senators Good ell, Mathias and Percy: •
• • A :
On Senator Percy we have a group in Illinois and in other parts ^
of the country, who are sending telegrams and letters to him y_ *
criticizing him on his view particularly on the Avar but also on
all the issues that he s,eems to disagree with the President. This .
prog ram .1 think will be particula rly effective, in this case, because
we have many people who worked in. the Percy campaign who are
doing, this and are known. by the Senator to be legimate Republicans.
Regarding Goooell and Mathias, I would recommend the following: ^ j fr {
In discussing, this situation with Stan Blair, he indicated that the .re
was a meeting held in Baltimore between Mathias and some of his f
principal contributors. As a result of this meeting, Blair believes *,
we rare making some progress with the Senator and that a campaign ’ '/' r * /
along the lines we have mentioned would not only be unproductive bun 1 *
perhaps counter-effective. *
Good ell
also another
r .question. Because of. the active campaign ioz ^ r
yor in New York, it is the feeling of Torn Houston that we will not ^ “
ar.v effective work cone their until after the :r,a vc raltv election. '' > ✓
"A*:?*.
.-.iso, it is h is feeling tha t w e w ox: 1 d probably h a v e nc a f f e c t on S o v. a t
Good ell because he has decided which way he is going and that bur m
productive activity would be attempting to remove. him in a primary
contest next year. I would agree with both the' Mathias and GooccTl
ions and think we would be better to hold our
288
289
Exhibit No. 16
MEMORANDUM
THE WHITE HOUSE
WASHINGTON
October 14, 1969
r • V
MEMORANDUM FOR: H. R. HALDEMAN
From: J. S. Magruder
Subj: Campaign re Good
ell, Mathias and Percy
We are doing the following regarding our proposed program on
Senators Goodell, Mathias and Percy:
(58AX-
On Senator Percy, we have a group in Illinois and in other parts *
of the country, who are sending telegrams and letters to him
criticizing him on his view particularly on the war but also on
all the iss.ues that he s,eems*to disagree with the President. This
program I think will be particularly effective in this case, because
we have many people who worked in the Percy campaign who are
doing this and are .known by the Senator to be legimate Republicans.
Regarding Goodell and Mathias, I would recommend the following:
In discussing this situation with Stan Blair, he indicated that
was a meeting held in Baltimore between Mathias and some of his
principal contributors. As a result of this meeting, Blair believes
we are making some progress with the Senator and that a campaign
along the lines we have mentioned would not only be unproductive buU *
perhaps counter -effective. JO*##* *
Goodell is also another question. Because of the active <
Mayor in New York, it is the feeling of Tom Houston that
get any effective work done their until after the mayoralty election.
Also, it is his feeling that we would probably have no affect on Senator
Goodell because he has decided which way he is going and that our most I a —
productive activity would be attempting to remove him in a primary •
contest next year. I would agree with both the Mathias and Goodell
situations and think we would be better to hold our fire in these cases, r
&***•£-
campaign for f.J-f fifo
at we will not
291
Exhibit No. 17
I talked with Tom Houston last night regarding the need for an
aggressive campaign for both telegrams and letters, and he has
agreed to begin work immediately on both Mathias in Maryland
and Goodell in New York. He will have copies of his work as soon
as possible. '
I’ve also talked to Tom Evans in New York and he is quite interested
in helping us in this regard, and he will have sent between 20 and 30
telegrams and letters throughout the state from key people that
Goodell would be familiar with, regarding Goodell’s position on
the war. ..
292
Exhibit No. 18
TALKING PAPER - JEB MAGRUDER
1. Put someone on the Washington Post to needle Kay Graham.
Set up calls or letters every day from the viewpoint of I hate Nixon
but you’re huring our cause in being so childish, ridiculous and
over-board in your constant criticism, and thus destroying your
credibility.
. \
2 . Nofziger should work out with&omeone in the House a round robin
letter to the Post that says- we live in Washington, D. C. , read the D. C.
papers, but fortunately we also have the opportunity to read the papers
from our home districts and are appalled at the biased coverage the
people of Washington.'receive of the news, compared to that in the rest
of the country, etc.
3. Follow up on the yacht story - get something in Monday, etc. so
that we can get some mileage out of that. Also, see if you can think
of any other things to do to follow up on it.
4. Get some letters to the Kopechne case judge, congratulating him
on his courage in pointing out the discrepancies in the ca.se.
memorandum
THE WHITE HOUSE
WASHI.SOTON
May 6, 1970
H. R. HALDEMAN
\\
JEB S. MAGRUDE
MEMORANDUM FOR:
FROM:
Here is a report on the talking paper given to me ,ast week
1. We have a team of letter-writers who are pestering
the Washington Post from the viewpoint that was
' suggested. -»
2. I have asked Lyn Nofziger to work up the House round
robin letter to the Post.
\
3. We worked, as you know, on the yacht story with
Chuck Larson and the press office. Miss Nixon and
the Patricia were pictured in MONDAY and TIME.
The decommissioning has been mentioned in several
newspaper stories and a number of columns. It
was also featured on the TODAY show and the evening
news programs. Now that it has appeared in TIME,
I frankly think we have as much mileage out of it
as we can get - except to cite it from time to time
as an example of odr attempts to save the government
money.
4. We have arranged for letters to be sent to Justice Boyle,
complimenting him on his courage in telling the Kennedy
case the way it is.
294
December 23 , 1970
l\ SMORA VDUM F OR :
FROM s '•
SUBJECT :
H. R. KALDEMAN & MR. KLEIN
JE3 S. MAGRUDER
AP/ STAR ECONOMIC REPORTING
Our letters to the editors operation is sending tough notes to
the Sta r on its unbalanced coverage of the stock market. A
sample 6s attached.
Safire believes letters should be frpm . "investors" who need to
have balanced coverage. The investor would be a bull interested
in having public awareness of their confidence in the emerging
strong market. A sample ia attached. Our letters operation is
also pushing this line.
The AP dispatches from New York on the stock market are written
on a rotation basis. Last week the AP stories were written by
John Henry. Ke will not be writing the dispatches for 10-12
vreeks •
Safire is £ preparing a memorandum of how to publicise the
developing bull market.
ect Safire
295
pear He! it or:
aj one of the 30 million invertors/ it is i.mpor
have news of boll norkot get at least equal cevi
v i th 1 c s s f. av o r ah 1 e o c on o: ?. i c n o v s . Bu 1 1 ms rk o t j
on public confidence. That con fit; once is not s*
u n c-.qu a 1 covers a e of economic n e ws .
Very truly yours.
C r e i gh ton Br own
The Editor
The £tar
225 Virginia Avenue, Southeast
Washington, D. C. 20003
z?.nt to
■■rage
> depend
srved by
MEMORANDUM
THE WHITE HOUSE
WASHINGTON
MEMORANDUM FOR:
FROM:
SUBJECT:
January 28, 1971
STAFF SECRETARY
i
JEB S. MAGRUl'
SEVEREID COMMENTARY
ACTION MEMO
KR.
i/'lA-
NO.
P 1280
Attached are copies of the citizen letters to Severeid.
McCracken (via Sid Jones) did not think it advantageous to respond.
Sid Jones note attached.
297
1719 ;67th Street
Brooklyn
January 24, 1971
Director of National News I .
Columbia Broadcasting System i
51 West 52nd Street =
New York, H. Y. .
Sirs t j
With his usual polite disdain for all things Nixonian Eric
■ Sevoreid recently regretted a lack of ’’dramatic steps" within
the Administration to curb inflation. Among other things Mr.
Sevareid noted that steel prices during the Kennedy- John son
years rose 7%, but 12% during Mr. Nixon’s tenure. What Mr.
Sevareid didn’t examine were the causes of this inflation (which
steel prices reflected). j
As Mr. Sevareid was regretting Mr. Nixon's economic policies,
his compatriot, Joseph Kraft was writing ; in. the Washington Fost:
’’The academic economists [of the Kennedy Administration 3 nudged
demand ahead of production to the point of severe inflation."
President Johnson further aggravated this inflation when he in-
sisted on a "guns and butter" policy in the mid-sixties despite
an escalating war and repeated warnings fr-om advisers for new taxes.
!
Steel prices did average a 7% increase in eight years, with
the rise accelerating sharply toward the end. Mr. N?b:on was faced
with a terrible and stubborn inflation, yet no cne wanted drastic
dislocations to halt the inflation. Thus, the irate policies
now being followed.
e •
Mr. Sevareid mentioned non/of this. ’ Such reporting is the
basis of changes of journalistic bias.
1
Host sincerely,
Marry !Vachtel
298
Exhibit No. 19
April 26, 1971
CONFIDENTIAL - EYES ONLY
MEMORANDUM FOB:
FROM:
‘‘V
,, SUBJECT:
MR. COL5-QM
RON BAUKOL
i+rvts
Letters to the Editor
v$Sk'
You asked about the cost-benefit ratio of the Letters to the
Editor program. The current program was set up by Job
Magruder after a couple of abortive attempts by others.
The current one is a true under cover operation in which
letters are printed as letters from private citizens. One
girl is employed at the PNC to this purpose, and as you
know operates independently except for direction and guidance
from myself.
r?-
1 Currently she generates thirty to thirty-fivo letters per week
of which an average of two to three are printed. Most of the
letters written have as a goal reprinting in the Letters to the
Editor column, some however are written to the networks or
papers in such a highly critical ton* that we know that they
will cot be printed. 'Results are measured net in number of
letters written but in number of letters published. ...
The Cost of this operation thewis about fru>9 ro&n-Aaya, or f!00
per letter published la tine letters to Editor column- Papers u
ve now hit are the influential post. Times, Monitor, fjews wdek,
. • the Letters tothe Editor
column i3 the most viiualy read cart of the editorial page thus
a $100 tab for a good letter in the Washington Fost is pretty
cheap coixparedltowVyat spevsiou ctl^r public efforts.
WiMBBSataMra
■ <-4:>.-; , >:, w^AOiS;.’ *v^s^.rt$pgq
: *6«ser> .<i; •.*•'•>.•;>*.: r-:\-:>i#ZM ■& m.
enooer. cover operation in wnicl
tiers from^rivate citizen*. 1 * On
and y °"
300
V*c are taking two steps to broaden the -program. Thetfe steps
are proceeding slowly so the security of the program will not
be breached.
1. Expanding to include other newspapers in key states.
2, Estabfiahing satellite operations so that the person at
the RNC represents merely the stimulus to (unpaid)
letter writers in key areas around the country. The
first satellite we will establish will bo in California.
I attach the full report for this week. Ae you examine the letters
you should keep id mind that among the criteria apparently used
for publishing a letter are: timeliness, relation to what the
newspaper itself has aaid, quality, and the presence of a unique
twist. These factors -plus the fact that results are measured in
letters published, not letters sent, show why this operation needs
to be a quality, not quantity, endeavor.
301
Exhibit No. 20
Sines yesesreay afternoon vhen the President's speech vas announced,
eke following seeps were taken by 1701 to support tr.ee speech:
1. S' ..^z.i : £.7 and Oils developed a 24 -point ’’gene plan" (Tab A) which
b.^or. to be iapleuen tec as soon as 3.oa Ziegler announced the
speech. ... . •
K tarings between •.’hire House anc 1701 personnel were held all
afternoon — a "call sheet". (Tab B) was developed and given
to note than 75 staff members at 1701 urging that: to send tele-
grams to the President, letters to cha Hill, and letters to the
ec-tor. 1701 worked until 1:00 e.n. and soaa of the results
follow.
1. A litter (Tab C) from Trank Dale will go today to 40,000 Nixon
workers from ’££ and. *72. In* latter will urge everyone to
send the President a telegram.
_4. T.Vu Press Department scheduled press conferences around the
country, got endorsements by prominent leaders (e.g. . Cover-
r.:r long on) , prepared remarks for a Frank Sale speech, pre-
pared e statement for Ihr. Kitcfaall^ distributee audio and
video statements free Bepreseazativa Ford, and Senators Dole,
Tower, Brock, and Curnay , and’ 1 accivazcsd the attack end re-
sponse nachaniwr.s *£ the' veriooa state N i xo n c o nr . i trees.
Stmtway’s report is at 2sk fr*
5 . The. ' Finance Committee ■ isitiaced ewer 503' calls- Their report
is at Tab •£. • S e rna-one who • previgsaly eppoasd the ' President .
gave $5,000.
d. The Spokesmen Bescurces Division contacted our surrogates,
celebrities, athletes, etc. They are hlso programming their
speakers today with speech inserts, etc. Their report is at
Tab F.
302
v^wh cr.e of the GO? ar.d Li:-: on score 0 r 5 ar.isczi 0 r.s- Their
report ii at -ab G.
During the evening Migruoer's office coordinated all of the
response at 170 j. ar.d assigned various members of the staff
to sections or the campaign which most needed assistance.
A quick analysis or sene or the other results follows 1
a. Our volunteer section contacted 163 White House and Admin-
istration wives who volunteer at 1701. Of 163, 149 promised
to call 10 tner.es . AiJ. volunteers at 1701 today are on the
phones.
•• 7
b. he- ray Chouiner reacted all_n^s__ballot security cha irmen .
. . ' . *
c. Clayton Yeutter called his form, agri-business, and midwest
political paople.Maay of Clayton's people had already
, started the telegram chain going by the time he’ reached
d. Rierz* youth operation made 310 calls. One call produced
2,0u0 calls to our Florida Toung Voters Committee. Rietz
expects nis organized cm to ultimately be responsible for
10,000 calls. Youth group is also getting srktener.ts of
support from young athletes, entertainers, etc. Riete is
e*so planning to gin up pro-Rli demonstrators where neede d.
e. The entire November Group staff in New York stayed up half
the night —king calls within the advertising and public
relations communities, especially in New York and Los
Angeles.
f. Thirtypf iwe suite I Iron doctors' chairmen participated in
the teiegEm caapaiga. _
■ ■
#• AStOod to sake' calls. A groOp
of Rabbi* endo rsed the President's doves. Press release to
So out on thia.
fc. Bob Marik plugged in his California telephone Deration boil-
er room sg cake cell* Soliciting telegrams.
i. Our Lawyers Committee contacted leaders in various legal
associzuons, e.g. , A.B.A., Y oung Lexers, etc. Lawyers
ir. 15 states were involved.
j. Dan Todc worked with Bud Evans at the White House in contact-
ing the elderly.
303
7cr.v rilcc in 27 cf his ethnic sr.d national— . ■*
icies pwcple.
1. All veterans organizations were contacted and agreed to
solicit telegrams iron their state and local chapters.
Phone call groups are following up today. Endorsements
are being solicited from commanders .
The American Legion national commander conducted a press
conference in which ha strongly supported the President.
n. Alex Amencaris of 1701 and Mo Marumoco of the white
House contacted 2C0 Spanish- speaking leaders. Spanish-
speaking TV and radio stations also called. One man
agreed to get 2500 telegrams from 21 cities sent.
n. Betty Nolan’s "letters-to-the-editor" apparatus began to
crank up her troops and we expect over 1200 telegrams as
a result of this operation.
o. .Paul Xayser's Business committee reached 43 * ey national
business and industry leaders. Of the 43, 4? agreed to
help. They are following up today.
p'. Pat Eutar has cranked up Be pub 1 i c an women’s types through-
out the country and instructed them to see that there is
follow-through at the local level. Expect this to be a
real strong source of support. Pat estimates she's reach-
ed 150-175 women. Barbara Franklin is helping in this regard
<i* Barbara made 46 calls last night to women leaders around
the country, concentrating on those outside the Republi-
can Party or campaign apparatus.
: Mr. E. R. Haideman
Mr. Charles V;. Colson
Mr. W. Richard Howard
Mr. William Rhaticmn
Mr. Frederic V. Kalek
HUBER KORX"'
SUBJtCi
1 CHRON.
1 SUBJECT
304
is. — Sh ucwiv '*
cer.z ’s speech vie el y ro editorial writers, broadcast
writers, college earters , etc. — — Shuavay /Ealsion
Hi Cocrci hating with the calls vriich will be
— people (Colson, 2uchar.cn, Scf ire , Klein,
iron 1701 key editors, colunnists, etc.
12. Alert state attack aechaniss to feed to Shurvay criticise: of
the President by Denocrats and others in the states. Then
' **; — ‘ arrange a response at the state level. . Shuaway
— 13. -Alert state attack — echanisn to send in supportive editorials
which will then be nailed out an c used by other editors as
guest editorials. . — Shunway
14. Get concents iron Jewish leaders. — Odle/Coldberg
15. Get corrects fron veterans leaders. — Ocle/^aylor
16. Get comments fr on leading lawyers. Talk to Thomas V. Evans. —
Piliero/5edaa • '• .vv/. ’ • • . . • ' • " ;
17. Get line out to financial leaders, businessmen, etc. — Stans/
■ Sloes
• IS. -Crank in agricultural and midwestem -leaders, perhaps brief fain
ecitcrs. — - Veutter .•
19. Crank in doctors and dentists. — Stover
— i0; — Have Frank Dale cake najor statement. — "Shusway
'21. Consider lunriss Kc, Elteheli make cajor statement. — Kegruder
22. Get CSC spanker {h afrm c n l) at 17Cl's Tuesday 7:30 c.a. staff
Beeting-tD brief OS substance and correct line. — Shuauay
23. Instruct at staff netting that everyone should spend Tuesday
on this project and report by 5 p.a. as tovhat he did. —
Malek/Odic •
24. have holar. activate letters to the editor apparatus. Concentrate
also on lettcrr. to those who are critical of President.
cc: lit. V!. Richard Howard
mace by white House
aiegler, etc.) call
— Shunvay
305
Exhibit No. 21
. wrw ° J '**“ r y '-
Kay ,15, 1972
MEMORANDUM FOR
FROM
SUBJECT:
Earlier reports mentioned plans for a rally on Saturday
evening, May 13, at Bay Front Park, Miami, Florida. Because
of differences of opinion in the Cuban community and some
internal jealousies, .it was thought best to cancel the rally
and to substitute a motorcade on Saturday afternoon.
Accordingly, on the afternoon of Saturday, May 13, a motorcade
of 200 automobiles and 60 trucks was assembled at the Central
Shopping Plaza, 37th Avenue and 7th Street, NW, Miami. The
•vehicles were placarded with signs such as “Nixon - We Back
You 100%" and "Free the POWS Now," as well as a number reading '
"Tell It to Hanoi." The motorcade lasted two and one-half
hours (2:00p.m. to 4:30 p.m.); starting at the Central Shopping
Plaza, the route vent south on 37th Avenue to the Tamiami Trail,
then to Biscayno Boulevard .and then all the way back up Flagler
to 32nd Avenue. As the motorcade proceeded with lights on,
' more than 200 more vehicles joined the caravan, having a total
of nearly 500 vehicles (automobiles and trucks.)
The reactions of the street crowds on the way was very favorable.
The route took the caravan through areas populated heavily by
Cubans, and there was such shouting of "Viva Nixon.*' Traffic was
nearly paralyzed. The police were sympathetic and helpful. At
one point when the caravan stopped while police cleared traffic,
one store took the popular music off its outdoor phonograph
speakers and played The Star Spangled Banner.
Persons ob th* scene stated that Miami Herald coverage was
biased against the motorcade in that it published no photographs
with strong pro-Nixon sentiment, but only those which could be
taken two ways; e.g. , "Free the POWS now.” The Herald report
(Section B, page 1) should not be relied upon as an accurate
description as the actual event and the reaction thereto was
far more favorable to the President.
THE HONORABLE JOHN N. MITCHELL
G. GORDON LIDDY
Reaction to the President's
Vietnam response.
-687 0 - 74 - 22
306
Senators. It is thought that in excess of 500 letters
and/or telegrams were generated by the scheduling
apparatus.
e. Cur White. House/ Administration wives program contacted
292 more people on Wednesday bringing the total con-
. racted to 1,094. More than 60 wives participated in
Kanjvietz* vigil.
2. The Citizens/Voting Sloe Divisions concentrated their efforts
on generating telegrams end letters to key Senators; organi-
tf »c vigil on the Capitol steps; anc obtaining endorsements.
a. Telegrams and Letters. All of the Citizens and Voting Bloc
Directors worked on generating telegrams and letters to the
key Senators. Over 3,000 calls were made, many by the
Youth Division with a resulting flood. of telegrams.
b. Capitol Hill Vigil. A coordinated effort of several Citi-
zens /Voting Bloc Divisions led by Youth and including
Women, Blacks, Spanish-Speaking, Lawyers, and Older Amer-
icans resulted in a highly visible and successful rally at
Capitol Hill yesterday noon. Over a thousand people turned
out, ar.d television cameras were present. Full coverage on
last evening's news programs (including the networks) was
given to the demonstration, with favorable comparisons to
the Cranston demonstration which was held at 6: CO a.n.
yesterday morning. Even before the vigil occurred, it had
received a positive mention on the TODAY show which helped
t6 counter the effectiveness of Cranston’s demonstration.
The vigil was also covered on this morning’s news shows
(e-fi.. TODAY).
COXFIBTSTIAI
307
c. Indorsements. .. All Citizens-/ Vo ting • Blocs continued to work
on obtaining endorsements from prominent individuals and
r.azionax anc _oc£.x groups, jus t a tew examples ct t r.e
many endorsements received.:
Youth: Ten of the 13 members of the Denver City Council.
Spanish-Speaking : rive Spanish-Speaking community leaders
in each of five key States; all Cuban radio stations in
Florida; President of the Spanish -American -Business Asso-
ciation of Chicago (a Puerto Rican organization).
Women: Presidents of the National Federation of Business
and Professional Women > General Federation of Woman* s
Clubs, and Women's Rational Republican Club.
Veterans: All American Legion Department Commanders have
been requested to go to the media in their state with en-
dorsements; Veterans organizations in 15 cities have pas-
sed resolutions and placed these resolutions in local media.
Lawyers: Independent Lawyers Committees in support of the
President’s Vietnam Policies have been formed and have
tentative plans to place ads in The Evening Scar and The
New York Times.
c - Plans. The Citizens/Voting Bloc Divisions will now place
maximum effort on staging events (vigils, rallies, etc.)
which would receive coverage on a local or regional basis,
Positive demonstrations of support are already planned at
several campuses (including-USC) , and we will try to
counter adverse demonstrations whenever desirable.
In addition to Stimulating local efforts, the Citizens/
Voting Bloc Groups are arranging visits to Capitol Hill
offices by groups of constituents. As one approach, a
schedule of all conventions in Washington for the next
veek has 'haeh -.o6tmined, cad -the. Citizens/Voting Bloc
iittrkdzig. Vich "the convention directors to :
organize out-of-town conventioneers to visit their
Cofifre— catfft.
CONFIDENTIAL
308
‘ THE rtE-EL-C.iON Or THE PRESIDENT ’
XAGEUTIR ug?j; COPY
^-l-'iGRJDER SUBJECT
COLE CHROX.
ODLt SUBo ECT
Exhibit No. 22
THE NEW YQXK TIMES. W EON LSD A Y. MAY 17. lit*
ABVIintlMBfl A9Vt»TlS tWNI
THE PEOPLE
VS.
THE NEW YORK TIMES
The May 10th New York Times editorial, critical of President Nixon's
closing ot North Vietnam land and sea supply routes, argued that the
President's actions ran “counter to the will and conscience of a large
segment of the American people.”
How “large"? The Tints' self-serving assertion would suggest that the
majority of the public opposed the President's actions.
BUT WHAT DOES THE PUBLIC SAY?
—A telephone poll, conducted by Sindlinger £ Co. of Swarthmore, Penn-
sylvania, on May 10 found that 76% of the public supported the Presi-
dent in his efforts to end the Vietnam war. 23% were opposed.
—A poll by Opinion Research Corporation of Princeton, New Jersey, on
Msy 10, was almost identical. 74% backed the. President's decision to
mine the North Vietnamese ports; 21% did not.
—The well-known Harris poll questioned 1400 voters on May 12. 59%
approved the miping of Haiphong while only 24% disapproved.
—Finally, the American Broadcasting Company's poll of May 11. Again,
59% backed the mining, and 28' < did not.
WHO CAN YOU BELIEVE-
THE NEW YORK TIMES OR
THE AMERICAN PEOPLE?
Ms. Phyllis Borden
Prof. Edward M. Gershfield
Rabbi Abraham Gross
Mr. Nash Kestenbaum
Mr. £ Mrs. Michael LeU
Mr. £ Mrs. Richard Light
Dr. Hillel Seidman
Mr. £ Mrs. George Stilianoe
Mr. £ Mrs- Alan Timpson
Ms. Patricia O’Leary, Coordinator
Scenic Drive
Croton-on-Rudson. New York
914-271-3175
310
Exhibit No. 23
MEMORANDUM
THE WHITE HOUSE
WASHINOTON
March 9, 1970
MEMORANDUM FOR: MR. MAGRUDER
')
I have talked with Connie Stuart about the need to follow up on the
highly inaccurate article in the NEW YORK TIMES Magazine this
Sunday regarding White House social activities. There are
numerous factual errors and other very erroneous implications.
I suggested to Connie that she might want to give the facts to
another rival columnist and let him go to town and start a battle. j
Also, I think we ought to get some letters to the editors going, and!
show some indignation and activity on this front. They should not
be allowed to get away with this. Perhaps you. Herb and the others
can think of some other possible points of attack.
Would you please give me once every two weeks a summary of |
the various hatchet-man operations -- letters to the editors, counter-
attack, etc. , so^that I can report to the President on the activity in
this regard.
We also need to be sure that the Pat Nixon trip story keeps going
because there won't be another such trip in the near future. I have
talked with Connie about this, but you should follow up too. For one
thing, let's be sure the National Committee builds this up. I think
Leonard ought to do a whole issue on the Pat Nixon Tour, and we ought
to really push for maximum continuing coverage on the things that were
accomplished from this.- We could get back to the cities where she was
311
SPECIFICATIONS FOR MAILROOM SERVICES
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15 AUGUST 1973
312
Exhibit No. 24
jxJ) y/^^' y/uH*/' ?.
Diana:
Per our telephone conversation the enclosed letter and two page
statement is to be mailed. It should be mailed in envelopes which
have the appropriate return address (sample enclosed). The mailing
should be stamped rather than using the postage meter.
It is to go to the following:
{ Democratic 1968 Convention delegates (B19)* ALk S"7 fiTES
Democratic Congressmen and Senators (021) (024)*
County and State Democratic Office Holders (029)* - '
2 .
3.
Democratic State Legislators (Code not yet determined)*
Editorial Writers (C02) •••' .*»•>*<■ ..
Editorial Personnel of Radio and TV Station (P15)
With regard to the above, the #1 group should be mailed-by Tuesday,
March 16, 1971. Groups 2 and 3 should be mailed’by Friday, March
19.
Groups 1 and 2 (as indicated by the *) are for the following states ONLY :
Alabama South Carolina Tennessee
Oklahoma North Carolina Missouri
Louisiana Florida Virginia
Georgia . Texas West Virginia
Arkansas Kentucky Mississippi
Group #2 is the only group for which new labels have to be made. By
new labels I mean that the type of label used is to be altered, and a
fake identification code is going to be added. I understand that changes
will also be made in the actual name and address. Do whatever is
necessary to alter the appearance beyond identification as coming from
us. Keep a file of what you do so that we can either use it again, or
change it for another mailing should one arise in the future.
If you have any questions, please call me.
15 AUGUST 1973
313
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U&ou', SMorith'
$7m*t-Coart/
Dear Friend:
There has been a great deal of criticism of President Nixon's
Southeast Asia policy in the past few weeks. Even though I am
of the opposite political party, I happen to be one pf those
who believes that what the President is doing is absolutely
right for the country. I don't see any other feasible alter-
native if the President is to be successful in ending the war
in an, honorable way.
Recently, Mayor Yorty of Los Angeles wrote a very perceptive
letter to a former colleague of mine pointing out some of the
deficiencies in the positions taken by the President's critics.
The letter received very little attention in the nation's media.
Because I thought that Mayor Yorty so well expressed the case
for President Nixon's policies I made a summary' and am taking
the liberty of sending it to you for perusal.
Florida made it possible for me to serve in the Congress for 22
years — under four different presidents. It seems. to me that while
each developed a foreign policy ' somewhat different from his pre-
decessors, nevertheless each of them basically advanced the
principle that the United States, while neither an aggressor nor
an isolationist, was a strong, responsible, realistic nation
that believed in the right of self-determination and personal
freedom and was willing to make certain sacrifices calculated to
assist that cause. President Nixon's foreign policy, while some-
what different because of changed conditions, nevertheless main-
tains the continuity of keeping America responsible and respected.
I am certain that no one wants
more than does our President,
be supported by all.
With best wishes.
peace nor appreciates it advantages
In times like these, he deserves to
15 AUGUST 1973
314
Exhibit No. 25
Division
SPECIFICATIONS FOR HA 1 LROOM SER V TC ES
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15 AUGUST 1973
Teamster Executive Board
Endorses Nixon's Reelection July 17, >9.72
The general executive board of the International Brotherhood
of Teamsters today took an unprecendented action responding to
the deep feelings of the members, evident in the conversations
and communications with local union representatives from across
the country. We find ourselves at odds with the traditional and
sometimes almost reflex support of the Democratic national
ticket.
i
Our members work hard for their wages, they are entitled
to what they earn, and they figure that the government ought to
get off our backs and out of our pockets. The policies of
Mr. McGovern only promise more of the "big brother” not less.
Our members are, for the most part, hard-working family
men and women who are not. in favor of legalizing pot, encouraging
abortion, and granting amnesty to those who desert our country
in time of need.
Although the majority of the executive board of the Teamsters
are Democrats, we cannot and will not endorse the 1972 Democratic
ticket .
more
316
Exhibit No. 26
X.W.AYF.R jOHORNSF.N'/MACDONALD. INC.
TELL IT TO HANOI COMMITTEE - STATEMENT OF ACCOUNT
Hay 1 970 - Newspaper Ad
Space & Production
July, 1970- Newspaper Ad (8/3/70)
August. ,1 970- Newspaper Ad (8/1 8 & 19/70)
3 98,440. 78
17,997.66
76,593.64
Total Billing
8 193,032.08
Payments Received:
Tell It To Hanoi Committee
5/8/70 - Mfg. Hanover Trust Co.
1-30
100,000.00
8/25/70- Mfg. Hanover Trust Co,
1-30
78,000.00
Republican Campaign Committee
10/2/70- Bank No, 15-52
by 000.00
10/2/70- Bank Bo. 15-52
0 )
10/2/70- Bank 0 , 1 ; • 2
; )
laoublican Finance Commit too
10/2/73- Sank No. 15-4
6.000.00
'./■■I paid
1 90.000.00
. id to Committee 5
i'ho above figures were taken iron our records. Further
detail can be furnished if needed.
; / '
Accounting & Office Ha
1 3 / 2/75
317
Exhibit No. 27
memorandum for the president
The following actions have been taken In response to the week's
major news events* ,, ^
CAMBODIA
I. A major effort Is being made to schedule Administrative
spokesmen on radio end T. V. programs to tell our position
end counter criticism from the other side. Among the more
successful appearances have boea Vice President Agaev/ on
Face the N ati on^ this past Sunday and Bob Hope's guest spot
I >. on tho Monday night Tonight Show . . ;V •. y
2. All of the departments aad agencies have been asked to
l'. generate support for our position. Speech Inserts and
fact sheets have been distributed and the departments
' have furnished our office detailed echeduLes of when aad
it. where the iff spokesmen will speak out, ^
3, A continuing effort Is being made on the Hill, both to win
Senators and Congressmen over to our position and to get
them to speak out publicly in oppport * More than 50 speeches
Inserts have been distributed. , >■. ; \ e . •„ . ,^ 4 ..
4, Tho political structure of tho Party bas been personally
contacted and asked to generate support. This Includes
£» Governors, Gthte Chairman, members of the Republican
National Committee and leaders of the Youth, Women's
aod Heritage groups. Unfortunately, news of this operation
was released to the press by an official Republican Notional
Committee spokesman.
318
5, Numerous special Interest, -veterans and patriotic groups
were briefed and have generated considerable public support.
6. Many opinion lenders acrooe the country have been contacted
and asked to chow their support through letters to the editor
and calls to local radio talk shows. , - v - . . , ...
7* The 'Tell It To Hanoi” Committee has placed ads la more than
40 newspapers and mailed more than a million pieces of mall
asking for support. Other groups, such as Young Americans .
for Freedom, have also placed major cda.
8, A copy of the speech and detailed background Information on
Cambodia was mailed to editors, editorial writers, and radio
and T, V. news directors.
9. A major portion cf the Monday news letter# including a cover
picture, was devoted to supporting the Presidents action.
ID. Top-level public relation contacts acroi&s the country aro
working with us to generate support for our position.
II* Key columnists and editorial writers have been furnished
inform a tloa for favorable columns. . ... . ;ji
12. USIA has launched a major effort to communicate our position
In foreign countries.
ECONOMY
1, Chairman Paul McCracken's speech on April 28th to the 23rd
Annual Conference of the Financial Analysts Federation In
Dallas is being mailed to top financial editor a.
2. Arrangements have been made to provide speeches ou the
economy to the Senate Policy Committee on a confcfcsulng basis.
319
3
CAMPUS UNREST
I, Due to unrest oa campuses created by the student dehths
In Ohio, a meeting was called this morning with Herb
Klein, Jeb Magruder, and eleven members of the White
■ / House staff under tntrty. The purpose of the meeting
was to suggest on the part of those closest In ago to
students, what could bo done to cool the campus.
There were some concrete Ideas agreed upon at this
meeting. They will be forwarded as recommendt£loaa
C la a memorandum this afternoon.
Z f A representative of this office attended a meeting today
with Bud Krogh at the Deputy Mayor's office. The purpose
of the meeting was to discuss the Government's position
vlo-a-vls the New Mofce demonstrations planned this Saturday.
Negotiations were to begin late this morning with leaders
of the New Mob© in an attempt to get them to agree to rally
on the Washington monument grounds rather than Pennsylvania
? Avenue. A second meeting, at which time there will be a
report on the negotiations, io echeduied for 3;00 p. m. this
afternoon. .v
h>v.; .« :• h c .*;*■ i.? < f- ik Vu** \b.?:r - i
loTtf 'it rf i>f?«
Job M.grud.r i ^
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320
Exhibit No. 28
MEMORANDUM
o o
THE WHITE HOUSE
WASHINGTON
August 6, 1970
MEMORANDUM FOR : MR. MAGRUDER
The President was especially pleased with the Safeguard
ad in the Star tonight and wants to be sure you tell whoever
wrote it that it was extremely well done.
H. R.
I-TAFDEMAN
i
cc: Mr. Colson
321
O
Q 9 '^
August 11, 1970
IffiK0SAI©UM FOR MR. HALDEMAN
FROM : JBB MAGRUDER
Chuck Colson, with some help from Ollio A thins and others,
put the Safeguard ad together. 2 have passed on the President’s
uoisuiento to him. Ke all feel it v/as an excellent ad.
be n . Chuck Co 1 s on
35-687 O' - 74 - 23
322
Exhibit No. 29
J
/
/.<svosandum
J t
/ '
THE WHITE HOUSE
WASHINGTON
(
December I, ,1-970
MEMORANDUM FOR: MR. KLEIN
FROM:’ I,. HIGBY
In the next few months we will probably be doing a lot of
polls that we don’t want to paint as political polls, i. e.
they shouldn’t be referred to as being Republican
National Committee polls. In order to make them effective
we need other organizations that we can hang the polls on
that will have credibility.
Any thoughts you might have as to organizations that we
might use this for; for example, AEI, would be appreciated.
323
December 9, 1970
MEMORANDUM FOR LARRY HIGBY -
FROM* GORDON STRACHAH
Other independent groups which could be called upon for polls
include! .■ ..... .... r o :
1. Taft Institute for Government
2. United Student Alliance
3. Y.A.F.
4. Tell it to Hanoi
5. American Security Council
6. Committee for a Responsible Congress
7. Price Fighters League
8. A.E.I.
17 D. c. Committees formed to funnel money during the campaign
could be Jtept existent for poll use i
1.
2 .
3 .
4 .
3.
7 ,
9 .
10 .
11 .
12 .
:i.3i
14 .
15.
16 .
17 .
Committee for Better Government
Committee for Responsible Govoi.n.n-nt
Committee for Responsive Government
Good Government Committee
Citizens for Good Government
Reopens ible C i t ie;o n o Ccoosittoe
Roo d. e United for Good Governor ■ vt
Committee to I'rnce Politicos. Perries Pnspo'.isive
Co: littee to iio.be Government Responsible
Better Government Committee
cr d.o.te.e for Effective Govern!", out
' of toe for i/.f fcctivo Political P rtir.o
f f c c I; i v e C- o> vc r or . n t Go ; ■ .!! i t i: c a
Coirasittee for Uew Politics
How Politics committee
Committee for Responsible Politicians
C3. ti.io - ; •■■■, ''ey,? Responsible Politicians)
■:3S : jb
■ "'O' copies, Orb for files .alod 2 : 1 , , os p c : : : ;oo i .
Exhibit No. 30
memorandum
THE WHITE HOUSE
WAIHINOTOH
WNFIDENTIAL
June 17, 1970
CONFIDENTIAL/EYES ONJLY
MEMORANDUM FOR
FROM:
As we talked before we should get someone together to .run
ads attacking key Senate candidates on the opposition who
voted against us with regard to Byrd, '^here are about 10
key ones here and we should get either a citizen's committee
or "Tell it to Hanoi" to run these ads. At the top of the ad
should he the word/ "Incredible" printed in large letters,
indicating the Senator's name and saying tl^at "the time has
come for the American people to standup t^ rise up in
indignation. **
MR. MAGRUDER
L. HIGBy/_^
confidentim
CONFIDENTIAI
325
Exhibit No. 31
COMMITTEE FOR THE RE-ELECTION OF THE PRESIDENT
'nctov o c'iwm October 29, 1971
CONFIDENTIAL ’ 1
MEMORANDUM FOR TiiB ATTORNEY GENERAL
THROUGH: JEB S. MAGRUDER
S UB JECT : ' A Cit i zen s Campaign fo r 19 72
MISSION
The basic reason for having a national "citizens" campaign effort
on behalf of an ir.-cci.beni: Pi csicer.t seeking re-election is i ■> : r j-
v : .-e an. •mv.'.m.j for bread. st sensible participation by
• vn citizens in the cvmvp.-.ign . The growing dis.^nchnn treat with
t /Olitical parties, the larger independent vote, and the 18-21 year-
->lcl vote make it necessary for the President to co well outside the
bounds of his own party registration in order to be re-elected. A
properly constituted citizens effort can provide a vehicle to as-
sist in this effort. Based on discussions with former citizens
participants and other campaign personnel and party leaders, this
memorandum is designed to recommend the structure wo think can best
accomplish this in 1972.
ORGANIZATION
C-O be •• ..1. ■ . and that there will bo
' f 1 ; : ' 1 y ^.pointed Ni: ; :i .-m ate chairman who will be held
- '-rr bio for the conduct of the Presidential campaign in each
-.va'.e. The appointment of this person falls under the jurisdic-
tion of the campaign’s political division.
National Level
The recommendation at this level is based on the belief that a
n a ion a 1 c i t > zen s ope ra t ion can be r.o s t effective if it is set
326
CONFIDENTIAL
- 2 -
up as an Integral part of our committee. Although a "figurehead"
national citizens chairman would later be appointed {in January
or after the President announces his candidacy, or later) , and '
although the citizens effort would be publicly identified as in-
dependent, most of the national citizens work would be handled by
competent staff people (housed in the same headquarters with us)
who would function together as a division of this committee and
report to you through your deputies. In this way, the citizens
operation at the national level would function as a service orga-:
nization it would "service" the rest of the campaign organiza-
tion by filling the gaps and plugging the holes where necessary
and appropriate — it would perform those functions which it could
perform better than another division of the campaign organization
could. Examples of these functions will follow.
This memorandum initially recommends approval of ‘the concept of
the i ; /.s' . ion a 1 c i t i z e n s op a r « t i on as outlined abo vo ■ i d a h i >■ i :> g
of a competent staff member to serve as_ coordinator for this di--
vision of the campaign. Vie are now iiCthe process of identifying
candidates for this position.
/prove _ Disapprove • v '
State Level
The state level recommendation is that the citizens operation be
structured along similar lines -- the responsibility for deciding
how much and v.hat kind of citizens activity there should be in
each state would be a decision made with the counsel and consent of
the politically-appointed Nixon state chairmen. Those state chair-
men, now being appointed under your guidance, would be responsible
to Washington for the entire presidential campaign and would co-
ordinate the presidential campaign activities of l oth the c.-publican
state committees ar.d the state «j tizavs ops ration in tes .
The state citizens committees would be identified publicly, however,
as independent. A respected person with novr.e recognition would be
the logical choice to head the citizens, and in most states a younger
executive director wo.uld assist the chairman. The chairman should,
in most cases , be inactive in terms of running the campaign and not
attempt to take charge of it. He should, however, be highly visible
and "out in front." Ke might in special- instances have * assignments
of major significance {perhaps having charge of certain major cities'
or programs) but with the understanding that the Nixon state man Is
the coordinator and the conduit to Washington. The state citizens
327
CONFIDENTIAL
- 3 -
leader role will vary from state to state and must be understood and
accepted by each leader from the beginning. In smaller and non-
target states, the politically appointed Nixon chairman and the citi-
zens executive director might be the same person. The guidelines for
the state citizens organization described and recommended are suffi-
ciently flexible to meet the individual needs of diverse states but
still promote a clear understanding- that the political campaign chief
in each state is in charge.
It was originally thought by some of the people working on the task
force studying citizens that we would be in a position by this date
to make specific suggestions as to who should be selected in some
of the more important states to head up citizens activities. We now
believe such proposals would be premature. An effective citizens
activity must work in close harmony with the Nixon state chairman —
who is not yet appointed in most states. Also, because the citizens
effort is oriented toward the fall campaign and because it seeks to
provide a refuge for disenchanted Democrats and Independents 'who make
decisions to support the President, it would be unwise to put together
citizens leadership at this early date.
A s s : r .1 ; * :j :;-.c s t state ch a i rm.:* n are aopo i n t o d by J a n u a v : y 1 , v o p r: c p o s e
! • . :i L as soon as the political area makes the selection of a Nixon
state chairman, that chairman be asked to charge someone on his
staff to act in the capacity of a coordinator for citizens activities
in order to begin working with our national staff man on the group
activities described below. This man would eventually identify the
state citizens chairman who would be selected probably in the summer.
(In some states it may become necessary to. appoint an "organizing
chairman" much earlier.) Also, at a time shortly after the selection
of the state Nixon chairman, it should be decided by him and especial-
ly campaign management whether that particular state would be a "target
state" in terms of citizens activity.
In all states, here :• ' ':xe diverse "horizon’;*.! ’* v J .i\ ’ * es c • scribed
below, citizens act i vr. i ■ •'.11 generate names of :.*r.ovf.rs to be sup-
plied to the regular party’s state and local o- x >t*on. n some
states there r;.ay bo. developed "vertical" (i.o., state to-county-to-
precinct) citizens organizations to supplom *nt the party ranks but
these would be isolated cases to be dealt with as need may arise. . It
is recommended that we build a strong citizens organization only in
those states where it would really help.. There is no reason for citi-
zens organizations to exist if their only purpose would be to complete
an organizational chart on an office wall in Washington.
CONFIDENTIAL
328
Offy iDENTIAL
- 4 —
^ is recommended that the above method of structuring the state
C5 -*izens organizations be approved.
^itove ' Disapprove Comment
nu-iL'
FUNCTIONAL GROUP APPROACH
TJ\a ■ -
most important citizens activities will take the form of a
zontal operation of persons with special interests who can
^ 'ppealed to on the basis of those interests. Groups such as
doctbrs, and businessmen generally fall into the citi-
panoply because one's identity as a "lawyer," for example
id^^ Cen< ^ S ii nes and therefore an appeal to this particular
'^tity should not be made by the party, but by the citizens
°P'--'nti,on.
such ,T!5 lawyers, doctor.'!, Ijrrji near , on , d.c., are "minor"
£ ' !i- e groups in the sense that issues of major concern to them
'awyers or doctors may be of minor or no concern to the citi-
u <!/ * n 9 e neral. For example, lawyers should be reminded of the
J':. dent’s interest in judicial reform, his lawyer- like .life .
jj and working habits, and his programs for legal services,
'* abuse, penal reform, etc. Doctors are interested in his
-'irplan winning approval over Senator Kennedy's. Business-
^ *' .".ust be instructed by other businessmen on the merits of the
*' {.dent's economic and finance policies.
J|t a ls doctors to doctors, for example , have more credibility
„ lr ‘ J >' sa y / appeals by the PNC to doctors — hence, it is with the
j J *”yOr issues" that we believe the most effective modem canpaign-
-an be accomplished in the citizens area. Keyed to the legis-
^ ■ ve elements of the Nixon program, and the hundreds of topics
' • ’ dent has spoken out on during {he pant ihroe /oars, this
*v/p roach. ** * •~'f' o ‘ . v ' Vi - : \ leaders
•• Sn c. n *-■> : - ,V . •* .-.d
' r- of ^ v -rk ..heuM c V: ..v. :.V.o level in
'ngton and 5 "h f ->;u p U t icy Vr- by V.e *taf£ r.virber we
* ; *Sose to hire.
; ne state level, the structure should be similar. There would be
r * functional group effort in a state v.’ithout the specific approval
° ™ N i >:on state chairman and the state citizens chairman. In
* * >' words, before the Washington staff set up a "Florida Lav/ye rs
hi xon" operation, they would make certain that the two Florida
329
OPHFj hi , t .-
"Hi
-5-
no objection to such an operation and were consulted as
Florida lawyers chairman should be.
jpurth».‘j tw /{ . • - . '
thujy - 1 the functional group state chairmen would report first
ITrte i-U / , ‘ "*.te Nixon and citizens chairmen — and then to Washington.
^ staff in Washington would not be in a position to force
»;J., j notional group citizens activity on an unwilling Nixon
seise) , *han (unless .Washington campaign management decided other--
Z-n a.l.i j i ■
. ~i?sur»r." t, ■ to work among their own group (e.g., lawyers using "minor
recruit other lawyers) many functional groups have other
?ss. For example, our lav/ye rs plan calls for a nationwide
) tii by lawyers of the President's program in speeches before
I’li • ~ such as service clubs. Doctors' wives can bo organized
■ 1 • » work. ;-\nd Juudnessi.-rn oah take on the respond V 1 ity •
- - P r s i. d n t an d h i s p r ! i g 7 : a 1 it k 1 i o ' n k o h ’ : i. r O'. . n . . p 1 < j y a os..
Tri-;-: in tjil
- - • • ' V • , '•.£ horizontal groups established should never become arbi-
■rr.c-tlu, f ‘i.cxible. V'.e nv 1 : : r . rvi'f; be » : A i nod primarily by
I ' groups V.vu I !ovi ' • : 1 •« /.r getters or
n- -. , . he campaign should : : alt- ;; ' . ' ' i -vi •• • . •. 1 ••• '. /
S r ‘ ; :‘h I* . -s generated by current events, : ; • v . <1 by d-.-.o;
f *• rmation or the appearance of volunteer leaders. Whether
, practical can be measured in large part by the currency of
*vaU„| j fundamental- harmony with the President's program and the
and **.,•, j t of capable leaders. Based on these factors, during 1971
) 11 concentration on the following groups is recommended.
Ar-Pi'-dVr
Disapprove Comment
1. j'Uyi, . • :
Lend.*) I As you know, we have been working clou My •-.-Mi Don
r= .... . 'eke Do Loach in putting together a far :’y
• - he rod. -= of b ; r 0 s on in the '.TV' . ,:c~.
‘ ' '• A. - ..on
: '■/ n ■•-.t it • :* . \ scale
• •- * 1 '• tv.. ' . on - . -.ho I general
’ 0 the 1 .'•••go : nh: I • ; : 1 ; <■ - 0 <•..>.* *>.-• ;••• r - rather than th .
ooV . v . collection of "fat mat" iu.n.. ' n. .Secondly, it will
■ ns . 3l M'ii. : primarily to raise funds although it will be self-
p ha \ L | , , ■ - but r a t h o r w ill un e 0 r t a k e to recruit as man y p eopla as
unda^ j (i the President's candidacy. While Businessmen would fall
ot th,i i.| j - ti zens panoply, it would be more independent than many
f hor 5 z on t a 1 groups.
330
CONFIDENTIAL
- 6 -
The proposal is at Tab A. We understand from Deke that you have
approved it.
Approve Disapprove Comment
2 . Lawyers . Richard Kiefer (a Duke classmate of the President's) and
George Webster, both of whom were active in the 1968 lawyers campaign,
have put together an extensive proposal, attached at Tab B, for the
'72 lawyers operation. Their proposal has been reviewed by John Dean,
and by John Robson, a Republican lawyer from Chicago who served as
LBJ's Under Secretary of Transportation and who Don Rumsfeld would like
to see as one of the vice chairmen of the national lawyers operation.
It was then modified to some extent by us.
The basic purpose of lawyers would be, of course, to recruit as many
attorneys as possible to the • re-election effort, and to use these
recruits as grass roots "surrogate candidates" who would sell the
President’s candidacy by speaking to hundreds and thousands of local
clubs and groups, such as service clubs, throughout the nation.
Initially, the citizens staff man we propose to hire could begin to
set up the lawyers effort at a national — and to some extent at a
state — level. In the first few months of 1972, a person at the
staff level would begin to devote virtually full time to the lawyers
ope rat ion .
-ovo T)j.‘w,. L .p!rt...ve ‘ _ _ C. at _
3. Do ctors . As you are aware, through AMPAC Lee Nunn is putting
together a small steering committee of doctors who will form the
vanguard of the Doctors for Nixon operation. The purpose of this
group will be two-fold: (a) to assist in find raising; and (b) ;to
recruit other doctors, and through them, the citizenry in general,
to the re-election effort. This organization will be financially
self-sustaining.
Later on, through this group, doctors' wives will be organized for
specific projects relating to community and precinct work. ,
Doctors Malcolm Todd of California and Hoyt Ca: d:.or ••>£ K::.;tt.:cky • c
putting together the steering committee, along with Harry Hinton,
AMP AC's Washington representative. All throe ore personal friends
of Lee Nunn.
This group will handle its own ' organizational v.prk for us — no staff
v;ill be necessary here at the committee at least through raid '72
(,;C; •: F / DEN T I AL
331
CONFIDENTIAL
-7-
except for liaison work which will be done by Lee in the finance
area and our citizens staff man in the non-finance areas.
Approve _________ Disapprove ■ Comment
4. Association Executives ^ The American Society of Association
Executives, led by its Washington-based Executive Vice President,
James Low, is an association made up of the heads or executive
directors of every kind of society and association ranging from
the Accounting Research Association to Zeta Beta Tau Fraternity.
Bud Meredith, executive director of the American Apparel Manu-
facturers Association, and Jim Low have put together a ten-man
task force to discuss what association executives can do to as-
sist in the campaign. Their proposal is attached at Tab C for
your approval .
Because of their very unique situation, in that they all speak
for and represent major constituencies, associations executives
can be of tremendous assistance in the campaign. This group will
be particularly helpful to our Spokesmen Resources group as the
attachment shows .
Here again, this group can finance and run its own activities.
All that would be needed on the staff level here is part of our
citizens staff man's time to act as liaison with the group. /
Approve Disapprove Comment __
5. There are a number of other groups which will be so important
in 1972 that they have warranted separate and special task forces.
Ultimately, however, the formal structures which result in many of
these areas from task force recommendations will be incorporated to
some extent under the citizens umbrella, and nominally at least, the
chairman of many of them would report to the citizens chairman. (In
reality, of course, many will report directly to campaign management,
such as youth, women , etc.)
a. Youth, young adults, young voters. This function is. under
the direction of: hF: whz and you have reports and pro-
no sals from hi.vn . .Ken's activities ar9 b ! -‘ i f * 1 w *■ co '
or din ated with those of the RNC and the White Keu.:a in the
youth area.
b. Women’s activities. This area, of course, is Rita Hauser's,
and. her group is leaning toward no_t forming a "women's aux-
iliary" as traditionally has been done in the past. However,
CONFIDENTIAL
332
CONFIDENTIAL
- 8 -
any formal suburban or women's operation might ultimately
fall under citizens, at least publicly. Rita is in touch
with Anne Armstrong at the RNC who is her counterpart there.
c. Blacks. Len Garment's task force has made basic observat-
ions here and will be making formal operational recommenda-
tions shortly.
d. The elderly. A task force headed by Len Garment, George
Bell and RNC personnel is v/orking up a comprehensive
operational proposal in this area. A memo on approaches
to the elderly has already been submitted to you.
e. The farm vote and agri-business. You have seen John
Whitaker's report in this area.. '
f. Nationalities and ethnics. Chuck Colson's task force has
submitted a report on this area.
In the past, perhaps because of those who headed this activity,
nationalities and ethnics were somehow equated with captive
nations. Rather than seeking v-;ys to e,r;luve the vote of the
blue-collar Italian-Amorican, for example, nationalities would
i sponsor endless series of "free the captive nations" dinners.
Laszlo Pasztor, v/ho was active in this area in 1.968, has kept
up his contacts as the nationalities man at the y-SC. It is
our present thought that he and his captive ,u\» ions y;ork
should be left at the RNC through the campaign, and that a nori-
Balkan be brought on board here to focus on other immigrant
groups in states where their votes are important (e.g., the New
York Italian-American vote that played a major role in electing
Jim Buckley} . .
It has also been indicated that Tom Pappas will be assisting in
- this area.
OTHE R cc : :si_j )S RAT TON 8
1 . 1 . 1 w j :. ■ i i. : ■ l ;■ .1 y iho ugh t that a c \ ■ a -:j •
would study the areas of direct mail, v ■ ; o. <
ics, research, polling, and computers, and
memorandum as to what should be clone in th
panoply.
i'.'.ku .eat ions in this
:. :s o. areas under the citizens
CONFIDENTIAL
333
CONFIDENTIAL
-9-
After a brief initial survey, it was decided that any further work
in this area would duplicate that already underway in Bob Marik's
studies on these subjects. Since this is to be an integrated cam-
paign, it is our opinion that the citizens division can take direc-
tion from the "technical division" as to what it should do in terms
of mailings, use of White House mail, etc. Furthermore, by placing
the decision-making for mass mailings, polling, etc., in the hands
of campaign management and its "technical" division, those who have
the "big picture" will be able to decide when it would be helpful
to have citizens, rather than another division or person, make a
mailing or do a poll.
Here again is an example of the way in which we hope citizens will
service the campaign — < it will be there to perform the functions
which campaign management decides it can do best. .
One other important function citizens can perform in this area is
to receive and transmit to the "technical" people and campaign
management the information it picks up from its various constit-
uencies.
A; '■ . Dis app rove Co ; >. \ :io n t
2. Advertising. Here, our "in-house" advertising, unit can service
citizens ..nd program its sub-units to place the most effective ads
possible. ::o do not at this t:: s a need for an advertising
function in the i <..;/• • -• : - . u , v.'.o- -.h a 1 5 v son ran to cur
in-house agency might he -..v if. d ' A nr . n.
Approve Disapprove ^ Comment
3. Public relations and media liaison. For the present time, who-
ever serves the public relations and press needs of this committee
can also assist the citizens. Later, however, citizens should have
its own press officer, and, still later, its own "information office
This will be necessary to keep citizens credible in the public mind
as independent. The Klein communications memorandum deals with this
in greater detail.
4. Administration. Since citizens .will function as a division of
the campaign, the administrative chores, payroll, personnel, book-
keeping, etc. , can be handled as wpuld any other segment of the cam-
paign. No administrative staff would 'be hired for citizens activity
exclusively.
Approve ■ _____ Disapprove Comment, j
CONFIDENTIAL
334
CONFIDENTIAL
- 10 -
5. Mobilization of previous citizens committees. During the last
two years, people at the White: House have established a number of
groups, drawn vaguely on bipartisan lines, to support the Adminis-
tration. Some, like the Tell-It-To -Hanoi Committee, were formed '
for the primary purpose of taking out newspaper ads on specific *
issues such as key votes in the Senate on our Vietnam policy. A
group such as this can be mobilized easily because almost all of
its members are dedicated supporters of the President. Other groups,
such as Americans for Winning the Peace and certain lawyers committees
established in various cities throughout the country, ..are also quite
responsive to a direct call from the White House, but, because an
attempt was made in establishing these groups to give them a more
broad spectrum of support, these groups cannot be mobilized instan-
taneously. Progressing further, the National Citizens Committee for'
Revenue Sharing is genuinely bipartisan and supports the President
on this program, although many of its members have been critics of
the Administration on other points, such as Vietnam. An active
mailing operation, including letters from the President on specific
issues, thanking group members for their support, has been initiated
and should be scheduled for increased activity as we get into the
campaign. Although the committees below probably could not be used
intact in a practical fashion, the people who participated are a
significant potential source for support and leadership in the cit-
izens area of the caiqpaign. Some of the groups which can be utilized
in this process are:
Americans for a Responsible Foreign Policy
Americans for Winning the Peace
Citizens for Government Reorganization
Citizens for the New Prosperity^ "
Citizens Committee for Peace with Security
Citizens Committee for Postal Reform
Citizens for the SST
Honor America. Day Committee
• National Citizens Committee for Revenue Sharing
Tell-It-To-Hanoi Committee
Representatives of our task force have met with officials of each of
these organizations during the summer and their recommendations as to
how our national citizens operation ought to function have been taken
into consideration in developing this memorandum. We shall attempt,
where possible, to mobilize that which presently exists as a result
of these activities on behalf of the national citizens effort. Our
study has given us a number of suggestions in this connection.
6. Name. We do not need a name for the citizens organization until
we are ready to announce it, which is some months away. But at the
CONFIDENTIAL
335
CONFIDENTIAL
- 11 -
present time we lean toward "Volunteers for the Re-Election of
President Nixon." Depending on the results of the August GOP
convention, the name would be adjusted in September of 1972 to
make reference to the Vice Presidential candidate.
VJe feel the term "citizens" is overworked and also conjures up
visions of the 1968 Willard Hotel operation in the minds of many.
"Volunteers," on the other hand, has not been used as much in the
last few presidential campaigns and ties in with the President's
volunteerism programs.
There will need to be discussions at a later point as to how that
which this memorandum proposes will fit in v/ith Rita Hauser's
operation, since she envisions the traditional "women's division
being abolished in favor of a new volunteer operation, v/hich would
be made up mostly of women, but not exclusively.
What she proposes would fit in 'with the "vertical" citizens orga-
nizations on a state-by-state basis, while the "horizontal" or
functional group operation could be headed by our citizens staff
man .
7. Budget. It is far too early to project a budget at this
time, although $2,000,000 was selected as a ballpark figure
when the first cut of a very rough budget for the entire cam-
■■::d gn was initially submitted. One of the f-O.rt job:; of our
-.Mi /,:jps staff man would be to ; ; ut together a -<-l budget
citizens activities.
THOMAS W. EVANS
ROBERT C. ODLE, JR.
Attfi chT.ontS
bcc : Mr. Thomas W. Evans
b cc; Mr. H. R. Haldeirian
MAGRUDER CHRON.
MAGRUDER SUBJECT
^•1&GRUDER WORK , ' '
COMF1 DENTIAL
336-350
Exhibit No. 32
September 6, 1972
MEMORANDUM' FOR:
FROM:
, SUBJECT:
:
CHARLES W. COLSON
CFAP.K MacGEEGO.^/zj
Yoor Request for the For--. ?. tlc:i
of a New L^bor Committee
Bill Rhatican of your office called Glenn Sedam early in August and
asked that a dummy coranittee be established as a vehicle through
which a nailing to labor could be funded.
Bill was advised at that time that as a matter of policy new CQB&
mittees would not be formed and that activities should be under- \
taken under '-.Jtlig- umbrella of this Committee, budgeted by this Cotnni ttee,
and paid for- by the Finance Commit tee. :%Bill later called back' saying
that you insisted that anew committee be organized.
Glenn prepared, draft documents that could be filed were a new^oxnaittee
to be registered and forwarded the drafts to DeLucy. - tit his forwarding
memo he briefly outlined the responsibilities of a chairman and a’
treasurer -.-'tiaBJeir' the new law. ? ;
- ; ^ v
Glenn, following the policy set out by nm, and by Maury' St a m t . eaptintxed
to advise all concerned th^t a new coranittee not be registered. 'Further
he co n t that If a new coiamittee were int^dfig'it6'-^oiicIt
■or tec«iwi£i^^ make' expenditures' on b ehal f id e n t
that committee must be authorised by Maury Stans to do 66.’ Maury is the
person delegated authority by the President to authorize committees to
operate on tbit Pr esid etj t * s behalf . '
;
’
opiy
A similar issue arose In August regarding a concerned Vietnam Veterans
for Nixon Committee. Glerm responded in the same nianher. k T e later learned,
however, that the concerned Vietnam Veterans Committee has undertaken a
nailing, and has not registered. This puts them in yiolation of the law,
and presents a potentially ^barrassing . legal . violation for us.
Therefore, I ask that all .reqUes 1 8 for n ev c omm i 1 1 ee s be directed to
me. If -1 beliefs there is reason to deviate from our policy pi ’’no more t V
committee?*’ 1 will -discuss it with Maury Stans, and IE Maury agrees, ve
will have the jCfltaml ttee 1 properly organised and budgeted ■.
351
iiyaae* "X2, 1971
Exhibit No. 34
plb^
; A FEW. DAYS after tho
! visit here of Indian Prime
Minister Indira Gandhi Nov. j
3-5, private assurances were
, sent to New Delhi that the
United States would start
; pressing Pakistan to give au-
tonomy to East Pakistan as
soon as the Pakistani govern-
ment reverted to civilian rule
. late in December.
That assurance, 6Cnt to
Mrs. Gandhi in hope that she
would not invade Pakistan,
• was never even acknowl-
edged by the Indian govern-
ment. To President Nixon,
the she nee from New Delhi
was one more piece of intelli-
gence that India did not want
, to resolve the tragedy of East
Pakistan by political-diplo-
matic means but was dead set
on military action. •
i'iacud on the defensive by
the press and by Democratic
i attacks on his handling of tho
now fnlt-blown India-Pakl*
. stan war, President Nixon
may some day fully expose
nine months of major— but
secret— U.S. diplomatic effort
to convince Pakistan to give,
autonomy to East Pakistan
and to restrain India. Until
lie docs, the intensity of the
Rowland Evans and Robert Novak ' .-•> |v
* ” * T * J >. ‘ ■ v*£i
fix©B and Mrs. GioidM W-fA
U.S. effort is leaking out in
dribs and drabs, the’ most sig-
nificant of which was tho
Al uslcie’s “Gold”
I SEN. EDMUND S. Muskie’s
[campaign strategists, eyeing
. t v-.::.. !
gold, based squarely on tho
results of Miss Navarro’s poll
in California. ". . . Reading
. President's pledge to India to S ant j.p roper ^ Ux MllU ment over the open-ended respon-
P '?*!"" fi» C »>ifornl il «e ton, iderin* “ 5 & votcrs * >oU,!d) '.' •'
on Pakistan s new civilian ment-financed Scnata makes .t apparent that prop.
government due to take over! ‘ ’ ■ .. erty taxes are all important
later this month. f ,Z‘ Z ZJXJSSS. in this crucial state - say. the
The point of delaying full] ° b ° ost U “ Mu * W# ‘ memo. . . Capturing tiro
TT - 1, , . . 8 for-President campaign, , . . v-yvimn,,
U.S. pressure on Pakistani SDecifi(ially . thev arc dis . issue is worth a goid-mino to
was obvious: The present mil-] ’ . any candidate."
itary government was too * *'? Miss Navarro and Lewis
independence for East Paki
publicly committed agains^ f ^"vern^ental Re-
- - - • ■ lations Subcommittee, headed v *
Miss Navarro and Lewis
v™™” ™ by Muskie. conducting hear- touting* be staged as a TV
to reverse its position. 9 mgs on property taxes during spectacular, mastcr-i
smn io reverse its position. 5 mgs on property taxes during spectacular, masicr-muwiea
In short, Mr. Nixon’s sccrell a scheduled Muskie campaign Robert Squicr, Muskic’s
diplomatic effort. were- visit to California Dec. 20 and '^^‘‘.grocs' itattt
keyed to a timclabio that- • .. . . . . would he a brilliant visual
compelled him to go slow?, *?• * , event, particularly if wo cau
while India's obvious purposel ? ra . 0 ; fic0 mcmoraSduln by ' Ux '^'“elderly
■ was to force the isaue by a] Anna Navarro, who runs pub- R SF.o'Siei-i’iind °.ehnol elilh
military invasion of Pakistan] he opinion analysis for the d? en in pom neighborhoods."
J£K co“e UmeUOl ° f Lew^ a MuS n sona"u ££• „ Nor do the Mu.kio staffers
That explains the low cs- * c{ - After Muskie formally t ,link in ^ ,cl f parochial
tnS'*U tS Tnd!a W ha‘ onuouheea. lu, candidacy on - ' ^
i.iie to «wcn inuia nav subcommittee turing tho property tax issue
fallen inside the Nixon ad-J " an \ me »uo committee .. . » rca * in places
ministration To-i official^ hearings would be embarrass- w ® UiU . y, ,B . , s •
nuiusuauon. sop oiacia«t ii r.. SI .„ c , Onlv un until other than California,’ the \
arc convinced that while] dal e P sa y« the Navarro- memo advises George Mitch-
Ota'u^ liewis memof C?n U« prt «U Wu.klo*. ‘op political op.
most certainly would have] posed hearings "take odvan. h£vo' closed ‘In
succeeded,, military action «».«£. TV Ume before it . [^"fAt^t^^rs^bocaus,
had long since been occideoj 1S iaic - citizens refused to tax them-
on by India to thwart rj Tho purely political motive wivcs an j Woro ."
diplomatic solution. 3 of the hearings shines like * *abiw>m-Ha»6ruuicm
35-687 0 - 74 - 24
352
Exhibit No. 35
Kovi or 17, 1071
MEMORANDUM FOR:
FROM:
SUBJECT:
MR. JEB S. MAGRUDER
HERBERT L. PORTER
Our Mutual Friend
Things went well in Los /ingeles with our friend. I would
like the "green light" to proceed with the second part of
the plan. This will involve finding hin a "suitable" home.
He is ready, willing, and most able.
Any ideas?
HLP Subject
HLP Chron.
353
Exhibit No. 36
Commlftcs for the Ro-eSeciion of fho President
ORAN DU M
®bt- $3
September. 8, -1972 ' YV " W ° t—
MEMORANDUM FOR: * MR. NICK BUNGATO
FROM: ROBERT C. ODLE, JR.
Once or twice a day you will get a call from Mr.
Chotiner’s office in the Reeves & Harrison law
firm on, the fifth floor of 1701, asking you to
deliver envelopes directly to Mr. Haldeman’s office
on the first floor of the West Wing at the White
House.
Please give these requests top priority since the
envelopes are very important and time will always
be a factor.
Thanks, Nick.
cc: Mr. Ah drew Lawrence
bcc: Mr^,Jeb S. Magruder
iJft, Murray M. Chotiner
sJ 70o
354
Dailey
— Porter —
Sedam —
Marik
— Shumway
Miller
— Sloan — • —
Teeter
COMMITTEE FOR THE RE-ELECTION OF THE PRESIDENT
September 23, 1972
MEMORANDUM
CONFIDENTIAL/EYES ONLY
Jeb S. Magruder
E. D. Failof
McGovern-Shriver Confrontations
On Friday, September 15, 1972, you assigned me responsibility for
the above project. Attached is Ken Rietz's report re the above
subject matter for the, past week.
In addition to the items in the attached, I have personally
endeavored to create an encounter between Shriver and a bussing
opponent on the bussing issue for today in Las Vegas. Anti-
bussing people will be used in this encounter and no Republicans
will be surfaced.
Excellent television, radio and print coverage of some of these
events has resulted during the past week. Definite pluses for
our campaign have resulted from the media coverage. It should
be pointed out that other Republican types, undoubtedly, will be
copying this week's activities on their own in their localities.
We have no control over the activities we. do not program.
•
We have learned the McGovern organization and/or the Secret
Service has reacted to our activities. The San Gennero Festival
in Greenwich Village, New York, Saturday night was originally
planned as a walking tour of a few blocks by McGovern. However,
as a result of the events in Flushing, New York, on Thursday,
September 21st, the street walk was cancelled and McGovern spoke in
an area that was barricaded off.
I have, and will* maintain continuing supervision over this pro-
ject. Ken Smith is the key guy from YVP and I will contact other
resources.
If you have any questions or suggestions on the above project,
please advise.
FOR:
FROM:
SUBJECT:
356
September 22, 1972
MEMORANDUM FOR:
THROUGH :
FROM:
JEB S. MAGRUDER
ED FAILOR'C^^
KEN RIETZ
357
o
From September 15-22, preparation for our activities in
providing sign carriers and leafleteers was made in Milwaukee,
Chicago, Bergen County, New Jersey, Columbus, Ohio, Detroit,
Lansing and Flushing,, New York. Chicago and Lansing
were dropped. because of the closed nature of the candidate’s
schedule. Busing quotes were distributed in Detroit outside
a closed labor meeting. That was the only activity there
due to the lack of public appearances. We began work on
literature (hand-lettered) on Wednesday after conferring with
Ken Kachigan. The following is a. city by city report:
September 19 - Milwaukee : A dozen young people carrying signs
questioning, the candidate’s stands and criticizing his remarks
about young people (which end is up?) were at the noon downtown
rally. While no press coverage was generated, we do know
we upset the candidate. With cameras zooming in he asked one
of our girls wearing a YVP button "You don’t really support
Nixon do you?" Her reply was classic: "Yessir. I've had
.my head examined and I'm for Nixon now more than ever!"
Photos of the event are attached.
September 20 - Columbus : The reception for the candidate
at the factory (Nixon buttons, hats and the debaters) came
about much the same way as in Bergen County, i.e., our people
were alerted to check into the schedule and they assisted the
senior committee distributing the Nixon material. However,,
as we know from the evening news and morning page 1 newspaper
coverage, it did the job.
September 20-21 - Detroit : As noted' previously, mimoegraphed
handouts attacking the candidate’s busing stand were distributed
to labor members entering closed meetings.
September 21 - New York(Flushing subway Situation) : Again,
we had to scramble for time, but 20 young people turned
out with Nixon signs and buttons - some with "Nixon" in Hebrew.
The film coverage of this was excellent on the CBS morning
news — no matter where the camera turned, the signs were there
along with audible chants of "Nixon Now!" and "Four more years!
throughout the report. Reporter Bruce Morton concluded that
it was not a very good stop. We are told an AP wire story
reported the presence of young Nixon supporters.
We have activities planned in Seattle on Monday, Los Angeles
on Tuesday, San Diego on Wednesday, and Toledo on Friday of
next week. Specific events will, of course, depend on the
candidate’s schedule.
Exhibit No. 38
RENE C. OAVIDSON
^ ff*« k V*'< rif* C
REGISTRAR OF VOTERS
ALAMEDA COUNTY • CALIFORNIA
December 16, 1971
Mr, Robert J. Walters
48U E. Gage <#A)
Bell, California 90201
Dear Mr. Walters:
This is to acknowledge receipt of your letter dated
December 1U» 1971*
/ . -.-.Please be advised that the provisions of Election Code
/ section 22S are permissive. This office has not exercised
4 the previsions of that section. It is our considered opinion
| that if strictly applied it would cause an undue hardship on
\ the electorate, i. a. disenfranchisement. Consequently our
\ office would not purge American Independent Party voters on*
our rolls on the basis of returned letters returned to^your
^"'Organisation.
Very truly yours.
REMS C. DAVIDSON
Registrar of Voters.
IZ25 FALCON STREET * OAKLAND, CALIFORNIA * t*IS) 444-50S5
359
/A AMERICAN ADVERTISING & SALES CO • . ^
... '.‘I 8 00 2 SAN LEON CIRCLE » .
* . BUZNA PARK, CALIFORNIA 9, 962/>< " 4 “ ' '
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360
Exhibit No. 39
June 28, 1972
ADMINISTRATIVELY CONFIDENTIAL / EYES ONLY
MEMORANDUM FOR ED FAILOR
An idea that has come from very high sources is
that a booklet or small brochure be prepared
(with no identification as to who prepared it)
on the "McGovern Platform". All the issues
should be listed such as labor, national defense,
amnesty, pot, poverty, abortion, etc. Under each
issue should be the worst possible quote, state-
ment, or reported position by McGovern regarding
the issue.
Some of his bland or noncontroversial issues
should also be included, but all of the bad
stuff should be included. After the booklet
is completed, a large distribution should be
made to opinion leaders.
W. Richard Howard
CHAPTER 3
Use of the Incumbency— Responsiveness Program
I. INTRODUCTION AND OVERVIEW
A significant aspect of the Select Committee’s investigation was its
inquiry into the administration’s programs to use the powers of incum-
bency to reelect the President. Documents obtained by the committee
indicate that this effort — which had as its main vehicle a White House-
devised plan known as the Responsiveness Program — was an organized
endeavor “to politicize” the executive branch to insure that the ad-
ministration remained in power.
The scope of this effort was broad and its potential impact consider-
able. It included, for example, plans to redirect Federal moneys to
specific administration supporters and to target groups and geo-
graphic areas to benefit the campaign. It entailed instructions to shape
legal and regulatory action to enhance campaign goals. It comprised
& to utilize Government employment procedures for election
.
Not only were such plans laid, they were, in part, consummated, al-
though departmental and agency resistance to campaign pressures
limited the success of these endeavors. Particularly in regard to the
expenditure of Federal moneys concerning certain minority and con-
stituent groups were there flagrant abuses of proper governmental
procedures. Some of these abuses appear to stem from the improper
involvement of campaign officials in governmental decisionmaking.
Several Federal civil and criminal laws appear applicable to the con-
duct described in this chapter. In fact, a question exists whether the
planning and implementation of the responsiveness plan rises to the
level of a conspiracy to interfere with the lawful functioning of Gov-
ernment, conduct prosecutable under 18 U.S.C. 871 as a conspiracy to
defraud the United States, as that term has been interpreted by the
Supreme Court. 1
The evidence presented below is not exhaustive. While the staff has
interviewed over 150 witnesses and reviewed thousands of documents
respecting these matters, it has not been able, because of time and staff-
ing limitations, comprehensively to cover all possible areas of investi-
gation. This is particularly the case since the Responsiveness Program
was intended to pervade the entire executive branch — including re-
gional offices.
The Select Committee believes, however, that the account presented
below is a fair and accurate statement of the parameters of the Respon-
siveness Program, certain actions taken under its aegis, and other
1 See section VIII below.
(361)
362
related conduct. It makes this assertion with confidence because much
of the evidence obtained respecting these matters is documentary. The
account below consists largely of excerpts from the plethora of docu-
ments uncovered by staff investigators. The principal documents are
appended to this report as are certain relevant executive session
transcripts.
The committee’s report on these activities concludes with certain
legislative recommendations designed to restrain future misuse of
Federal resources for political purposes.
II. EARLY MANIFESTATIONS OF ADMINISTRATION’S
INTEREST IN USING THE INCUMBENCY TO AFFECT
THE REELECTION EFFORT
Throughout 1971, members of the administration and the campaign
team (which began to form in May, 1971) displayed a studied interest
in using the resources of the Federal Government to enhance the
President’s reelection chances. John Dean, testifying in executive
session before the committee on June 16, 1973 (p. 38), expressed the
concern relayed to him by H. R. Haldeman as to the activities of the
White House staff :
It was probably in summer of 1971, to the best of my
recollection, that Mr. Haldeman began discussion with me
what my office should and could be doing during the cam-
paign. He told me that all the officers in the White House were
having discussions and were being told the President’s wish
was to take maximum advantage of the incumbency; and the
White House would reshift itself from the current duties to
focus very much on the reelection of the President.
The statements of Messrs. Haldeman and Ehrlichman during
committee interviews on January 31, 1974, and February 8, 1974,
respectively, also indicate that the President was interested in using
the resources of the Federal Government to best advantage in the
reelection campaign. 1 * The testimony of Patrick Buchanan, discussed
in chapter 2 of this report, provides another account of the adminis-
tration’s early interest in utilizing the incumbency for campaign
purposes. 2
This interest is revealed not only by testimony of witnesses before
the committee, but also in numerous documents prepared in 1971. A
sampling of such documents follows :
1. On January 12, 1971, Jeb Magruder, then a White House staffer,
submitted a “Confidential/Eyes Only” memorandum to Attorney Gen-
eral Mitchell regarding political activities in the White House in
1970. 3 The memorandum concluded with the following paragraph
under the heading “Resource Development” :
Our Administration has not made effective political use of
the resources of the F ederal Government, the RNC, the White
House, and outside groups and corporations. In developing
18 Hearings 8176, 8189-91.
2 See, e.g., 10 Hearings 3940—41.
2 Exhibit No. 1, 19 Hearings 8595.
363
the structure for the campaign, proper use of these resources
should be of primary concern at the outset of the planning.
2. Magruder, apparently at the Attorney General’s request, began
an examination of the utilization of Federal resources by others in
Presidential campaigns. On April 14, 1971, he wrote a “Confidential”
memorandum to Dean, 4 which began :
It has been requested that we determine what use Presidents
Eisenhower and Johnson and Vice President Humphrey
made of resources available in the Federal Government for
campaign purposes.
Dean’s assistance in this project was requested.
Less than a month later, on May 6, Magruder reported his interim
findings to Mitchell in a “Confidential” memorandum entitled
“Utilization of Government Resources by General Eisenhower, Presi-
dent J ohnson, and Vice President Humphrey.” 5 His conclusion as to
President Eisenhower’s campaign was :
During the actual campaign no use was made of the White
House or the Federal Government to specifically work on the
campaign other than the normal support activities given Gen-
eral Eisenhower through his position as President.
Magruder, however, concluded that employment of Federal re-
sources by President Johnson and Vice President Humphrey was more
extensive.
Under Johnson it has been indicated that he made consider-
able use of the White House staff and individuals in the de-
partments to work on the campaign. At the present time,
I have not been able to get any specific information but, hope-
fully, will have more concise information in the near future.
Before the convention, Humphrey used many people on his
Vice Presidential staff, as well as individuals who were em-
ployed by the Cabinet Committees he was in charge of, to
work specifically on the campaign. Many individuals re-
mained on the government payroll after the convention and
continued to work exclusively on the campaign. As an ex-
ample, the individual who headed up his veterans activity
was employed by the Veterans’ Administration and remained
with the VA throughout the campaign. Some use was also
made of the research facilities at the Census Bureau.
Because this committee’s mandate is limited to an examination of the
1972 campaign, no effort has been made to substantiate or refute
Magruder’s allegations.
Magruder ended his memorandum to Mitchell on a cautionary note :
One reason why both Johnson and Humphrey had an easier
time than we would have in this situation is that the control
of Congress was under the Democrats and my information is
that it was difficult for the Republicans to make much of this
issue on the Hill. On the other hand, if we used these resources
in the same way Johnson and Humphrey did, with the control
4 Exhibit No. 2, 19 Hearings 8597.
5 Exhibit No. 3, 19 Hearings S59S.
364
of the Congress in the hands of the Democrats, they could
make this an issue.
From a public relations standpoint, it would seem best to
restrict the use of government employees to :
1. direct assistance for the President, and
2. to help develop strategy.
They should not get involved in the day-to-day campaign
functions.
3. Magruder, however, on May 17, 1971, sent Gordon Strachan, a
White House staffer working for Haldeman, a “Confidential” memo-
randum on “political” use of the “White House computer.” 6 And, on
June 14, 1971, he forwarded to William Horton 7 a June 3, 1971, “Con-
fidential/Eyes Only” memorandum to Magruder from William Tim-
mons of the White House staff 8 which read :
As you know, Preston Martin is head of the Federal Home
Loan Bank Board. He is a Califomia-Nixon Republican and
is a little put out that nobody has sought his political advice.
Apparently, he has given a great deal of thought to, and
designed, a sound economical plan to use federal resources
(projects, contracts, etc.) for advantage in 1972. He has
graphs, maps, flow charts, etc., to show how available money
can be directed into the areas where it would do the most
good. Very scientific, I’m told.
While I have not talked to Preston, I think it would be
valuable for you to chat with him about his plan.
The memorandum to Horton, which was also designated “Confiden-
tial/Eyes Only,” suggested that Horton see Martin and “plug this
into your project.” The nature of Mr. Horton’s “project” is discussed
in detail below (item 6, this section). Mr. Martin has stated to the
committee that he never devised a plan to use Federal resources for
political advantage, and the committee has not uncovered additional
evidence that establishes the contrary.
4. The concern respecting use of Federal resources to affect the elec-
tion is reflected in communications among other White House and
campaign Staffers. Two “Confidential/Eyes Only” memorandums from
Peter Millspaugh, a White House political aide to Harry Dent, to
Harry Flemming of the campaign staff dated May 12 and June 23,
1971, are instructive. 9 The memorandums indicate that certain White
House and departmental personnel were meeting to consider the use of
Government “resources” — particularly Government “patronage” — in
the campaign. The May 12 memorandum states :
... A consensus emerged that the range of federal re-
sources must be inventoried and analyzed with perhaps the
federal grants area broken out for priority treatment because
of the immediate benefits and some budget cycle timing con-
siderations. Additionally, the matter of a delivery system
which would put these resources at our disposal on a timely
basis was considered to be imperative.
6 Exhibit No. 4, 19 Hearings 8600.
7 Horton worked for Frederick V. Malek at the White House. Malek, a former Special
Assistant to the President, was responsible for the creation of the Responsiveness Program,
as subsequently discussed.
8 Exhibit No. 5, 19 Hearings 8605.
0 Exhibits Nos. 6 and 7, 19 Hearings 8606-7.
365
Attached to the June 23, 1971, memorandum is a document listing
the “Basic Types of Patronage” that could be employed for campaign
purposes. This document is quoted in full text :
THE BASIC TYPES OF PATRONAGE
1. Jobs (full-time, part-time, retainers, consultantships,
etc.)
2. Revenue
— Contracts (Federal Government as purchaser — GSA)
- — Grants (do-good programs — EDA, Model Cities, NSF
research, etc.)
— Subsidies (needy industries — airlines, etc.)
— Bank Deposits (all Federal accounts)
—Social Need Programs (direct benefit to citizen, i.e., So-
cial Security, welfare, etc.)
— Public Works Projects
3. Execution of Federal Law (resides mainly in Depart-
ment of Justice whose interpretive power touches every vested
interest) .
4. Information and Public Relations Capacity (a profes-
sional ( ? ) public relations office in each department and
agency constitutes an enormous public information appara-
tus).
5. Travel (domestic transportation can be provided by law,
foreign travel, international conferences, etc. are available) .
5. On October 26, 1971, Harry Dent of the White House staff sent a
“Confidential” memorandum to Mitchell and Haldeman reporting on
a recent meeting with a group of southern blacks. 10 In a paragraph
that presaged later administration activity, Dent wrote :
3. Grant recipients are by and large Democrat-oriented
groups, said the conferees. I have already been in touch with
Phil Sanchez and some Southern black leaders about chan-
neling money to groups whose loyalties lie elsewhere. I have
also delayed the promotion of the Southeastern OEO man
to the # 3 spot in OEO until he demonstrates proof -positive
that he is rechanneling money from Democrats to RN blacks. 11
6. A significant document that reflects administration interest in
1971 in employing Federal resources is a June 23, 1971, “Confidential”
“Discussion Draft” entitled “Communicating Presidential Involve-
ment in Federal Government Programs,” 12 prepared by William Hor-
ton of Frederick Malek’s staff. This document is also important be-
cause it appears a forerunner of the Responsiveness Program concept
discussed in the next section of this chapter. Horton prepared this
paper under the supervision of Malek who had received a request from
Haldeman to consider how the grant-making process could be used to
the President’s advantage. 13
The memorandum’s initial paragraph recommends that :
10 Exhibit No. 8, 19 Hearings 8613.
11 Mr. Dent’s comments on this document are found at exhibit 8, 19 Hearings 8615.
12 Malek exhibit No. 8, 18 Hearings 8348.
13 18 Hearings 8209.
366
. . . [T]he President’s direct control over awarding selected
grants should be strengthened to ensure that political circum-
stances can be considered, if appropriate, in making awards.
It then states :
To ensure politically sensitive grant applications receive
appropriate consideration, two basic steps must be carried
out: (1) determine which grants are politically sensitive and
(2) ensure these grants receive positive consideration from
OMB and the Departments.
Under the heading “Determination of Politically Sensitive Grants,”
Horton wrote :
This step should be accomplished in a manner which mini-
mizes the risk of unfavorable publicity and falsely raised
expectations. Therefore the possibilities of surveying all pend-
ing grant applications or soliciting the opinion of Congres-
sional and local Nixon supporters were rejected.
. . . Identification should rely on routine contacts with
various White House and campaign officials. For example,
supportive Senators and Congressmen usually inf orm the
Congressional Kelations staff of pending grants which are
politically important to them. State and local representatives
contact various White House officials in a similar manner.
All these inputs should be passed along to Gifford 14 for con-
sideration by the grant coordination group. Based on past
experience, the most politically important grant applications
are usually brought to the attention of White House or cam-
paign officials. However, especially important localities where
no appropriate grants seem to be in process will be checked
in the grant initiation process covered below.
This identification process will generate more grants than
could be or should be given special consideration. Conse-
quently, priorities must be set.
The memorandum then sets forth a procedure to insure that “the
most recent political information and campaign priorities are con-
sidered in selecting ‘must’ grants.” Under the heading “Initiating
Grants,” Horton stated :
In addition to designating “must” grants from pending
applications there may be occasions in which political circum-
stances require a grant be generated for a locality. Once such
a locality is identified by the campaign organization, the
coordinating group would decide what kind of grant would
best meet the needs and available program resources. A cam-
paign representative would then inform the appropriate local
official what to submit. When submitted, it, of course, would
be designated a “must.”
Gifford must rely on the Departments to follow through on
“must” grants under their jurisdiction. To accomplish this,
a network of Departmental coordinators should be estab-
lished. These individuals must have two prime qualities : . . .
loyalty to the President and sufficient authority to insure
“The Mr. Gifford referred to Is William Gifford, then of the Office of Management and
tsudget, who served as a clearinghouse for requests and Information on Federal grants.
367
“must” grants are approved and Departmental announce-
ments of all grants conform to the guidelines discussed
subsequently.
The memorandum continues :
. . . Gifford must be flexible on pushing a “must” grant in
case it turns out to be substantively irresponsible or an obvious
waste of government funds relative to other pending grants.
In such cases, Gifford should weigh the substantive drawbacks
and risk of adverse publicity against the expected political
benefits, consulting with others as needed. He should then
make a final decision on whether the grant is to be approved.
Also, in order to minimize the risk of embarrassment to the
President, the volume of grants designated “musts” in any one
Department should be limited. Gifford should make these
judgments on a month-to-month basis, drawing, naturally,
from the grant coordinating group and the Departmental
contacts.
It may be a fair reading of the last-quoted passage that Mr. Horton
is recommending that, in some cases, grants that are “substantively
irresponsible or an obvious waste of government funds relative to
other pending grants” should be made if the political reward is suf-
ficiently great. Both Mr. Horton and Mr. Malek disagree with this
interpretation. See Malek executive session, April 8, 1974. 16
The Horton memorandum apparently was transmitted to Messrs.
Mitchell, Haldeman, Magruder, Gifford, Millspaugh, and Flemming,
among others. Malek has insisted that this document was nothing
more than a discussion draft (as the first page of the document indi-
cates) and was not acted upon as outlined here. 16 Malek does not recall
that he criticized Horton for the ideas therein presented. He does not
recall that disapproval of this document was expressed to him by its
various recipients. 17 To the contrary, the memorandums of transmit-
tal for this document found at Malek exhibit No. 8, 18 generally indi-
cate approval of and interest in the program Horton advocated. More-
over, as will become clear in the next section, many of the specifics
Horton posited were incorporated into the Responsiveness Program,
a plan largely devised by Horton under Malek’s direct supervision.
III. THE “RESPONSIVENESS PROGRAM”— THE ADMINIS-
TRATION’S BASIC PLAN TO EMPLOY FEDERAL RE-
SOURCES TO AFFECT THE 1972 PRESIDENTIAL ELEC-
TION
A. The General Plan
The responsibility for developing an overall strategy respecting
the use of Federal resources for reelection purposes was given by
Haldeman to Malek. On March 17, 1972, Malek submitted to Halde-
man a document entitled “Increasing The Responsiveness of The
Executive Branch.” 19 The document, which was initially drafted by
William Horton and designated “Extremely Sensitive — Confidential,”
constituted Malek’s broadview conception as to how the Federal bu-
15 18 Hearings 8219.
18 18 Hearings 8211.
17 18 Hearings 8220.
18 18 Hearings 8348-51.
19 Malek exhibit No. 4, 18 Hearings 8311.
368
reaucracy could be put to work for the President’s reelection. His plan
subsequently received Haldeman’s approval. 20
This memorandum gives a clear picture of the scope of the plan,
demonstrating that the proposal was to shape diverse types of admin-
istration activities to meet reelection needs. For example, election re-
quirements were to be taken into account in: The letting of Govern-
ment grants, contracts, and loans; the bringing and prosecution of
legal and regulatory action ; the making of administration personnel
decision; the determination of the issues and programs to be
stressed by the administration ; the communicating of administration
activities to the voting public.
The use of Federal funds for reelection purposes received particu-
lar attention. Under the heading “Present efforts tap only a fraction
of the total potential,” the document says :
The Department of Commerce provides a good example.
To date Gifford has made some 35 requests. Most of these
involved expediting the normal grant reviewing process and
securing the release of information. Approximately a dozen
of these requests resulted in favorable grant decisions (which
otherwise would not have been made) involving roughly $1
million. Politically these actions have been most beneficial.
Nevertheless, in spite of this achievement, the potential
is much greater. In the Commerce Department, for example,
there is nearly $700 million in funds remaining in this fiscal
year and over $700 million in next fiscal year which could be
redirected in some manner. The major areas of potential
for fiscal year 1973 are: Economic Development Adminis-
tration, $275 million; Regional Action Planning Commis-
sions, $40 million; Minority Business Enterprises, $38 mil-
lion; National Oceanographic and Atmospheric Adminis-
tration, $100 million ; and the Maritime Administration, $230
million. Even if only 5 percent of this amount can be re-
channeled to impact more directly on target groups or geo-
graphic areas, it would be a substantial increase over the cur-
rent efforts.
To capitalize upon such opportunities, the Departments
must initiate action themselves. This would entail each De-
partment developing a program by which it would system-
atically but discreetly seek out opportunities for improving
services to target groups and geographic areas and then
insure that appropriate action is taken. 21
The document continues :
. . . [A]s originally envisioned in establishing Gifford’s
grantsmanship operation, direction to the Departments on
politically sensitive operating matters should be centralized
in order to utilize this resource most effectively in serving
target groups and geographic areas and to reduce the pos-
sibility of adverse publicity.
But the program involved much more than the use of F ederal mon-
eys. Under the heading “Guidelines” Malek stated :
20 18 Hearings 8209-10.
81 See further 18 Hearings 8230-31.
369
As a first step, the Departments should be given clear
guidelines covering the political priorities, the types of op-
erating decisions which are to be included in the program,
and the procedures for planning and tracking progress.
The political priorities would be spelled out in terms of
key States and major voting bloc groups upon which De-
partmental action could have an impact. The Departments
would be updated as needed, as the political priorities
evolve.
Next, the types of activities covered under this program
wrnuld be discussed. The major ones, of course, are positive
decisions (that is, project grants, contracts, loans, subsidies,
procurement and construction projects), and negative ac-
tions (that is, taking legal or regulatory action against a
group or governmental body, major cutbacks in programs,
and relocation of Department operations) .
* * sfc * *
Also, under this program, the Departments would be ex-
pected to cultivate the leaders of organized groups which are
affected by the Department to gain the support of their
groups for the President’s reelection. Similarly, the Depart-
ments would be expected to take discreet and subtle steps to
gain employee support of the President’s reelection.
Particularly important to the present study is the clear prescrip-
tion in this document that “legal or regulatory action” should be
shaped to benefit the campaign effort. In this regard, the memoran-
dum quoted in the previous section that referred to legal actions by
the Department of Justice as a form of “patronage” to be utilized for
campaign purposes should be recalled. 22
The March 17 document recommended further that the Departments
be given certain responsibilities to implement the responsiveness plan.
Each Department should be required to develop a plan to
insure operating decisions reflect the priorities to the greatest
extent possible. The plans would outline what amount of
discretionary resources in each area identified above will be
allocated to priority areas and groups along with a timetable
and responsible individual. Also included would be steps
planned for strengthening control over the relevant operating
decisions, the announcement process, and the public relations
improvements. Finally, the plan would cover actions for
cultivating organized groups and for gaining the support of
Departmental employees.
Various White House and OMB staffers were assigned responsi-
bilities. For example :
. . . Gifford would work with Fred Malek and his staff in
establishing and supervising the Departmental programs.
Gifford would be the principal contact for operating matters
with the Departments, communicating to the Departments
the political priorities as well as the “must” operating deci-
sions. Also, he would participate in presenting the guidelines
22 18 Hearings 8610 .
370
discussed earlier to the Departmental contacts, reviewing the
Departmental plans, and evaluating progress reports.
Mr. Gifford, however, has represented to the Select Committee that
he played no significant part in either the planning or the imple-
mentation of the Responsiveness Program. He did remark that he
advised Cabinet officers as a general matter to make expenditures in
areas where it would be of value to the President. Mr. Horton has
stated that Mr. Gifford was involved in implementing the concepts
in the March 17 memorandum.
The Responsiveness Program was to be kept secret with efforts taken
to insure that the President and the White House were not connected
with it. Under the heading, “Possible Drawbacks,” the March 17
memorand u m states :
The most significant drawback of the program is, of course,
the risk of adverse publicity. Naturally, steps would be taken :
(1) To insure that information about the program itself and
the Departmental plans would not be leaked; and (2) keep
the President and the White House disassociated with the
program in the event of a leak.
First, written communications would be kept to a mini-
mum. There would be no written communications from the
White House to the Departments — all information about the
program would be transmitted verbally. The only written
material submitted by the Departments to the White House
would be the plans. These would be in a brief outline format
and only two copies would be permitted — one for the White
House and one for the Departmental contact. Progress re-
ports would be verbal.
Second, the documents prepared would not indicate White
House involvement in any way. Also, oral and written com-
munications concerning the program within the Department
would be structured to give the impression that the program
was initiated by the Department head without the knowledge
of the White House. 23
The memorandum concludes with the statement that the Depart-
ments “must be given a clear understanding [that] the program [has]
the President’s full backing.” Malek, however, has testified that he did
not know if the program did, in fact, have the President’s “full back-
ing.” 24 Mr. Haldeman has stated that he does not recall discussing
the specifics of the program with the President. 25
Malek’s concept of the Responsiveness Program is also contained in
other documents that are appended to this report as exhibits :
1. A December 23, 1971, “Confidential” memorandum from Malek to
Haldeman entitled “Redirecting the White House Staff to Support
the President’s Re-Election.” 26
2. Another “Confidential” memorandum of the same date and simi-
lar title from Malek to Kenneth Cole of Ehrlichman’s staff. 27
23 See further 18 Hearings 8229-30.
24 18 Hearings 8210.
26 18 Hearings 8180.
26 Malek exhibit No. 5, 18 Hearings 8320.
27 Malek exhibit No. 5, 18 Hearings 8320.
371
3. A “Confidential” memorandum from Malek to Haldeman dated
J anuary 28, 1972, entitled “My Bole in Support of Be-election.” 28
4. An undated “Confidential Eyes Only” memorandum (the text
indicates it was written in January or February 1972) from Malek to
Haldeman entitled “Organizing For And Implementing New Eespon-
sibilities.” A number of comments in Haldeman’s handwriting are
found on this document. Attached to this memorandum is a “Confi-
dential” organization chart setting forth Malek’s role in the campaign
which he has confirmed as accurate in most essential particulars. 29
5. A “Confidential” memorandum dated February 16, 1972, to Mitch-
ell and Haldeman from Malek entitled “Meeting To Discuss My
Eole.” 30 (The meeting referred to was with Ehrlichman and George
Shultz.)
6. An April 28, 1972, document entitled “John Mitchell Briefing On
Eesponsiveness” designated “Draft-Confidential.” This document was
prepared by Frank Herringer, another Malek staffer. 31
7. An undated memorandum containing Malek’s handwriting en-
titled “Administration Efforts In Support Of The Be-election” pre-
pared in May 1972, and used for briefing White House constituent
group project managers and CEP voting bloc directors. 32
These documents need not be discussed in detail, but several com-
ments are in order. First, the memorandums indicate that the Eespon-
siveness Program was viewed as a potentially significant part of the
reelection effort as the following quotations indicate: “Department
Eesponsiveness : This is potentially one of the most productive activi-
ties we will undertake.” 33 “Potentially, one of our most significant
advantages over the opposition is incumbency — if it is used proper-
ly.” 34 Haldeman, during the staff interview previously referenced,
stated that he was “serious” about sensitizing the bureaucracy to polit-
ical considerations. 35
Second, these documents demonstrate that the goal of the Eespon-
siveness Program was “to politicize” the executive branch. Thus,
Malek, in discussing his potential campaign role, suggested that some-
one was needed to “ [t] ake the lead in the program to politicize Depart-
ments and Agencies” and to “supervise the patronage operation and
closely monitor the grantsmanship project to insure maximum and
unrelenting efforts.” 36 A fuller statement of this concept is contained
in the December 23, 1971, “Confidential” memorandum from Malek to
Haldeman. 37 After noting that a basic campaign objective was to
“politicize” the bureaucracy, Malek, under the rubric “Politicizing the
Executive Branch,” wrote :
As you have pointed out, the President’s unique asset in the
forthcoming campaign is his control of the Executive Branch.
The White House must ensure that the President is able to
capitalize fully upon this asset.
28 Malek exhibit No. 1, 18 Hearings 8291.
29 See 18 Hearings 8203 ; Malek exhibit No. 3, 18 Hearings 8305.
20 Malek exhibit No. 2, 18 Hearings 8297.
21 Malek exhibit No. 7, 18 Hearings 8342.
32 Malek exhibit No. 15, 18 Hearings 8370.
33 See Item 4 above ; Malek exhibit No. 3, 18 Hearings 8305.
34 See Item 6 above ; Malek exhibit No. 7, 18 Hearings 8389.
35 See 18 Hearings 8176; see also Ehrlichman Interview, 18 Hearings 8187, 8189.
36 See Item 3 above ; Malek exhibit No. 1, 18 Hearings 8291.
37 See Item 1 above ; Malek exhibit No. 5, 18 Hearings 8320.
As you know, we have already initiated programs to derive
greater political benefit from grants, co m mu ni cations, and
personnel. Also, as discussed above, we will soon be establish-
ing firm White House control over the handling of key issues
and constituent groups. These White House directed efforts
will control the key Executive Branch operations havmg the
highest potential political payoff. In addition, we should take
action to ensure that the day-to-day Departmental operations
are conducted as much as possible to support the Presi-
dent’s re-election. Since it is impossible for tlie White House
to directly control day-to-day activities, we must establish
management procedures to ensure that the Departments sys-
tematically identify opportunities and utilize resources for
maximum political benefit.
To illustrate potential political activity by Departments and Agen-
cies, Malek stated :
For instance, GSA might undertake the following :
— Emphasize building construction in key States, cities,
and counties.
— Expedite disposal of property for parks and schools in
key States.
— Emphasize dual fuel programs in ecology -minded areas
of key States.
—Emphasize minority procurement in those States and
areas where there is a real opportunity to win some of the
Black vote.
And he noted that :
Politicizing the regions, which we have discussed, would
be a natural byproduct of this program, since the regions
would carry the major burden of implementing these polit-
ically helpful actions . 38
Malek, however, had reservations about referring to his plan as a
“politicizing” operation. In the same memorandum, he suggested:
Naturally, carrying out this program, even if done dis-
cretely, will represent a substantial risk. Trying to pressure
“non-political” civil servants to partisanly support the Presi-
dent’s re-election would become quickly publicized and un-
doubtedly backfire. Consequently, the strategy should be to
work through the top and medium-level political appointees
who exercise control over most of the Departmental decisions
and actions.
Also, to minimize any direct links to the President, there
should be no directions on this project in writing, and most of
the initiative should come from the Department Heads them-
selves. (In fact, as this concept is refined further, I propose
we stop calling it “politicizing the Executive Branch,” and
instead call it something like strengthening the Government’s
responsiveness.)
This last suggestion was eventually followed and the concept be-
came known as the Responsiveness Program . 39
88 See also Malek’s testimony at 18 Hearings 8232.
88 Mr. Malek’s testimony as to this document Is found at 18 Hearings 8213.
373
Mr. Malek has described the Responsiveness Program as more
benign than these documents suggest. According to Malek, its main
thrust was to insure that the departments and agencies, taking all
factors into account, serviced deserving groups and then properly
communicated their good works to the voting public. 40 His account,
however, should be compared with the description of the program in
public testimony of William Marumoto, a White House aide connected
with the Responsiveness Program : 41
Senator Talmadge. What was the responsiveness group?
Mr. Marumoto. As I explained this morning, this was a
group of four or five gentlemen who initially were under the
leadership of Mr. Malek and later under the leadership of
Dan Kingsley, who were responsible to and working with
various special interest groups under Mr. Colson’s opera-
tion as well as our personnel operation to make sure that the
various departments and agencies were responsive to requests
that went to them from the White House on personnel mat-
ters, publicity, public relations, and grants and contracts.
Senator Talmadge. Simplified, it was a group to take maxi-
mum political advantage of public dollars that were awarded
in the form of public grants and contracts, was it not?
Mr. Marumoto. A system to facilitate some of our requests.
Senator Talmadge. “Facilitate” — what do you mean by
that?
Mr. Marumoto. Try to get through the bureaucratic red
tape.
Senator Talmadge. In other words, my statement is correct.
It was to maximize the advantage of the American taxpayers’
dollars in a political effort, was it not ?
Mr. Marumoto. Yes. 42
B. The Plan as Conceived With Particular Reference to
Minority Groups
As discussed in section Y, there was much activity of the respon-
siveness ilk in connection with minority-oriented Federal programs.
Because of this — and because of. the considerable detail in which they
were set out in written form — it is useful to discuss separately the
specific plans to use the incumbency that were formulated to appeal
to Spanish-speaking and black constituents.
1. SPANISH-SPEAKING PLANS
The basic strategy for using Federal resources for campaign pur-
poses regarding Spanish-speaking voters was outlined in a confidential
document entitled “The Campaign To Re-elect the President, The
Plan To Capture the Spanish Speaking Vote” 43 prepared in early
1972 by Alex Armendariz, head of the Spanish-speaking voters di-
vision at CRP. Under the heading “Implementation Tools,” Armen-
dariz wrote :
* See , e . g ., 18 Bearings . 8216, 8242-43, 8261-62.
41 See see. V.A. below.
42 13 Hearings 5318-19.
48 Exhibit No. 9, 19 Hearings 8627.
374
Use the incumbency to the greatest extent possible to stroke
this community over the next several months through ap-
pointments, grants, program development, accelerated pro-
gram implementation, and publicity of the President’s record
through the departments and agencies. [Emphasis in orig-
inal.]
And on page 13 he noted :
The purpose of the White House Spanish Speaking Con-
stituent Group Task Force is to mobilize the resources of
the Executive Branch in support of the campaign effort. This
task force is responsible . . . for obtaining Spanish speaking
personnel appointments, grants and other program initia-
tives. . . .
Tab G of this document, entitled “Capitalizing on the Incumbency,”
is particularly important and is set forth in full text :
Substantial assistance to the Spanish speaking campaign
can be provided through use of the control of the Executive
Branch. Through this control, we can fill in any gaps in the
President’s record and generate favorable publicity for the
campaign persuasion effort. In addition, a number of Spanish
speaking programs are sources of political information.
Bill Marumoto is responsible for submitting a plan to
capitalize on the incumbency by May 1. The elements of this
plan will be directed to achieving the following end results :
1. To develop specific ideas for using grants, personnel
appointments and programs to fill out any gaps in the Presi-
dent’s record, e.g., appoint a Mexican American to a regula-
tory commission.
2. To set up organizational procedures and contacts with
the appropriate White House Staff members and the Execu-
tive Branch for accomplishing the above steps.
3. To provide the campaign team with up to date informa-
tion on all programs directed at the Spanish speaking com-
munity.
4. To use the Departments and Agencies public information
offices to publicize favorable Administration activities in be-
half of the Spanish speaking.
5. To ensure that those Federally subsidized programs
which serve as havens for opposition political operatives are
closely supervised so that they are devoting all their energies
toward solving the problems of the Spanish speaking poor
(particularly in September and October) . 4 *
Mr. Marumoto has testified that he prepared and submitted the
plan referred to in the above document. 45 The Select Committee, how-
ever, has not obtained a copy of this plan. But the detailed account in
section Y.A. of this chapter of the actual conduct that occurred re-
garding the Spanish-speaking community presents a comprehensive
view of the type of activities encompassed by the above outline.
« See exhibit No. 262-1, 13 Hearings 5532.
45 13 Hearings 5279.
375
2. BLACK PLANS
The overall plans to use the incumbency to achieve black support in
the 1972 campaign appear in several documents. The earliest is a “Con-
fidential,” “Final” document, dated March 15, 1972, and entitled “Cam-
paign Plan — A Strategy for the Development of the Black Vote in
1972.” 46 Significant for present purposes is a paragraph that appears
at pp. 23-4 of this document under the heading “Use of Administra-
tion Resources” :
To augment organizational efforts it is proposed to make
use of Administration resources to provide visible support
of deserving projects. With team members working closely to
monitor economic and social programs a selective funding ap-
proach will furnish encouragement incentives for Black in-
dividuals, firms and organizations whose support will have a
multiplier effect on Black vote support for the President. This
will call for working with OMBE, SBA, Department of La-
bor, OEO, HUD, HEW and the Justice Department. What
we do economically will be a vital key politically.
The “team” referenced in this paragraph is identified at p. 21 of this
exhibit :
In order to assure maximum coordination from the out-set
a team approach to implementation of strategy and execution
of the plan of action will be used. The team coordinating ef-
forts will include Robert Brown, Special Assistant to the Pres-
ident ; Stan Scott, White House Communications Staff Mem-
ber; Ed Sexton, RAC; Samuel Jackson, Assistant Secretary
of HUD (representing the Council of Black appointees) ; and
Paul R. Jones, Black Vote Division Executive Director. It is
anticipated that this group will meet regularly on a weekly
basis and inter-act daily as needed.
This memorandum concludes (at p. 24) :
In support of staff efforts it is proposed that emphasis be
placed on closer control of grants, loans, contracts and ap-
pointments — especially from socially-oriented Departments
and agencies. What the Administration does economically is
key. The major issues of concern to the rank and file Black
voter are those which have an economic base. They are con-
cerned about those things that affect day to day livelihood
and well-being.
Testimony taken by the Select Committee establishes that this docu-
ment was probably the composite product of several contributors,
among whom were Paul Jones of CRP and Robert Brown of the White
House. 47
The use of administration resources in the black area was spelled
out in greater detail in a “Confidential” June 15, 1972, memorandum
from John Clarke to Malek entitled “Black Vote Field Plan.” 48 At
pp. 5-6, of this document, the following passage appears :
46 Exhibit No. 10, 19 Hearings 8713.
47 Jones executiye sessions, Feb. 26, 1974, pp. 132-34.
48 Malek exhibit No. 23, 18 Hearings 8411-12.
376
Special Activities: Grants and Government Resources
At the present time, Bob Brown and his staff are handling
the grants activity. To date, they have identified all Blacks
who are receiving, or have received, money from this Admin-
istration. These recipients are being utilized as a source of
campaign contributions and volunteers and as a vehicle for
getting our appointees invited to various Black events as
speakers and participants. They also form an excellent group
of visible Blacks and they are being used to reach the voters
in their areas of influence. 49
In addition to the above results, Bob and his staff are ac-
tively seeking out other projects that could be funded to the
benefit of the campaign. They are specifically looking for
pro j ects that will impact heavily on Blacks due to voter appeal
and Black involvement. To date, they have been very success-
ful. In this area, a local Black building contractor (Jack
Crawford) has developed a program for identifying potential
projects, getting them funded through Bob’s office and, in
return, obtaining a strong vote commitment for the Presi-
dent from the recipient. This plan is being actively pursued
at present. Another specific project that is underway is the
identification of all remaining grant and loan moneys with a
view to carefully allocating those funds to projects which
will impact most heavily on black voters. 50
Finally, Bob and his staff are working closely with Dan
Kingsley to identify various advisory boards and commis-
sions and job openings which can be filled by visible Blacks.
Even with the accomplishments so far, more work needs to
be done in this area and plans are currently being drawn to
more effectively develop and coordinate this activity.
The “Crawford Plan” mentioned above is found at exhibit No. II. 51
The plan, at p. 2, states :
In order to obtain endorsements from . . . local Black
leaders who will in all probability be at least nominal Demo-
crats, some inducements will need to be offered. The induce-
ments could be federal financial from the normal grant-in-
aid programs administered by HEW, HUD, OEO, DOL,
SBA, EDA, OMBE, and USDA.
The [recommended] locally based national representative
(assisted by Black representatives of the various federal
agencies) will be able to offer federal aid grant assistance to
those leaders who are willing to endorse the President or at
least make positive statements concerning the higher level of
assistance currently being enjoyed by his institution under
this administration.
“Mr. Brown In executive session denied that he utilized black recipients of Federal
funding as a source of campaign contributions. Brown executive session, May 13, 1974,
pp. 46-49.
“ Brown also denied seeking out projects that could be funded for the benefit of the
campaign. (Brown executive session, p. 47.) Mr. Crawford, in executive session, testified
that, while he had developed the program referred to above, he was not “actively pursuing”
it at the time of this memorandum. (Crawford executive session, Feb. 7, 1974, pp. 40-42.)
61 19 Hearings 8745.
377
In addition, Crawford recommended (pp. 3-4) that :
There should be a “White House” representative who can
facilitate assure [sic] the delivery of federal grant-in-aid
funds to leaders who endorse the President and the Adminis-
tration’s efforts to improve the lot of Blacks. This liaison
man is charged with coordination of the federal agency per-
sonnel who are in turn charged with determining assistance
needed by the institution.
During his Executive Session, Mr. Malek testified that he did not
recall receiving or seeing a copy of the “Crawford Plan.” However, as
exhibit No. 11 demonstrates, the plan was sent on June 26, 1972, to
Malek by Eobert Mardian, a CEP official who is a former Assistant
Attorney General for the Internal Security Division, with the sug-
gestion that he and Malek meet with Crawford to discuss the matter.
Of the same date is a memorandum from Malek to John Mitchell
entitled “Black Vote Campaign Plan.” 52 Under the heading “Inten-
sify Efforts To Utilize Government Grants and Loans” are the fol-
lowing paragraphs :
I feel that our strongest selling point with Black voters is
the economic assistance this Administration has provided to
Blacks. To fully capitalize on this, we have to do a better job
of publicizing the grants already given and of identifying
new projects for which we will receive maximum impact.
The major portion of the responsibility for this activity
falls on the White House side of the Black team. Bob Brown
and his staff have identified all Blacks who are receiving, or
have received, money from this Administration. These recipi-
ents will be utilized as a source of campaign contributions
and volunteers, and as a group of highly visible Blacks to be
used to reach the voters in their areas of influence.
Effective allocation of new grants requires close coordina-
tion between the White House and the Campaign team. As a
first step, I have asked Bob Brown to identify all major
sources of grant and loan moneys which could be allocated to
Blacks. Then, Jones and Sexton, working through their field
organization, will be responsible for finding recipients in key
cities who will be supportive of the re-election effort.
* * * * *
I believe that by strengthening our field organizations and
making better use of grants and loans, we can overcome the
problems of the Black Vote Division, and make some in-
roads on Black voters in November. I will keep you apprised
of progress.
Malek testified he was not certain that this document was actually
read or approved by him or forwarded to Mitchell; however, he did
not deny sending it to Mitchell. He stated that normally memoran-
dums would not be sent to the campaign director over his name unless
he had read and approved them. The committee, subsequent to Mr.
Malek’s testimony, discovered another copy of this document in Clark
62 Malek exhibit No. 24, 18 Hearings 8414.
378
MacGregor’s CEP files that was initialed by Mr. Malek. 53 Malek did
not recall Mitchell’s expressing disapprobation of the plans set forth
in this memorandum. 84
IY. COMMUNICATION OF THE RESPONSIVENESS CON-
CEPT TO GOVERNMENT AND CAMPAIGN OFFICIALS
The significance with which the Responsiveness Program was
perceived is evidenced by the efforts taken to inform key Government
and campaign officials of the workings of the program. The most
important of these briefings are now discussed.
1. The various Malek documents referenced in the previous section
suggest that key White House and OMB staffers such as Ehrlichman,
Shultz, and Ken Cole were made aware of responsiveness concepts.
Haldeman was particularly of the mind that Ehrlichman and Shultz
should be informed about, and approve of, the responsiveness plan. In
his handwritten comments on a memorandum to him from Malek 55
he stated, in the margin by Malek’s paragraph on “Department Re-
sponsiveness,” that “Prob here is essential support of E&S — q. whether
they really fully understand & agree to this whole deal. E esp is the
key to dealing w/depts. & must be on board 100%.” However, in an
interview with the committee’s staff on February 8, 1974, Mr. Ehr-
lichman stated he had little knowledge of the Responsiveness Pro-
gram. 56 Mr. Shultz, in a staff interview, likewise asserted only pass-
ing familiarity of responsiveness activities. Mr. Shultz did state that
he saw one memorandum written by Malek concerning the Responsive-
ness Program, decided it was a “horrible” idea, and transmitted this
view to Mr. Haldeman.
2. Shortly after the program was approved, key departmental and
agency personnel were briefed on its precepts. In a “Confidential Eyes
Only” memorandum entitled “Responsiveness Program — Progress Re-
port” attached to a June 7, 1972, memorandum from Malek to Halde-
man, 57 Malek stated :
Thus far, the program is on schedule. I have now reviewed
the program with each Cabinet Officer (except Rogers) and
with the heads of the key Agencies (ACTION, EPA, OEO,
SB A, GSA, and VA). In each session the following was cov-
ered :
— Emphasized need to make re-election support the top
priority and the need to respond to requests in this regard
— Discussed which States, counties, and voting blocs are
considered key and should be targeted by them
— -Had them name a top official who would be the political
contact for this program (generally the Under Secre-
tary)
— Asked them to educate loyal appointees (including Re-
gional Directors) as to priorities and expectations, thus
forming a political network in each Department
53 Exhibit No. 19a. 19 Hearings 8859.
“ 18 Hearings 8259, 8262-63. 8265-66.
65 Malek exhibit No. 3, 18 Hearings 8305.
50 18 Hearings 8187.
67 Malek exhibit No. 16, 18 Hearings 8380.
379
— Asked them to review all their resources and develop a
plan for maximizing impact of these resources in key
areas
— Indicated particular areas in their Departments that re-
quire special attention
—Established my office as the channel of communications
with the campaign and stressed that we would work
solely through Bill Gifford on grant requests.
In line with this last point, two members of my staff (Stan
Anderson and Rob Davison) have been relieved of other re-
sponsibilities to concentrate on this. They have now held
follow-up meetings with the Secretary’s designee in most De-
partments to discuss the program in more detail and begin
development of the Department Action Plans. These sessions
will be completed in the next few weeks. In addition, I
have held follow-up meetings with the top political appointees
and with the Regional Directors in several Departments. I
will hold additional meetings of this sort over the next few
weeks.
Mr. Malek testified before the Select Committee that, in his briefings
with department and agency chiefs, he employed colorcoded maps that
depicted target groups and geographic areas where Government re-
sources should be concentrated for campaign purposes. Listings of
various Government officials contacted respecting the Responsiveness
Program by Malek and his associates are found at Exhibit 12. 5S
Malek also provided Haldeman, in the June 7 memorandum, with an
assessment of the success of his briefings :
The response to date has been fairly good, particularly at
the second echelon. The reaction of some in the Cabinet (e.g.,
Romney and Hodgson) was that they were, of course, already
considering political ramifications and there is little more that
can be done. Our approach here is to concentrate on the Under
Secretary and other Presidential appointees, where the job
gets done anyhow. Others, such as Volpe, Peterson, and Butz,
have been quite receptive and should 'be real assets to the
program.
3. John Mitchell and other key aides at CRP were briefed. 59 The
briefing memorandum prepared for the Mitchell session (Malek ex-
hibit No. 7) indicates that Mitchell was informed in detail of the
information meetings held with the department and agency heads.
Malek testified that this briefing paper “probably clearly represents”
his discussion with Mitchell. 60
4. Stanton Anderson and Frank Herringer briefed the White House
constituent group project managers and the CRP voting bloc directors
on the various facets of the administration’s plans “to take advantage
of the incumbency to the maximum degree possible” during a meeting
at Camp David on May 25 and 26, 1972. Various documents appended
to this report reflect the nature of that meeting and its participants. 61
58 18 Hearings 8230, 19 Hearings 8748.
50 See Malek exhibits Nos. 7 and 15 ; 18 Hearings 8342 and 8370.
60 18 Hearings 8232.
61 See Malek exhibit No. 14-15, 18 Hearings 8367 and 8370.
380
This meeting is of particular importance because it was attended by
key aides in the Spanish-speaking, black and old age areas where
there was considerable responsiveness-type activity.
The briefing paper used at this meeting has been previously refer -
enced. 62 It parallels other documents already discussed with several
significant additions. The participants were apparently asked to “be
alert to opportunities to utilize the resources of the incumbency to
improve our position with your constituent group.” It appears that
they were instructed to attempt “to come up with a list of ten or so
persons from your groups that you would like to see placed” in Govern-
ment positions for campaign purposes by the White House personnel
office. This group was also apparently told that:
In a one-shot effort, all major grants and construction deci-
sions for next fiscal year (72-73) were reviewed prior to the
finalization of the budget to ensure that to the extent possible
they impacted on politically beneficial areas. 63
5. Finally, certain State chairmen for the Committee To Re-Elect
the President from “first and second key priority States” received a
briefing on the Responsiveness Program. 64 The major purpose under-
lying this briefing was to encourage politically oriented requests for
Government action from these campaign officials. 65
V. RESULTS OF THE RESPONSIVENESS PROGRAM AND
OTHER RELATED ACTIVITIES 66
A. Activities Respecting the Spanish-Speaking
The portion of the Responsiveness Program presented in public tes-
timony involved activities in the Spanish-speaking community. On
November 7, 1973, William Marumoto, former staff assistant to the
President, testified concerning the wide ranging attempts on the part
of certain White House ana campaign officials to divert Federal
resources to organizations and individuals in the Spanish-speaking
community to assist the reelection effort. 67 His testimony and other
evidence in the Select Committee’s possession appear to demonstrate
a concerted effort to reward certain administration friends and penal-
ize its opponents.
Marumoto’s testimony prompted the following statement by Senator
Montoya :
[I]n view of the motive that permeates the planning and
blueprint of this mission and the testimony of the witness,
I feel very much obligated to comment on the incredible insult
that the administration has perpetrated on the Spanish-
® See section III. A., supra,
63 See Malek exhibit No. 15, 18 Hearings 8371 ; see also 18 Hearings 8219. 8224-25, 8233.
** Malek exhibit No. 13, 18 Hearings 8366, reflects the suggestion for and approval of
such a briefing ; note Malek’s handwritten comments.
88 See further , 18 Hearings 8214-15.
w This section includes descriptions of certain activities which were not the direct
result of the Responsiveness Program, but that are related in character to those actually
conducted under its banner.
67 Marumoto’s testimony gives substance to the conclusion reached in a Nov. 14, 1972,
final “Campaign Report” from Alex Armendariz of CRP to Robert Marik that :
The incumbency was utilized to the greatest advantage as possible through appoint-
ments, grants, accelerated program implementation, and publicity of Administration
programs through the Federal department and agencies. (See exhibit No. 13, p. 4,
19 Hearings 8758.)
381
speaking people of this country by this blatant attempt to
buy the Spanish-speaking voters. They are not for sale in
this country. There was a concerted effort to try to convince
them that there was money in the trough if they just lined
up, and the Spanish-speaking people of this country are not
that kind of voter. 68
According to the 1970 census, there were then more than 10 million
Spanish-speaking citizens in this country. The plan to capitalize on
the incumbency with respect to this community was an attempt to
gain support, votes, and contributions regarding a constituency that
had been “heavily Democratic in the past.” 69 The administration con-
centrated its efforts in this regard on such States as Florida, Texas,
and California where the greatest number of Spanish-speaking citizens
reside. The major activities discovered by the committee are now
discussed.
1. ORGANIZATION OF SPANISH-SPEAKING EFFORT
The leaders of the Spanish-speaking effort during the 1972 Presi-
dential campaign included officials at the White House, the Cabinet
Committee on Opportunities for the Spanish-speaking People (an
independent office in the executive branch more fully described below),
and the Committee To Re-Elect the President. For clarity, the major
figures involved are identified :
William Marumoto, former Staff Assistant to the President, was
involved at the White House in a wide range of activities, including
recruiting for Federal employment (particularly from minority
groups) , assisting Spanish-speaking firms and organizations in obtain-
ing Federal funds, and public relations for Spanish-speaking efforts
and activities.
Antonio F. Rodriguez was Marumoto’s assistant in the White House
after September 1971. In the period from January to September 1971,
Rodriguez was the Chairman of the Cabinet Committee on Opportuni-
ties for Spanish-Speaking People.
Henry Ramirez became Chairman of the Cabinet Committee in Sep-
tember 1971.
Carlos Conde, an assistant during 1972 to White House Communi-
cations Director Herbert Klein, was involved in the campaign’s media
plan to reach Spanish-speaking people.
Alex Armendariz headed the CRP Spanish-speaking voters division.
Benjamin Fernandez was the chairman of the National Hispanic
Finance Committee, an arm of the Finance Committee to Re-Elect the
President (FCRP).
According to Marumoto, the above-named individuals — with the
exception of Fernandez — constituted the Spanish-speaking task force.
The task force, officially known as the “White House Spanish-speaking
Constituent Group Task Force,” was, according to Marumoto, an in-
formal arrangement,” which met every Monday afternoon during the
campaign. 70 While the exact lines of authority concerning these in-
dividuals is not certain, it is clear that all of them were heavily in-
volved in attempts to use the incumbency to gain Spanish-speaking
“ 13 Hearings 5308.
• Exhibit No. 9. 19 Hearings 8617.
™ 13 Hearings 5277.
382
support. Furthermore, organizational charts prepared separately by
Marumoto and Armendanz show the Cabinet Committee, the White
House Spanish-speaking unit and the Hispanic divsion of CEP as part
of one overall campaign structure, although on Marumoto’s chart he
has Armendanz reporting to him while the converse is true on the
chart prepared by Armendariz.
2. ACTIVITIES INVOLVING THE DISPENSING OF FEDERAL FUNDS
There is substantial evidence that, respecting the Spanish-speaking
area, political elements in the administration and campaign committee
sought and achieved control over the awarding of certain governmen-
tal grants and contracts. 71 When questioned concerning an OEO grant
to a Spanish-speaking firm in California, Marumoto testified :
Hash. Now, what was the role of Alex Armendariz from
the Committee To Ee-Elect the President, which was the
political branch of the CEP for the campaign, in meeting
with Mr. Blacher of OEO and discussing your grant of
$200,000 ? Why was he there ?
Marumoto. He was involved in terms of signing off on any
grants.
Dash. When.you say “signing off,” did that mean he would
have to agree?
Marumoto. Approve, yes.
Dash. He would have to approve ?
Marumoto. Yes. 72
Subsequently, Marumoto, while stating that Armendariz “didn’t
have [legal] authority, of course, to sign off,” testified that Armendariz
“had a say” or “input” in the grantmaking process. He then added :
Dash. They expected him to sign off on it and generally if
he didn’t sign off on it, it wasn’t granted.
Marumoto. Generally speaking, yes.
Dash. Therefore, it would be fair to say that a very strong
outside political influence was introduced in the grantmaking
process of the various agencies.
Marumoto. Yes. 73
Armendariz denied involvement in Government grants and dis-
claimed the power to sign off on Federal awards, stating “I never en-
gaged in specific discussion on any particular grant or contractor of
any sorts.” 74 When asked about references to his name in reports indi-
cating he was influencing grants, he said the references “worried” him
and that he frequently objected to White House staffers Frank Her-
ringer and Jerry J ones about their inclusion. 75
Documents obtained by the Select Committee contain numerous indi-
cations that the campaign team was interj'ecting political considera-
tions into the grantmaking process. For example, a March 17, 1972,
71 White House and campaign committee memorandums reveal political input as to
$60 million in grants considered or actually awarded by the administration regarding the
Spanish-speaking community.
72 13 Hearings 5281.
73 13 Hearings 5322.
74 Armendariz, executive session, Feb. 11, 1974, p. 65.
73 Id. at pp. 103-5.
383
White House memorandum from Marumoto to Colson, entitled
“Weekly Report for Brown Mafia, Week of March 13-17, 1972” 76
reads:
Alex Armendariz, Tony Rodriguez and I met with repre-
sentatives of Harry Dent’s, Clark McGregor’s (sic) and Bob
Brown’s offices with the grant officials of OEO to discuss ways
of improving coordination and more effective means of get-
ting political impact in the grant-making process. Discussion
pointed out the tremendous need for a centralized computer
capability for all Departments and Agencies whereby one
could obtain data regarding grants to any congressional dis-
trict, and/or organization. 77
To cite another example, on March 24, 1972, Marumoto wrote an
“Administrative — Confidential” memorandum to Colson (copy to
Malek) that stated :
Attended a meeting called by John Evans regarding minor-
ity business enterprise. Asked that Armendariz and Rodri-
guez also be invited. Discussed were recipients of grants for
FY 1972 as well as those being considered for additional
grants for FY 1972. 78
In a staff interview, Evans, then a staff assistant in the Office of
Domestic Council, described his role as a “liaison with the Departments
and Agencies” who was mostly concerned with policy rather than spe-
cifics. He did note that he received input from Marumoto and Armen-
dariz, among others, and acknowledged that political considerations
played a role in the awarding of grants. He said, for example, that if a
recommendation concerning an OMBE grant was made by Marumoto,
the application was favored or an explanation given why it was not.
The message went out, “Do something with it.” Evans stated that while
he did not favor funding an unqualified group, he would rely in part
on the “team’s” recommendations and tend to favor qualified groups
who supported the administration over those who did not. Although
he was approached by Armendariz, Marumoto, and Ramirez with sug-
gestions that political contributors be funded, Evans said he never
became involved with specific grants where that occurred.
Another illustration of the input of political influence in the grant-
making process is found in an “Administrative — Confidential” White
House memorandum from Marumoto to Colson and Malek dated May
12, 1972, which reads :
Rodriguez and I met, along with representatives from Bob
Brown’s office and 1701, Under Secretary Lynn and John
Jenkins, Director of OMBE, re funding proposals to Spanish
Speaking and black groups. This is about the third such meet-
ing we’ve had to either approve or disapprove funding pro-
posals from OMBE. We are generating some new proposals
from the SS in key states. 79
75 The term “Brown Mafia” was discontinued following the March 24 report after Malek
wrote Marumoto, “Please drop Brown Mafia title — it would look bad if it ever got out.” Bee
exhibit No. 282-8. 13 Bearings 5543.
77 Exhibit No. 262-8, 13 Hearings 5543. The Select Committee has received no evidence
that such computer capability was actually developed.
78 Exhibit No. 262-9, 13 Hearings 5547.
79 Exhibit No. 262-16, 13 Hearings 5576.
35-687 O - 74 - 26
384
a. Specific Activities To Help Administration Friends
Numerous memoranda obtained by the committee demonstrate that
the Spanish-speaking “team” devoted considerable effort to helping
administration friends seeking Federal moneys. For example, in an
“Administrative — Confidential” report to Colson and Malek, Maru-
moto declared :
Rodriguez met with Carlos Villarreal, Administrator of
UMTA [Urban Mass Transit Administration] , to talk about
setting aside specific moneys for some of our Republican
SS contractors. 80
Another example of interest in aiding Spanish-speaking friends is
found in an April 7, 1972, White House memorandum from Maru-
moto to Colson and Malek which stated :
In the grants area, Rodriguez and I are working on the
following: Reviewing with John Evans, Bob Brown, and
Wally Henley proposals and grants at OMBE to make sure
that the right people are being considered and receiving
grants from OMBE. 81
In several cases, the committee attempted to ascertain the circum-
stances regarding the awarding of particular grants and contracts to
the President’s supporters. The results of these investigations follow :
(1) J. A. Reyes & Associates. — The beneficiary of a number of grants
was Joseph A. Reyes. Mr. Reyes was active in the President’s reelec-
tion effort, particularly regarding fundraising. In fact, Reyes was
chairman of the District of Columbia, Maryland and Virginia section
of the National Hispanic Finance Committee (NHFC), which was
an authorized arm of FCRP formed in 1972 to solicit campaign con-
tributions from Spanish-speaking citizens.
Reyes and his company, J. A. Reyes & Associates, were the sub-
ject of several "White House “Weekly Activity Reports,” forwarded by
Marumoto to Colson and Malek. One such “Administrative — Confiden-
tial” report, dated May 5, 1972, states :
In the grants area, the following transpired : Department
of Transportation : working with UMTA re a $70,000 grant
to J. A. Reyes Associates of Washington, D.C. He is the
chairman of the D.C., Maryland, and Virginia section of the
National Hispanic Finance Committee. 82
Reyes, in a staff interview, stated that he had been in the consult-
ing business for approximately 10 years, and that most of his business
arose from the section 8(a) program of the Small Business Adminis-
tration Act. (The purpose of this act is to assist in the expansion and
development of small business concerns owned and controlled by eligi-
ble disadvantaged persons.) During 1971, Mr. Reyes’ firm grossed be-
tween $400,000 and $500,000 ; in 1972, his firm’s business doubled to $1
million, all of which was under the 8(a) program. According to Reyes,
he received seven or eight contracts and one grant in that year. One
such contract was a $200,000 sole source, noncompetitive agreement
® Exhibit No. 262-16, 13 Bearings 5578.
“ Exhibit No. 262-11, 13 Hearings 5557.
“ Exhibit No. 262-15, 13 Hearings 5572 ; see also exhibit No. 262-16. 13 Hearings 5576.
which Is discussed above. Keyes was one of “our Republican SS contractors” referred to
in that exhibit.
385
with OEO awarded in July 1972. Although acknowledging conversa-
tions with Marumoto and Rodriguez, Reyes denied knowledge of any
efforts by them on his behalf regarding this contract.
In a committee interview, Arnold Baker, former National Project
Manager of Field Operations, Migrant Labor Division, OEO, stated
that the J. A. Reyes contract with OEO was for an evaluation of and
assistance to the emergency food and medical services program and
that the contract was given without the demonstration of a need for
this evaluation as required by OEO regulations. Baker said that suffi-
cient data and expertise regarding this program had been developed
through prior evaluations and it was the unanimous opinion of officials
in the unit responsible for consideration of the Reyes proposal that a
study was not necessary. Over their objections, the contract was
nonetheless awarded.
Baker believes that the award was based solely on political motiva-
tions. He stated that the Project Division had decided not to fund
Reyes’ proposal but, when Peter Mirelez, Director of the Migrant
Division, OEO, received word of this decision, he reversed it. Accord-
ing to Baker, sometime after the contract was awarded it was canceled
due to substandard work. However, Baker reported that it was rein-
stated by James Griffith, Director of the Migrant and Indian Division
of OEO. Baker stated that this contract was “rammed down the
throats” of Department officials, including himself.
The Select Committee also interviewed Dan Cox, a manpower spe-
cialist with the Migrant Division, Department of Labor, who for-
merly was the contract application specialist with the Migrant Divi-
sion of OEO responsible for evaluating the Reyes contract. Cox agreed
with Baker that the contract to evaluate the emergency food and
medical services program was not warranted. It was also Cox’ belief
that J. A. Reyes Associates was not qualified to make the evaluation.
In addition, Cox stated that he was told by Peter Mirelez that that
contract was a “political payoff.”
Mirelez, in an interview, defended the need for the Reyes contract.
Mirelez acknowledged that some of his subordinates had questioned
the qualifications of J. A. Reyes Associates as well as to the efficacy
of its proposal, but Mirelez insisted that his decision was not the result
of political influence. Mirelez denied he told Cox that the contract
was a “political payoff.”
In another interview, James Griffith, now Acting OEO Deputy As-
sistant Director for Operations, denied any political influence in grant
or contract processes at OEO. He did recall, however, certain rumors
as to the lack of necessity for the J. A. Reyes contract, but could not
remember specifics. Griffith also related that a telegram was sent from
the Office of Program Review to Reyes canceling the contract. Griffith
felt this action was not programmatically justified, and thus became
involved in reinstating the contract.
(2) Ultra-Systems, Inc . — Another effort to aid an administration
supporter is revealed in an “Administrative-Confidential” White
House weekly activity report, dated May 19, 1972, from Marumoto to
Colson and Malek :
Rodriguez is assisting Ultrasystems, Inc., of Long Beach,
California with a $200,000 grant from OMBE. This organiza-
tion strongly supports the Administration. 83
83 Exhibit No. 262-17, 13 Hearings. 5581.
386
As in the case of J. A. Reyes & Associates, Ultra-Systems, Inc.,
had strong ties with the National Hispanic Finance Committee. Fer-
nando Oaxaca, vice president of Ultra-Systems, was the NHFC na-
tional treasurer.
The proposed OMBE grant to Ultra-Systems, Inc. was also the
subject of a White House memorandum dated August 8, 1972, from
former White House staffer Nathan Bayer to Armendariz and
Rodriguez.
I spoke with John Jenkins this afternoon concerning the
current status of your priority OMBE proposals.
In the case of AMEX Civil Systems 84 and Ultra Systems,
Inc., John expects to have Requests for Information in their
hands by the first of next week. I strongly advise you to en-
courage them to complete the RFIs as quickly as possible and
return them to Jenkins. He assures me that even in the absence
of their completion, he will have the investigation and se-
curity clearance begun and the audit begun. 85
In a staff interview, Oaxaca denied that there was any quid pro quo
involved in the above grant, which was awarded in October 1972.
Oaxaca stated that he had applied to OMBE for Federal funding in
early spring of 1972. When nothing materialized, he asked Rodriguez,
a longtime friend, if Rodriguez knew anyone at OMBE to whom
Rodriguez could make an inquiry on his behalf. 88
b. Action Against Persons Not Supportive of the Administration
There is evidence that qualified firms that failed to share the ad-
ministration’s political goals and declined to participate in the Presi-
dent’s reelection effort were penalized in their efforts to secure
Government funding.
References to “unfriendly” or pro-Democratic companies and in-
dividuals appeared with some frequency in Marumoto’s weekly re-
ports and in other White House CRP documents. Thus, a June 23,
1972, “Administrative — Confidential” weekly report from Marumoto
to Colson and Malek reads :
Rodriguez working with Nate Bayer of the Domestic Af-
fairs Council reidentifying SS groups who have applied for
federal grants at DOL [Department of Labor] who are un-
friendly toward the Administration. 87
Bayer and Armendariz have both denied to the Select Committee
that cutting off contractors and grantees not supportive of the ad-
84 The owner of Amex Civil Systems, M. Caldera, was a close associate of both
Rodriguez and Marumoto. Rodriguez has maintained a business relationship with Caldera
since leaving the White House.
85 Exhibit No. 262-41, 13 Hearings 5652.
88 Oaxaca was also associated with the Spanish-speaking Business Alliance of Los
Angeles, which was the suhlect of a July 26, 1972. CRP memorandum from Armendariz to
Bayer, on the subject of “OMBE Proposals” (exhibit No. 262-35, 13 Hearings 5633) :
We have received the list of proposed grants to be funded, listed in your
July 24 memo. Two of those listed that appear to be not funded at this point are
highly recommended by this office : Spanish-Speaking Business Alliance, Los An-
geles ; Amex Civil Systems, Lawndale, Calif.
Armendariz testified he knew Oaxaca “to be a reputable person” but, when asked whether
he knew Oaxaca was national treasurer of the National Hispanic Finance Committee,
stated that he was “not sure” and that he “may not have known Tit] at that time.”
(Armendariz executive session, p. 92.)
87 Exhibit No. 262-28, 13 Hearings 5615.
387
ministration was administration policy. But there is evidence that
attempts to excise unfriendly recipients of Federal funds actually
were made. Moreover, both Marumoto and Rodriguez have admitted
that they felt persons opposing the administration should not receive
Government grants.
( 1 ) Development Associates {Leveo Sanchez)
One of the most instructive cases involved Leveo Sanchez, the head
of Development Associates, Inc., a Washington-based consulting firm.
An “Administrative — Confidential” memorandum dated July 19, 1972,
from Marumoto to Rob Davison of the White House staff notes that
Sanchez’ firm had been funded for $1 to $2 million “by our Ad-
ministration.” After referring to Sanchez’ association with Sargent
Shriver and Frank Mankiewicz, the memorandum records that San-
chez’ company had recently received over $900,000 in Government
contracts and was under consideration at DOL and HUD for addi-
tional contracts totaling $100,000. The memorandum continues :
This is a classic example of a firm, not necessarily on our
team, which is making a comfortable living off of us. These
are grants that we’re aware of which indicates [sic] they
may have a few others.
I would recommend if it’s not too late, we stop the pro-
posals at DOL and HUD. 88
Copies of this memorandum went to Armendariz and Rodriguez. >
Five days later, on July 24, 1972, Armendariz wrote a confidential
memorandum to Davison with copies to Marumoto and Rodriguez,
which stated :
We have inquired about Development Associates and have
learned of their close ties with the DNC and Cesar Chavez.
We fully concur with Bill Marumoto’s memo of July 19. 89
The background of these memorandums is informative. According to
Sanchez, in the spring of 1972 he was solicited for a campaign con-
tribution by Joseph Reyes, chairman of the Washington, Maryland,
and Virginia Chapter of the National Hispanic Finance Committee.
(As discussed above, Reyes was the beneficiary of certain grants
and contracts as to which Marumoto intervened.) Reyes, Sanchez
says, told him he was expected to make a $1,000 contribution to the
President’s reelection effort. Sanchez declined.
On July 17, 1972, at the invitation of Marumoto, Sanchez attended
a White House luncheon with Marumoto and David Wimer, now
Deputy Special Assistant to the President and formerly the Special
Assistant to the Assistant Secretary of Labor for Administration and
Management. Sanchez related that during the lunch Marumoto
told him that “thev” had been very good to his firm and that he was
about to be awarded a $400,000 contract from the Department of
Labor. Sanchez said Marumoto then stated that Sanchez and Develop-
ment Associates would be expected to show their appreciation in a
substantial manner in regard to the President’s reelection effort.
Sanchez stated he informed Marumoto and Wimer he knew he would
<* Exhibit No. 262-36, 13 Hearings 5635.
» Exhibit No. 262-36, 13 Hearings 5635-36.
388
not receive a $400,000 labor contract and that Development Associates
had previously received contracts because of its proficiency. Sanchez
said he rejected the request to support the reelection effort and that
Marumoto and Wimer then “implied” possible adverse consequences.
When questioned concerning his meeting with Sanchez, Marumoto
testified :
Dash. Can you, to the best of your recollection, tell the
committee what it was that you discussed with Mr. Sanchez
at that meeting?
Marumoto. If I recall, the other party that was involved in
that meeting at the time was David Wimer, who was Under
Secretary Silberman’s aide in the Department of Labor, who
had the responsibility on the other side — on the Department
side — on this Responsiveness Program. He and I had lunch in
the White House staff dining room and discussed generally
a number of things pertaining to Mr. Sanchez’ operation.
Dash. Who initiated the meeting ?
Marumoto. I believe I did, sir.
Dash. * * * I ask you very specifically whether or not you
were making this recommendation as you show in your memo-
randum because you felt that this was a contractor “who was
living off of us,” and was not supporting the administration
and you were recommending he be cut off for that reason.
Your testimony, as I recall it, was that was the reason that
you wrote the memorandum.
Marumoto. That is correct. 91
Marumoto denied that there was any discussion during the luncheon
concerning contributions and did not recall any exchange regarding
the labor contract. He stated he was not aware of an effort to solicit
contributions from Sanchez at any time. But his testimony continued :
Dash. That was shortly after — just 2 days after that meet-
ing that you wrote this memorandum ?
Marumoto. Right.
Dash. Is there any relationship between this memorandum
written 2 days after that meeting and the meeting?
Marumoto. I am sure there must have been.
Dash. If you are sure there must have been, can you recall
what that relationship may have been or must have been?
Marumoto. I guess it was our impression — not impression,
but our decision, that it appeared, from sources outside of our
meeting, that he was not going to support the administration
so this was a recommendation that we made. 92
David Wimer, in a staff interview, stated that no discussions of
campaign contributions, reelection support, or Government grants or
contracts took place during the luncheon. Wimer further declared
that he was not expecting Sanchez’ presence and does not know why
he was there. According to Wimer, he has never acted to influence a
decision on grants, contracts, or loans for Sanchez or his firm.
01 13 Hearings 5319 .
92 13 Hearings 5320 .
389
Sanchez, however, did experience adverse administration action.
On September 25, 1972, Sanchez’ company was “graduated” from the
SB A 8(a) program. 93 This graduation, which the SB A was “pleased”
to effect and for which Development Associates was “congratulated,”
actually meant that Development Associates could no longer qualify
for preferred status under the provisions of section 8(a) and had to
compete generally with other nondisadvantaged contractors. Not only
does “graduation” from the 8(a) program adversely affect future
grants, but a “graduated” company loses all previously awarded grants
at the close of the fiscal year in which its eligibility ceases. In other
words, “graduation” can have a devastating impact.
Marumoto acknowledged there was a “political input” on the San-
chez decision. He could not recall any other Spanish-speaking “grad-
uates” from the 8(a) program. 94
Subsequent to Development Associates’ “graduation,” efforts to re-
instate the company in the 8(a) program were made by Dan Trevino,
its vice president, who also served on the Texas Spanish-speaking
Committee To Re-Elect the President. Trevino contacted Carlos Conde,
a friend, to arrange for Trevino to meet with Henry Ramirez on this
matter.
Trevino met with Ramirez in Washington shortly after the elec-
tion. At this meeting, according to Trevino, Ramirez stated that
Development Associates had been generally uncooperative in the re-
election effort. Ramirez, Trevino said, gave as examples of an un-
cooperative attitude Sanchez’ refusal to provide campaign printing
at Development Associates’ expense and his failure to make a cam-
paign contribution. Ramirez told Trevino that Development Asso-
ciates lost its 8(a) certification because of this attitude. 95 When Tre-
vino pointed out that he had been active in the President’s reelec-
tion effort, Ramirez suggested that Trevino would have no difficulty
obtaining section 8(a) contracts if he divorced himself from Sanchez.
Ramirez then suggested that Trevino see Rodriguez.
The meeting between Rodriguez and Trevino, as described by Tre-
vino, was quite similar to his meeting with Ramirez. Sanchez was
pictured as uncooperative during the campaign and close to Shriver
and Mankiewicz. Rodriguez indicated that the decision to remove De-
velopment Associates from the 8(a) program was not directed against
Trevino and that he would try to help Trevino in some manner.
Trevino then turned to Peter Mirilez, Director of the Migrant Di-
vision of OEO, with whom Development Associates had a contract
to service migrant workers. Mirilez told Trevino that OEO was satis-
fied with Development Associates’ work on this contract but that he
was getting pressure from the White House to discontinue it. Follow-
ing this conversation, Trevino returned to Texas to await word con-
cerning the result of his efforts.
In January 1973, not having heard from Rodriguez, Trevino had
Conde arrange another appointment with him, this one attended by
Sanchez as well as Trevino. There, Rodriguez informed Trevino and
Sanchez that an OEO migrant contract in which they were interested
93 Exhibit No. 262-53, 13 Hearings 5685.
94 13 Hearings 5292.
05 In a staff interview, Sanchez: confirmed he had been asked to do some printing but
stated that the request was in very general terms and that, as with the request for a
contribution, he refused. Sanchez advised the Select Committee that Trevino contempo-
raneously related the above events to him.
390
was slated to go to Amex, a west coast firm, but that Rodriguez would
try to assist in Development Associates’ reinstatement as a SBA 8 (a)
contractor despite Sanchez’ lack of cooperation.
. The following month, the problem was still not resolved. According
to Trevino, he again contacted Conde to arrange a meeting with Maru-
moto. At this meeting, Trevino said, he began to summarize the prob-
lems facing Development Associates, but Marumoto cut him short,
indicating that he (Marumoto) was well aware of the situation. Tre-
vino said Marumoto stated that recertification was being worked on
and that Rodriguez would be in contact with Trevino. Sanchez, how-
ever, has advised the Select Committee staff that Development Asso-
ciates was never reinstated in the 8(a) program.
Armendariz, testifying in executive session, denied any involvement
in penalizing Sanchez. It will be recalled that Armendariz had writ-
ten Davison that “we fully concur” with Marumoto’s memorandum
to Davison of July 19 which recommended that Sanchez’ proposals
at DOL and HUD be stopped. When questioned concerning his
memorandum, Armendariz stated that when he said “we fully con-
cur” with Marumoto’s memorandum, he meant he concurred only
with the description of Sanchez as having close ties with Demorcatic
leaders and the Democratic party. Armendariz, who received all of
Marumoto’s White House memoranda, testified that taking action
against companies unfriendly to the administration “is just completely
contrary to my ethics in politics.” 96
(2) Activities Respecting Other Nonmpportive Companies
Another instance where a nonsupportive group received White
House attention is illustrated by a May 26, 1972, “Administrative-Con-
fidential” White House memorandum from Marumoto to Colson and
Malek.
Expressed concern to OEO re a $3 million grant to the
Mexican American Unity Council only to find there are some
legal hang-ups to try to cut them off. They promised to at
least monitor the group. 97
Marumoto testified in public session as follows :
Dash. What was the opposition to the Mexican-American
Unity Council ?
Marumoto. I think this was a situation where they had re-
ceived a grant from OEO and before someone realized that
they had a group that weren’t necessarily supportive of the
administration and there was some inquiry of trying to un-
fund them. Upon checking with their general counsel we
found that it could not be done.
Dash. Was there any question as to their qualification?
Marumoto. I don’t recall, sir.
Dash. So the effort to unfund them, really, was based on
your learning that they were nonsupportive ?
Marumoto. Yes, sir. 98
Still another example of the administration’s attitude toward un-
friendly companies is found in a “Confidential” White House memo-
M Armendariz executive session, p. 95.
97 Exhibit No. 262-19, 13 Hearings 5584.
98 13 Hearings 5285.
391
randum dated March 2, 1972, from Marumoto to James Lynn, then
Under Secretary of Commerce, now Secretary of HUD :
In line with our recent discussion regarding NEDA
[National Economic Development Agency] and our com-
ments of “the tail wagging the dog,” I am attaching an edi-
torial written by a NEDA employee opposing the appoint-
ment of Cip Guerra as Deputy Director of OMBE.
This is the latest example of the unwillingness to cooperate
in a “spirit of cooperation” with the Administration. I think
before Commerce signs off on their $2 million grant, you
should sit down with Frank Yiega and explain the facts of
life.
I would appreciate being kept abreast of this highly
important matter."
NEDA was founded by Benjamin Fernandez around 1969 with the
purpose of assisting Spanish-speaking businessmen. Frank Viega
(former President of NEDA) in a staff interview stated that he did,
in fact, meet with J ames Lynn in 1972 and that Lynn informed him
that the White House would like NEDA to help the President. Lynn
allegedly indicated that the White House “knew who their friends
were.” Also present at this meeting was Alfred R. Villalobos, former
NEDA Executive Vice President and Chief Executive Officer J who, in
a staff interview, indicated that Lynn had stressed cooperation with
the administration. Villalobos further stated that, from late 1971 until
October 1972, he received numerous requests from Marumoto and
Armendariz to perform services in relation to the reelection effort.
According to Villalobos, considerable pressure was applied concern-
ing the continuation of NEDA’s Federal grants and contracts. In fact,
Villalobos said, he resigned his NEDA post in October 1972 so that
NEDA would not have difficulty renewing its Commerce Department
grant. 2
c. “ Neutralisation ” of Potential Opponents
There is evidence that the Spanish-speaking re-election “team” acted
to convince potential opponents of the President’s re-election effort that
they were in line for substantial Government funding, _ when, in fact,
there was no intention to make such an award. The subject of one such
effort was the Southwest Council of LaRaza, a Spanish-speaking group
based in Tucson, Ariz. A June 9, 1972, “Administrative-Confidential”
White House memorandum from Marumoto to Colson and Malek
states :
Rodriguez working to obtain $30,000 for the Southwest
Council of LaRaza for a conference next month. This is the
group we want to neutralize. 3
Apparently, this $30,000 grant was made as a showing of good faith
by the administration. On June 23, 1972, a White House memorandum
“ Exhibit No. 262—5, 13 Hearings 5535.
1 According to Fernandez, who was chairman of the National Hispanic Finance Com-
mittee during the 1972 campaign, he was removed as president by ^Villalobos in a “coup
d'etat.” Fernandez has denied any knowledge of the facts set forth in the March 2 memo-
randum. (13 Hearings 5400-01. ) . ■
2 Villalobos became a consultant to NEDA after leaving its employ. According to his
successor, Arthur Negrete, Marumoto at a later date called him and said the White
House wanted Villalobos fired. In fact, there was a defect in the procedure by which
Villalobos was annointed and his consulting contract was terminated.
3 Exhibit No. 262-24, 13 Hearings 5601.
392
notes that the $30,000 grant had been obtained from DOL and that
Rodriguez was still working with the Southwest Council of LaRaza. 4
On J une 29, 1972, David L. Wimer, Special Assistant to the Assistant
Secretary of Labor for Administration and Management, wrote
Richard Wise an assistant to the Under Secretary of Labor :
In seeking to create in key States an appropriate atmos-
phere for the re-election of the President, OASA has taken
initial steps as follows :
1. Obtainment of $30,000 grant from Manpower Admin-
istration to support National Conference of Southwest Coun-
cil of LaRaza. This is a beginning effort to de-politicize this
g rass roots group representing a minimum of seven States,
onference to be held in Washington, D.C., last part of July.'
On the face of things, more substantial Government grants were in
store for the Southwest Council of LaRaza. On August 18, 1972,
Marumoto noted in a report to Colson and Malek that he and Rob
Davison were working to obtain funding of a $6 million HUD pro-
posal submitted by the Southwest Council. 6 In addition, the Southwest
Council was being considered for OMBE grant. 7 The council did, in
fact, appear well qualified. On August 8, 1972, Nathan Bayer wrote
Marumoto and Armendariz :
I Spoke with John Jenkins this afternoon concerning the
current status of your priority OMBE proposals.
Tn the case of the Southwest Council of Laraza, John met
with them this morning and spoke with them for about two
hours. John is very impressed with this group and says that
he would have no difficulty in funding them. He awaits your
signal on this matter. 76
The signal never came. In fact, the evidence suggests that there
was no intention to grant the Southwest Council of LaRaza $6 million
or anywhere near that sum. Rather, it appears that the Spanish-
speaking “team” intended to neutralize this potentially hostile group
by holding out the promise of substantial Federal funding. The fof-
lowing is from Marumoto’s public testimony :
Dash. Now, were you aware of an organization called the
Southwest Council of LaRaza ?
Marumoto. Yes, sir.
Dash. Did you engage in any discussions with them con-
cerning any grants ?
Marumoto. Yes.
Dash. Could you tell us what discussions you had with
them ?
Marumoto. The Southwest Council of LaRaza is an active
Democratic group that I believe was founded in Arizona and
now is expanded into the Southwest States.
Dash. Were they supportive of the administration?
Marumoto. Well, in some discussion that some of our peo-
ple had from the campaign staff as well as our staff, there was
1 Exhibit No. 262-28. 13 Hearings 5614.
6 Exhibit No. 14, 19 Hearings 8797.
8 Exhibit No. 262-45, 13 Hearings 5668.
7 Exhibit No. 262-41, 13 Hearings 5652.
7 * Exhibit No. 262-41, 13 Hearings 5652.
393
some discussion about them supporting the President. They,
in turn, said they would, provided they could get some Fed-
eral contracts.
Dash. Did you discuss any particular Federal contracts
with them ?
Marumoto. I believe there were some discussions — I had
only one meeting with them, if you recall, and the others
picked up on it. I think what finally happened was that
the Committee To Re-Elect, the Spanish-speaking division,
recommended a strategy for working with them that they
be funded for $30,000 for a national conference they wanted
to hold.
Dash. What were they actually looking for — what kind of
grant ?
Marumoto. I believe they were looking for either two or
three grants at maybe two or three different departments or
agencies.
Dash. That amounted to approximately how much?
Marumoto. I am sure of six figures, I do not know.
Dash. Sums about $400,000 ? [sic]
Marumoto. It could be more; I do not know the exact
figure.
Dash. What was being offered to them at that time or sug-
gested was $30,000 for a conference ?
Marumoto. Right, with consideration for assistance in a
few months.
Dash. Mr. Marumoto, do you recall discussions we had
yesterday, concerning this particular organization and your
statement to us, that at no time did you believe they were
going to get any grant, but that you were in a sense engag-
ing with them in what has been known as a stroking session ?
Marumoto. We were neutralizing them.
Dash. You were neutralizing them ?
Marumoto. Yes, sir.
Dash. And by holding them at bay, not giving them a
grant, but discussing the possibility of a $30,000 conference
grant, this sort of at least held them away from being an
opponent if thev were not going to be supportive ?
Marumoto. That is right. 8
d. Malek's Comments on Grant Making Activity as to
Spanish- Speaking Constituents
Malek, when questioned concerning the grant and contract ac-
tivities just described, testified that, “I do not believe I knew they
(Marumoto and Armendariz) were participating in the review of
minority business enterprise grants.” 9 When confronted with copies
of the numerous documents sent to him decribing such activity. Malek
stated that he is not certain he read the memorandums. He added that
he was occupied on many matters and that reading an activity report,
which did not require action on his part, had low priority. He said
that, if he had read the passages in question, he would have interpreted
8 13 Hearings 5320 - 21 .
9 18 Hearings 8246 .
394
them as evidencing cooperation with Spanish-speaking groups “to
help them develop the skills with which to apply for grants * * * on
a substantive basis.” 10 Malek also stated that, in his opinion, it was
improper for campaign officials to have “sign-off” powers respecting
Government grants and contracts. 11 He said it was inappropriate to
deny funding to responsible organizations simply because they were
not supportive of the administration. 12
3. CABINET COMMITTEE ON OPPORTUNITIES FOR SPANISH-SPEAKING
PEOPLE AND THE MEDIA EFFORT
a. The Cabinet Committee
The Cabinet committee, during 1972, was composed of 11 members
chosen from the President’s Cabinet and high-level non-Cabinet posts.
It had a staff of 35, mostly of Spanish- American descent. As de-
scribed in a fact sheet, apparently prepared by that committee : 13
The Cabinet Committee on Opportunities for Spanish
Speaking People is primarily a vehicle for carrying out the
President’s program for Spanish-Speaking Americans.
Signed into law on December 30, 1969, by President Nixon,
the Committee is to assure that Federal programs are reach-
ing all Spanish-speaking people, provide technical assist-
ance, and identify new programs which will benefit Span-
ish-speaking communities. An independent office in the
Executive Branch of the Government, the Cabinet Committee
is responsible to Congress through the President.
While there was some ambiguity in 1972 whether the chairman of
the committee — Henry Ramirez during the 1972 campaign — was sub-
ject to the provisions of the Hatch Act, 14 the balance of the staff clearly
was. Nonetheless, there is evidence that the Cabinet committee’s staff
became directly involved in the 1972 campaign. For example, a docu-
ment prepared by Armendariz contains the following statement:
The Cabinet Committee on Opportunities for Spanish
Speaking People will provide research and staff support to
the White House Task Force for all phases of the campaign
effort. In addition, its chairman, Henry Ramirez, should be
a powerful recruiter of Spanish-Speaking support. 15
Whether this document, addressed to Robert Marik who was in
charge of planning and research at CRP, reached higher officials in
the campaign or Government is not known. However, an unsigned
“Confidential” memorandum entitled “Interest Group Reports” on
CRP stationery dated December 16, 1971, and addressed to Attorney
General Mitchell, 16 stated :
The [Spanish-speaking] report makes detailed recommen-
dations for highly visual social and economic development
10 18 Hearings 8248—49.
11 18 Hearings 8249.
12 18 Hearings 8252.
!® m? e factsheet was found in CRP files. It is included in exhibit No. 9, 19 Hearings 8683.
™h e factsheet just referenced declares that the chairman was exempt from the
provisions of the Hatch Act. A congressional committee with oversight responsibility in
regard to the Cabinet committee has recently concluded otherwise. See report, Committee
on Government Operations, House of Representatives, Sept. 25, 1973.
ls Armendariz executive session, exhibit No. 2, p. 24.
M Attorney General Mitchell was, at that time, a member of the Cabinet committee.
395
projects and for publicizing the same. It suggests heavy ex-
ploitation of the Cabinet Committee on Opportunity for
Spanish-speaking peoples which is now closely allied with
Colson’s shop and Bill Marumoto on political and public re-
lations questions. 17
On January 4, 1972, Jeb Magruder sent a memorandum to Attorney
General Mitchell that declared :
Central to all our efforts [in the Spanish-speaking area]
should be full politicization of the Cabinet Committee, now
on an $800,000 budget and going up to $1.3 million in July.
The group now works through Finch, but Colson has begun
assisting on the political and P.R. side. Carlos Conde, a
Spanish press type, has been put on the Committee’s payroll
and will be working out of the White House in cultivating
Spanish media, much as Stan Scott does for black media. 18
Further activity by Conde is described in an “Administrative — Con-
fidential” Marumoto memorandum to Colson and Malek dated July
28, 1972, that states :
Conde completed the updating and checking for accuracy
on the Administration Achievement list. The pertinent de-
partments reviewed it, updated it and signed off on their sec-
tion as being factually accurate. Sent copy to Marumoto for
rapid approval by Domestic Council and then to Armendariz
for insertion in Speaker’s kit. 19
b. The Media Plan
There is evidence that the Cabinet Committee’s media resources
were used extensively for campaign purposes and that the committee
media operation was reorganized with the specific purpose of improv-
ing its performance in this regard. This activity is described in a
memorandum from Carlos Conde to seven White House and campaign
officials, including Colson, Malek, Ramirez, and Armendariz, dated
May 31, 1972, and entitled, “Spanish Speaking Task Force Media
Team” :
The campaign to re-elect the President is to present his
record and his Administration as second to none. The best
way to do this is through an effective communications plan
that highlights his record in all of the public sectors. The
development of the best possible bi-lingual communications
network is essential to the success of the overall plan.
The Spanish speaking media plan developed by this office
is now underway, but it has become increasingly apparent in
the past several weeks, however, that the Spanish speaking
division of the Committee to Re-Elect the President will re-
quire more support than the plan originally envisioned.
* * * This situation has forced Armendariz to depend
frequently on this office and on the Cabinet Committee for
17 Exhibit No. 262-3, 13 Hearings 5534.
18 Exhibit No. 15, 19 Hearings 8813. Carlos Conde was employed by the Cabinet Committee
from February 20. 1972. to April 29. 1978. and was on detail to the White House Com-
munications Office under Herbert Klein. It appears that the White House paid Conde’s
salary from July 1. 1972, until he left his position.
10 Exhibit No. 262-38, 13 Hearings 5646.
396
staff support * * * [T]he Cabinet Committee’s public in-
formation office, though integrated to the Spanish speaking
campaign plan, has not fulfilled its function well because its
staff requires broader journeyman experience. 20
The memorandum presented two alternatives, the second of which —
the one favored — was to revamp the existing media structures within
the Cabinet Committee and other groups to support the campaign.
Apparently the reorganization was already well underway. A memo-
randum from Marumoto to Colson and Malek dated April 28, 1972,
stated:
For the past two weeks Conde has been spending consider-
able time with the Cabinet Committee’s public information
section putting a reorganization plan into effect and helping
implement some projects that came from the reorganization. 21
On June 2, 1972, Marumoto wrote Colson and Malek that Conde
was meeting with Ramirez and another official of the Cabinet Com-
mittee concerning “a revamping in personnel in order to give better
support to Alex at 1701.” 22
Part of the effort to gain additional help for the campaign effort
involved the use of Diana Lozano, a Cabinet Committee employee
until July 12, 1972. In April and May of 1972, Lozano worked on a
number of re-election media projects. 23 The May 31 Conde memo-
randum notes :
Assisting part time is researcher- writer Diana Lozano of
the Cabinet Committee, who also does special assignments for
Chairman Henry Ramirez and Alex Armendariz. 24
The memorandum also argues the need for a researcher- writer on
Spanish-speaking topics and states that Lozano was willing to take
leave of absence from the Cabinet Committee to join CRP. On his
copy of the memorandum, Malek wrote: “Let her work from where
she is— -no way she can be added.” 25 Moreover, in a memorandum to
Conde dated June 5, 1972, Malek stated :
If, however, Alex can still demonstrate the need for Miss
Lozano’s help, we can arrange for her to remain at the Cabinet
Committee but spend part of her time supporting our ac-
tivities. 26
But 2 days later steps were taken to put Lozano on the staff of the
Committee To Re-Elect the President where she officially started work-
ing on July 12, 1972. When questioned concerning the use of Lozano in
the campaign before she joined CRP, Malek, in executive session,
stated he did not know she was covered by the Hatch Act. 27
Armendariz testified in executive session that he never requested
“support” from the Cabinet Committee. When shown documentary
evidence 28 that he had asked the Cabinet Committee to send him daily
20 Exhibit No. 262-22, 13 Hearings 5595.
» Exhibit No. 262-14, 13 Hearings 5569.
22 Exhibit No. 262-21, 13 Hearings 5591.
23 Exhibit No. 262-14, 13 Hearings 5569 ; Exhibit No. 262-19, 13 Hearings 5587.
24 Id. at 5596.
25 Id. at 5596.
2 6 Id. at 5593.
27 18 Hearings 8256.
28 Exhibit No. 16, 19 Hearings 8819.
397
news clippings and to translate certain campaign material, lie stated
that these matters were nothing more than requests for “information”
from the Cabinet Committee. 29
c. Hoy
The Cabinet Committee published a minority-oriented newspaper
called Hoy, which apparently was used in the reelection effort. 30 There
are a number of memorandums from Armendariz or Malek to Ramirez
suggesting how Hoy could further campaign goals. An example is a
memorandum from Armendariz to Ramirez dated May 11, 1972, which
reads :
Your committee’s image should be positive and show
power — not civil rights. The picture on the first page is bad
news ; all three individuals, non-Spanish-speaking, are minor-
ity advocates — not a positive Spanish-speaking picture in my
opinion. Don’t build others, just the President-— ZD's record
with the Spanish-speaking. [Emphasis in original.] 31
Another apparent attempt to use “Hoy” for political purposes con-
cerned Mayor John V. Lindsay of New York, who, in 1971, switched
to the Democratic Party and then unsuccessfully ran for President.
Attaching a May 14, 1972, newspaper article describing Lindsay’s cut
of funds from a bilingual education program, Armendariz, on June 7,
1972, wrote Ramirez, “How about taking a slap at Lindsay?” 32 In
response to a staff inquiry concerning this request, Ramirez stated
that he complied with Armendariz’ requests when he wanted to com-
ply. He said he may have issued a release on his own initiative criti-
cizing Lindsay as he similarly issued releases criticizing other officials
and agencies.
4. OTHER EFFORTS BY THE SPANISH-SPEAKING TASK FORCE TO PROMOTE
THE PRESIDENT’S REELECTION
a. La Raza Unida Matter
A significant matter uncovered by the Select Committee was an ap-
parent effort to pay La Raza Unida, a Texas-based Mexican- American
political party, to take a neutral stand in the 1972 Presidential cam-
paign rather than endorse the candidacy of Senator McGovern, as was
anticipated. The first surfacing of this scheme appears in a pair of
memorandums on CRP stationery addressed to Attorney General J ohn
N. Mitchell, one dated December 16, 1971, designated “Confidential”
and entitled “Interest Group Reports,” 33 and a similar memorandum
dated January 4, 1972, from Magruder to Mitchell. 34 These documents
concerned various interest-group reports compiled by Bart Porter and
the staff of Charles Colson. The December 4 document notes that the
28 Armendariz executive session, pp. 120-6. _ .
3,1 Armendariz’ Spanish-speaking campaign plan (exhibit No. 13, 19 Hearings 8754,
8796) indicates that the '‘CCSS newsletter” would be used In the campaign to publicize
the President’s record and concern for the Spanish-speaking. Ramirez, however, stated
that the editor of Hoy worked on the McGovern campaign.
31 This memorandum concerned the third issue of Hoy,
32 Exhibit No. 17-A. 19 Hearings 8835—36.
33 Exhibit No. 262-3, 13 Hearings 5533.
34 Exhibit No. 15, 19 Hearings 8813.
398
Porter/Colson Spanish-speaking report “advocates consideration of
undercover funding of La Baza Unida, a splinter party, in exchange
for an agreement that La Baza Unida runs Presidential candidates
in California and Texas.” And the January 4 document states :
Perhaps the most interesting suggestion the report makes
is that consideration be given to under-cover funding of La
Baza Unida, a left-wing Chicano political party in the South-
west, in exchange for agreement that La Baza Unida run 1972
presidential candidates in California and Texas. La Baza
Unida has done very well in several state and local elections
in California, New Mexico, and Texas.
Subsequent memorandums reflect serious consideration of activity
of this type. On J une 26, 1972, Armendariz wrote :
Met with Jose Angel Gutierrez, La Baza Unida leader
from Texas, for a “get acquainted” session; discussed La
Baza Unida’s plans and the effect La Baza Unida Party is
having on the President’s campaign. Will continue negotia-
tions with Gutierrez. 35
A September 8, 1972, CBP memorandum from Armendariz to
Malek, the subject of which is “The Baza Unida Party National Con-
vention,” states :
The issue of an $8,000 contribution for Muniz’ campaign
from the Bepublican party was brought up in a meeting off
the convention floor. A promise was made to publicly con-
demn McGovern if such a donation were made. 36
Malek responded to this suggestion by writing on the top margin of
the September 8 memorandum :
Do you think we should do this ? I am doubtful — how could
GOP contribute to a rival candidate ? In addition, it seems too
cheap— Baza Unida’s principles should be worth more than
that — Fred. 37
However, the matter apparently did not die there. Less than 1
week later, on September 14, 1972, Armendariz sent a “Confidential”
memorandum to Colson (copy to Marumoto) which relates:
In a private meeting several weeks ago, Gutierrez ap-
proached this office for a quiet Bepublican contribution to La
Baza Unida. A promise was made to publicly condemn Mc-
Govern if such a donation were made. This possibility is still
under consideration on the grounds that an effort to main-
tain the neutrality of La Baza Unida is to our advantage.
The contribution would be used for the campaign of Bam-
sey Muniz, Baza Unida Candidate for Governor of Texas,
who won a strong endorsement from the convention. The
highest ranking Baza Unida Candidate, Muniz is an attorney
and distinguished high school and college football player. lie
has a clean image, a professional appeal with no record of
35 Malek was the recipient of this communication.
38 Exhibit No. 262-50, 13 Hearings 5677.
s? IUd.
399
militancy, and apparently has the enthusiastic support of the
party.
The dangers of such a move arouse question as to whether
the end will justify the means. Such a contribution would be
certain to annoy Texas Republicans as well as Connally
Democrats supporting the President. Furthermore, Raza
Unida may have no alternate recourse anyway, which would
give us no reason for sticking our necks out. In any event,
it is obvious that any contribution should not come from the
Committee for the Re-Election of the President, but from an
independent third source. 38
On October 30, 1972, in regard to his dealings with La Raza Unida,
Armendariz wrote Marumoto, “Please be assured that so far every-
thing went as expected.” 39 Armendariz noted that La Raza con-
sidered both parties “untrustworthy.” He commented that their aim
was not an endorsement of the President by La Raza which was “un-
realistic, unnecessary, and unwise to expect” — but “to disassociate it
from the Democratic Party for which its members have voted unani-
mously for decades * * *. The purpose of disassociation is to elicit
criticism of McGovern.” A copy of this memorandum went to Malek.
Meanwhile, the Spanish-speaking team was apparently attempt-
ing to secure the neutrality of La Raza Unida by utilizing the grant
process. Involved was a $391,206 OEO grant to the Zavala County
Health Association which Texas Gov. Preston Smith had vetoed on
July 27, 1972. An October 9, 1972, CRP memorandum from Ar-
mendariz to Malek 40 states that “it is important for political reasons”
that the administration override the veto. As Armendariz explained :
Should the poll gap tighten in Texas, the neutrality of La
Raza Unida will be important. Our studies indicate that there
is 70 percent approval of Raza Unida among Mexican Ameri-
cans in Texas. The fact that there are about 1 million political
Mexican American voters in Texas and that Humphrey won
that state in 1968 by only 38,000 votes, substantiate the pos-
sible importance of La Raza Unida neutrality in this election.
We have no way of publicly supporting this group without
antagonizing Republicans and making La Raza Unida look
as though they had sold out. At the same time, neither do we
want to antagonize Raza Unida supporters and drive them
back to their old position as Democrat voters. The Zavala
County grant provides us with an opportunity to support
the party indirectly in a positive and legitimate manner. Such
an action is likely to strengthen their position of neutrality
which is so politically beneficial to us.
On November 2, 1972, Armendariz wrote a confidential memoran-
dum to White House aide Kenneth Cole, again stressing the impor-
tance of keeping La Raza Unida neutral through election day and
explaining that La Raza Unida would become “more conciliatory” if
certain specified programs — in addition to the Zavala County grant—
“could be sprung loose within the next few days.” 41
38 Exhibit No. 262-51, 13 Hearings 5679-80.
89 Exhibit No. 262-50, 13 Hearings 5678.
40 Malek exhibit No. 22, 18 Hearings 8405.
41 Exhibit No. 262-62, 13 Hearings 5697.
400
In his November 14, 1972, campaign report, 42 Armendariz, indicat-
ing satisfaction with the role played by La Eaza Unida, stated :
As the Raza Unida convention endorsed no candidate for
President, it was clearly to the advantage of the GOP to
attempt to maintain the neutrality of this group. A Zavala
County health grant became a controversial issue despite the
fact that this Administration overrode the veto of Governor
Smith. To placate irate Raza Unida leaders, overtures were
made to assist them by expressing interest in grants of in-
terest to them.
When questioned in executive session concerning his role in this
episode, Armendariz claimed that at no time did he approve
payment of $8,000 to La Raza Unida in exchange for their neutrality
and that his memorandums should not be construed in this manner. He
portrayed his role as only a conduit for information. Armendariz
said he had no knowledge that any campaign contribution to La Raza
Unida was actually made. 43
b. Reies Lopez Tijerina Matter
On August 29, 1972, Henry Ramirez sent a memorandum to Armen-
dariz on Cabinet committee stationery attaching a letter to Ramirez
from Reies Lopez Tijerina, who was then on parole following his
conviction for assaulting Government officials during a demonstra-
tion in New Mexico. Ramirez’ memorandum states :
Please see attached letter with specific reference to the
third paragraph. Mr. Tijerina indicated that he would work
for us in return for due considerations.
I await your recommendations, if you want me to move on
this matter. 44
The Tijerina letter (dated August 14, 1972) reads in part :
I’m very glad that I got to know you. I also want it very
clear that I am very thankful for what you mentioned to me
in your office concerning my probation, parole, and the pos-
sibility of a full Executive pardon. As I said it before while
I was in your office, I want to repeat in writing most of the
Spanish-speaking people in the United States would feel
grateful if an Executive pardon would be granted.
In the meantime I want to offer my service or contribution,
without reservation, to your service, all the Spanish-speaking
people and to harmony between our people and all others in
the United States. Please do not hesitate to call me anytime
for any service. 45
On the bottom of Ramirez’ memorandum, Armendariz made the
following handwritten notation: “HR talk to Lujan call 9-6-72.”
Armendariz testified that he took no action concerning the proposal
but told Ramirez to call Congressman Manuel Lujan, Jr., concerning
the problem. 46 Ramirez stated in a staff interview that he believed
« Exhibit No. 13, 19 Hearings 8T74.
43 Armendariz executive session, pp. 108-9, 115.
44 Armendariz executive session, exhibit No. 24. p. 137.
45 Armendariz executive session, exhibit No. 24, p. 137.
46 Armendariz executive session, p. 140.
401
the Tijerina case should have been reviewed and that he sent the
memorandum to Armendariz because he was a. good “contact man”
who could bring the problem to the attention of the right people.
Ramirez claims his help was not conditioned upon campaign support.
Armendariz and Ramirez stated that the Tijerina matter was not
pursued further. Congressman Lujan, when contacted by the commit-
tee, said he could not recall discussing Tijerina with Armendariz
or Ramirez.
c. Alfred Hernandez Matter
Alfred Hernandez was head of the Spanish-speaking Democrats
for Nixon effort. Evidence developed by the Select Committee suggests
that, while negotiations were underway to gain his support for the
reelection effort, there were also discussions with him as to his interest
in a Federal position, particularly a Federal judgeship. While all
participants deny a quid pro quo arrangement, various memorandums
and documents reflect the relationship between support and appoint-
ment.
A May 26, 1972, “Administrative-Confidential” White House
memorandum from Marumoto to Colson and Malek reads : 47
Conde traveled to Houston with Armendariz to meet with
an influential Mexican American democrat who is thinking
of supporting the President in November. Alex is to continue
the discussions with him and work out the scenario if he comes
aboard. 48
On June 8, 1972, Armendariz wrote a memorandum (recipient not
indicated) regarding Hernandez. After describing Hernandez’ Demo-
cratic credentials, the memorandum continues:
Impressed with the President’s record in assisting Spanish-
speaking and disenchanted with a lack of recognition from
Democrats, Mr. Hernandez is considering taking action in
public support of the President * * * Mr. Hernandez has
hopes that this move will bring him better recognition than
he has received from Democrats. 49
The following day, June 9, Armendariz, Conde, and Marumoto met
with Hernandez regarding his potential support of the President.
Then, on June 12, Marumoto wrote Hernandez a letter:
It was good to have seen you again and particularly to hear
of your interest in supporting the re-election of the President.
I want to emphasize that if you implement your plans as
we discussed, the President will adequately recognize you. 50
Finally, a memorandum dated August 18, 1972, from Marumoto to
John Clarke reads :
If any vacancies come up for the federal bench in Texas,
1701 and our operation would like to see Judge Hernandez
appointed.
He is a Democrat who is presently heading the Spanish
speaking Democrats for the President and is a three-time
17 Exhibit No. 262-19, 13 Hearings 5583-87.
48 Exhibit No. 262-19, 13 Hearings 5586.
49 Exhibit No. 262-44. 13 Hearings 5665.
50 Exhibit No. 262-44, 13 Hearings 5664.
402
past national president of LULAC, the largest Chicano serv-
ice organization in the country.
It would be a real coup if we could appoint him. 51
The propriety of the handling of the Hernandez matter was pur-
sued by Senator Talmadge in his questioning of Marumoto:
Talmadge. Were you not aware of the provision of title
18, section 600, of the United States Code that makes it a
crime to promise Federal employment or other benefits under
consideration for political support for a candidate or political
party ?
Marumoto. Yes, sir.
Talmadge. Isn’t that the indication of these documents that
I have just shown you ?
Marumoto. One moment, sir.
I would like to reemphasize that there was no promise or
no offer whatsoever to Judge Hernandez about a Federal
judgeship.
Talmadge. The letters speak for themselves. But I under-
stood that you made a specific pledge that he would be appro-
priately recognized.
Marumoto. That is right.
Talmadge. And shortly thereafter, you recommended him
for a Federal judgeship . 52
In fact, Hernandez Was not offered a Federal judgeship after the
election. He was, however, offered a commissionship on the Consumer
Safety Products Commission, which he declined.
d. Ed Pena Matter
The evidence before the committee indicates that certain adminis-
tration and campaign officials sought to discharge Ed Pena, Director
of Compliance, Equal Employment Opportunity Commission, for
favoring Democratic candidates. On May 19, 1972, Marumoto wrote
an “Administrative — Confidential” memorandum to Colson and
Malek, 53 which reads :
Working with Kingsley, Ramirez and Rodriguez re the
dismissal of Ed Pena, Director of Compliance at EEOC. 54
Two weeks later, on June 2, 1972, in a similar memorandum, Maru-
moto wrote :
Continuing to work on the following vacancies :
Developing a case re Ed Pena, Director of Compliance at
EEOC (GS-17) who has been violating the Hatch Act. 55
Then, on August 25, 1972, Pena became the subject of an entire
“Confidential” memorandum from CRP staffer David E. Florence
to Armendariz, which dealt with Pena’s activities at a convention of
the supposedly nonpartisan LULAC Supreme Council. 56 Pena was
“ Exhibit No. 262-44, 18 Hearings 5663.
62 13 Hearings 5318.
M Exhibit No. 262-17. 13 Hearings 5579-82.
54 LULAC stands for League of United Latin American Citizens. Pena is the individual
who recommended that EEOC investigate the University of Texas, an action described as
potentially “disastrous ’ in a White House memorandum. See section V.C.l, infra .
56 Exhibit No. 262-21, 13 Bearings 5588.
60 Marumoto described LULAC as “the largest Mexican-Ameriean Association, called the
Elite of the United Mexican-American Citizens/' (13 Hearings 5293).
403
accused therein of “attempting to undermine our efforts.” The memo-
randum continued :
Later, Pete Villa commented, to me, that Ed Pena thought
LULAC was getting too Republican and that he, Ed, wanted
LULAC to invite Shriver to the October Supreme Council
meeting in Washington.
It is my belief that one of the reasons Pete Villa, and Ro-
berto Ornelas follow Ed Pena around and speak up for him
is so that they will be in “thick” with the McGovern admin-
istration if McGovern is elected President.
It is my belief that it would be wise to terminate Ed Pena
from his position as a GS-18 at EEOC. 57
When questioned at public hearings concerning Pena, Marumoto
testified as follows:
Montoya. Tell me about Ed Pena, why were some people
anxious to get him fired?
Marumoto. He was just vocally expressing antiadminis-
tration sentiments.
Montoya. Did the White House have a policy of doing that
to every employee in the Government who was against the
President ?
Marumoto. No, sir.
Montoya. Why did you pick on Mr. Pena?
Marumoto. I guess he was the most visible.
* % iji ❖ *
Montoya. Was there anything different from what Mr.
Pena was doing than from what various persons were doing
who were working in similar positions who may have been
Republicans ?
Marumoto. I don’t think so. 58
Mr. Pena, in fact, retained his position.
e. Request for a Demonstration
The evidence presented to the committee indicates that, in one
instance, Marumoto asked an official of a Federal grantee — NED A — to
supply people to stage a demonstration in support of the mining of
Haiphong Harbor in front of the offices of the Los Angeles Times.
Marumoto testified as follows:
Dash. Who was Mr. Alfred Villalobos?
Marumoto. He was at that time the executive vice presi-
dent of that organization [NED A].
Dash. Did you ever ask him to stage a phony demonstration
in front of the Los Angeles Times office?
Marumoto. Yes, sir. I don’t know if I agree with the term
“phony.”
Dash. What term would you use?
Marumoto. I was asked, on that particular occasion by Mr.
Colson, when the Los Angeles Times came out with an anti-
administration editorial, I believe — I can’t recall the par-
67 Exhibit No. 262^7. 13 Hearings 5669.
68 13 Hearings 5294, 5303-5304.
404
ticular subject, but we had asked if Mr. Villalobos would
organize a group to demonstrate in front of the Los Angeles
Times.
Dash. Did you receive cooperation in that request?
Martjmoto. I think after a couple of days, he called back
and said he just could not do it . 59
In a staff interview, Villalobos indicated he did not think Maru-
moto’s request proper and therefore decided not to honor it.
/. Holding Back Census Data
In one instance, the campaign team unsuccessfully attempted to
delay the release of information by the Census Bureau which was
considered detrimental to the reelection effort. An “Administrative-
Confidential” White House memorandum from Marumoto to Colson
and Malek, dated July 7, 1972, relates:
Conde discussed with Census Bureau the upcoming social
and economic report on the SS. The report will show that the
SS are doing better by comparison than the Blacks and the
question is whether the report should show the comparison.
It will have a SS-Anglo comparison which [of] course will
show the Whites in a dominant position. The representative
also talked to Des Barker on this. Conde discussed this with
Alex Armendariz of 1701 and the inclination is not to show
SS-Black comparisons. Report is due out July 20 and Conde
will look over the figures with the Census representative and
determine if other than Census media dissemination is war-
ranted. 60
A July 12, 1972 CRP document from Armendariz to Marumoto
entitled, “Selected Characteristics of Persons and Families of Mexi-
can, Puerto Rican, and other Spanish Origin: March, 1972” reads:
We have reviewed Mr. Joseph R. Wright, Jr.’s memo to
Mr. Desmond Barker on the subject matter and offer our
views on the subject, hoping some action can be taken to stop
publication for the reasons mentioned below.
. . . Our 'position is that any statistical data which show the
Spanish-Speaking community lagging behind other elements
of the population will he construed as the fault of the incum-
bent governments [Emphasis in original.]
Two days later, Marumoto, in a July 14, 1972, White House “Ad-
ministrative-Confidential” memorandum, wrote Colson and Malek
that:
Armendariz and I reviewed Census material oh the SS that
is to be released soon. Recommended some information be
held back. 62
Marumoto in public testimony confirmed that an attempt was made
to restrain publication of census data that might have had an adverse
58 1.3 Hearings 5280.
80 Exhibit No. 202-32, 13 Hearings 5626.
81 Exhibit No. 262-34, 13 Hearings 5627.
82 Exhibit No. 262-35. 13 Hearings 5632.
405
political impact in the Spanish-speaking community. 63 However, in
a committee interview, Desmond Barker of the Census Bureau said
he recalled no contact from White House or campaign officials con-
cerning this data. He stated that the information concerned was not
held back but released.
B. Activities Respecting Black Constituents
While activities of a responsiveness nature in pursuit of black
votes appear not as numerous as those regarding the Spanish
speaking, documents obtained by the Select Committee indicate that
there were nonetheless certain efforts in this area. Several examples
follow.
1. .T A ME S FARMER MATTER
On April 18, 1972, Paul Jones of CRP wrote a “Confidential”
memorandum to Malek entitled “Meeting with James Farmer” 64 that
stated, in full text :
In the Brown- Jones meeting with James Farmer, the
following points of interest were discussed :
1. Farmer’s willingness to work in support of the President.
(It was agreed he might better serve at this time by main-
taining a non-partisan posture.) Jim expects to build on
the attitude coming out of Gary.
2. His speaking engagements (he is to send a list of his
engagements). We will seek to arrange media interviews in
connection with his key appearances.
3. Farmer’s interest in funding for his think tank proposal.
He’s seeking $200,000 seed money from HEW. (This should
be moved on but should allow for a final Brown-Jones check-
off in order to re-inforce Farmer’s involvement. Addi-
tionally, there is some need that the think tank initially focus
on key issues of interest to Black voters. 65
On April 28, Frank Herringer submitted to Malek a “Confidential”
talking paper for use in briefing John Mitchell on the basic tenets
of the Responsiveness Program. This document — which, as Malek
at his executive session testified, fairly represented the briefing given
Mitchell 66 — contained the following statement :
Paul Jones wants favorable action on an HEW grant for
James Farmer that would enable Farmer to have time to
speak in support of the re-election.
Mr. Farmer did receive a $150,000 HEW grant as the communications
from that Department, found at exhibit No. 18 67 indicate.
Jones, in his executive session before the committee, denied that he
had any “check-off” powers relating to the F armer grant or any other
governmental grant. (A question, of course, remains as to the pro-
priety of this CRP official participating in governmental grant proc-
esses.) Although Jones admitted in executive session that certain
officials — for example, Brown — were attempting to influence Federal
83 13 Hearings 5324.
64 Malek exhibit No. 26, 18 Hearings 8419.
65 Robert Brown, at the time of this meeting, was Special Assistant to the President.
00 See 18 Hearings 8232 ; Malek exhibit 7, 18 Hearings 8345.
67 18 Hearings 8837*
406
funding processes for campaign reasons, he claimed that he was person-
ally not involved in such activities. 68 Brown, on the other hand, claimed
in executive session, that, while he did involve himself in the grant-
making process, he never promoted a grant for reelection purposes. 69
Malek testified that, in regard to the Farmer transaction, he believed
he took no action to insure that Farmer’s application was approved
and instructed no one to do so. He denied that any improper quid fro
quo was involved in the F armer grant. 70
After Malek testified, the committee obtained a May 2, 1972, memo-
randum 71 from Malek to Robert Finch, former Secretary of Health,
Education, and Welfare and White House aide, which is reprinted
here in its entirety :
Following our conversation I have had several meetings
with Jim Farmer and have had him meet, with Bob Brown
and Paul Jones (the head of the campaign’s Black Vote Di-
vision). The results of these meetings and follow-up actions
which. I have instigated are as follows:
1. Farmer has been given a grant from OE to fund his
project here in Washington.
2. He will now be able to spend a major part of his time
on the above project while also making time available to
the re-election efforts.
3. He has agreed to do speaking on our behalf and also
to talk to key black leaders in an effort to gain their loyal-
ties.
I feel that Jim is in a position to make a major contribu-
tion to our effort, and am confident that he will. At the same
time we are going to try to maintain his involvement in a
mannfer that is not overtly partisan and does not harm his
credibility.
Many thanks for getting this started and for putting me
onto it. [Emphasis added?]
Upon apprisal of this memorandum, Mr. Malek maintained his
contention that there was no improper quid fro quo respecting this
grant, but stated that the memorandum indicated that he or his staff
“checked” on this matter before the award was finalized. Mr. Farmer,
by both affidavit and letter 72 also has denied that there was any quid
fro quo involved in this grant, stating that “it was not payment for
any services rendered to the campaign”. He has, in fact, averred that
“I did no campaigning whatever, in any shape, manner or form. That
fact is a matter of the public record.”
2. CHARLES WALLACE MATTER
On July 14, 1972, Jones, in the memorandum that is exhibit No. 19, 73
reported to Malek under the heading “Major Accomplishments” that :
68 Jones executive session, pp. 127-31.
68 See, e.g., Brown executive session, pp. 36-7, 49.
70 18 Hearings 8270—8272 Brown testified that: “* * * I did not call in people and say,
well, we are just going to help all Republicans this time, or are we going to help all
people that’s going to vote for Nixon next time. None of that was ever done, and there is
nobody who can ever say that Bob Brown called him up and said we are going to give you
a contract over here if you vote for the President down the road here, or if you come over
here, we are going to do this. There was no quid pro quo kind of deals made, particularly
in view of the fact that there w r ere many people, I would say, that most of them who got
the money as the record will clearly show, were working * * * Democrats.”
Exhibit No. 18, 19 Hearings 8837.
72 Exhibit No. 18, 19 Hearings 8843.
73 19 Hearings 8848.
407
Thru White House contacts initiated new efforts to assist
Charles Wallace, President, Wallace & Wallace Fuel Oils,
in overcoming present constraints to expand his business.
This has, for the time being, allowed us to assist a staunch
Nixon supporter.
Neither Mr. Jones nor Mr. Wallace was able to inform the com-
mittee exactly what “constraints” were overcome by the “new efforts”
that were initiated. Mr. Wallace, in an affidavit dated April 13, 1974, 71
states that on October 26, 1972, he received a SBA 8(a) contract for
an estimated $2, 146, 220. 16 Wallace, in this affidavit, claims there was
no quid pro quo arrangement that promoted this contract and the
Select Committee has received no substantial evidence of such an
arrangement. However, the committee notes that on September 12,
1972, Wallace sent approximately 2,000 letters to minority SBA 8(a)
contractors seeking their support for the President’s reelection, as the
documents collected at exhibit No. 19 demonstrate.
3. ADDITIONAL INVOLVEMENT OF CAMPAIGN OFFICIALS IN GOVERNMENTAL
PROCESSES
Other documents obtained by the Select Committee reveal election-
motivated involvements by campaign officials in decisionmaking proc-
esses respecting the expenditure of Federal funds to aid blacks. For
example :
1. In a January 17, 1972, “Weekly Report” 76 Jones wrote Robert C.
Odle, CRP administrative director, that :
Data was collected in connection with setting up briefing
books on (1) black communities throughout the Nation, (2)
list of key contacts by states and (3) minority recipients of
grants, loans, and contracts. (A need is to develop coordina-
tion with agencies on future grants and contracts to insure
maximum benefits.) [Emphasis added.]
This communication was passed on verbatim to Mr. Mitchell, then the
Attorney General, in a “Confidential” January 19 memorandum by
Mr. Odle. 77
2. In a “Confidential Weekly Report” dated March 24, 1972, to
Malek from Jones, 78 the latter wrote : “A meeting in the office of John
Evans resulted in agreement on strategy to effectively deal with
3. An April 4, 1972, “Weekly Activity Report” 79 from Jones to
Odle stated:
We met during the week with members of the Washington
Team in review of OMBE grants to work out strategy for
greater impact in connection with the campaign. We also were
in contact with local trade association representatives who
7i 8ee exhibit No. 19, 19 Hearings 8856.
75 A letter from Mr. Wallace’s counsel is also found at exhibit No. 19.
78 Exhibit No. 20, 19 Hearings 8862.
77 Mr. Odle does not recall this matter, or any of the items discussed in this section. He
stated he was the designated recipient of various weekly reports, the substance of which
he would send to Mr. Mitchell after the secretarial staff had put them in the proper format.
He said he often would not read the reports he received.
78 Exhibit No. 21, 19 Hearings 8863.
79 Exhibit No. 22, 19 Hearings 8864.
408
offer possible funding alternatives — and developed a proposal
in this regard. [Emphasis added.]
4. Jones, in a “Weekly Activity Report” to Malek dated Septem-
ber 7, 1972, 80 stated :
Attended White House OMBE meeting to clarify status of
minority-oriented proposals that have been submitted by
active supporters. [Emphasis added.]
5. In another “Weekly Activity Report” dated February 22, 1972. 81
Jones wrote Odle :
We attended the national meeting of Opportunity Indus-
trialization Centers (OIC— minority employment program).
OIC is presently receiving approximately 80% of its budget
[from Administration programs] yet scheduled speakers who
were critical of the President (Roy Wilkins, NAACP ; Ralph
Abernathy, SCLC ; Vernon Jordan, National Unban League) .
We are pursuing, and are in definite need of, assuring [that]
future grants, loans, contracts and appointments serve the
Black community in a more positive manner than in the past.
Examples of such funding coming back to haunt us is [sic]
seen in the Model Cities, OMBE, and OEO programs.
An almost identical paragraph is contained in a February 25, 1972,
“Memorandum for the Attorney General Through : Jeb S. Magruder”
from Robert Odle. In an earlier “Confidential” memorandum dated
February 18, 1972, to Magruder, 82 Jones had recommended :
That the Administration bring under closer scrutiny its
program of grants and loans and specifically that Labor
Department manpower personnel follow-up with OIC.
6. In a January 10, 1972, “Weekly Report,” 83 Jones wrote Odle :
In Chicago Jones conferred with the Reverend Jesse
Jackson (formerly of S.C.L.C.’s Operation Breadbasket) of
the recently formed organization PUSH. Jackson is now
seeking financial support for the new group (which has an
economic thrust) and is also anxious to meet with the Presi-
dent. His support and/or “neutrality” (lack of active support
of another candidate) could go far in favorably swinging
black votes to RN. He is considered a definite possibility
and appears anxious to move. Some early decision, policy-
wise, should be made regarding follow-up posture (and Jones
suggests that it should include input from Bob Brown) . At
Jackson’s invitation Jones attended a luncheon of leading
black businessmen of Chicago. A number are ready to assist
us and had praise, during a press conference, for the Adminis-
tration’s efforts and assistance for minority owned banks.
Jones suggests an additional area that should be considered
for federal deposits is with minority -owned Savings and Loan
Associations! — and at an early date.
80 Exhibit No. 23, 19 Hearings, 8865.
81 Exhibit No. 24, 10 Hearings 8867.
82 Exhibit No. 25. 19 Hearings 8869.
83 Exhibit No. 26, 19 Hearings 8870.
409
Reverend Jackson, 'however, has informed the Select Committee that
he never sought or received Federal funding for PUSH. For a time
he was a supporter of Senator McGovern.
7. On May 11, 1972, Jones sent a “Weekly Activity Report” to
Malek that declared : 84
Coordinating and developing with Bob Brown’s office a
strategy for a 30 million dollar negotiation for the Dept, of
Labor.
Neither Jones nor Brown were able to provide significant details to
the committee as to the subject matter of this negotiation. 85
4. SOLICITATION OF CONTRIBUTIONS FROM BLACK RECIPIENTS
OF FEDERAL MONEYS
There is evidence that campaign contributions w r ere sought from
blacks whose firms held Government contracts, grants, and loans. The
most prominent example of this activity concerned the solicitations
for a $100 a plate campaign dinner for blacks in Washington on
June 10, 1972. 86 Contributing to this dinner, for example, were Jack
Crawford and Charles Wallace who have been previously identified
in this report as Government contractors.
Another individual solicited was Sam Harris, who is president of
the Trade Association of Minority Management Consulting Firms and
also president of Sam Harris & Associates, a Washington-headquar-
tered firm with Government contracts. Harris, in a committee inter-
view, indicated that, in regard to solicitation for this dinner and other
approaches in 1972 for campaign contributions by Paul Jones and
others, he was made to feel that his continued success in obtaining
Government contracts would, in significant degree, be dependent on
his contributing to the President’s reelection. Harris testified that he
did make several contributions to the President’s campaign. He said
he was also asked, in regard to the June 10 dinner, to assist in arrang-
ing the attendance of other black Government contractors.
One incident related by Harris is particularly relevant. Harris
states that the day before the election he was called by Norris Sydnor,
an assistant to Brown at the White House, and told that his company
was on a HEW list for a $250,000 HEW contract, a circumstance
that surprised Harris since he had never submitted a proposal to HEW.
Harris said Sydnor then asked for a $1,000 contribution to the cam-
paign, which Harris subsequently made after Sydnor observed that
the HEW award would more than cover the amount of the contribu-
tion. Several months later, having heard nothing from HEW? Harris
asked Sydnor about the contract, but did not receive a satisfactory
response. The contract never materialized.
Sydnor, in a staff interview, denied calling Harris the day before
the election to inform him he was under consideration for HEW fund-
ing. He also denied soliciting Harris for $1,000 on that day, although
he admitted requesting contributions from numerous people — perhaps
including Harris — at various times.
8i Exhibit No. 27, 19 Hearings, 8871.
83 Jones executive session, pp. 102-^03 ; Brown executive session, p. 55.
80 See 18 Hearings, 8259-60 ; Brown executive session, p. 66.
410
C. The Responsiveness Program Progress Report
Mention has been previously made of the June 7, 1972, “Confidential
Eyes Only” progress report on the Responsiveness Program from
Malek to Haldeman. 87 While this report, in an attachment apparently
written by Robert Davison, 88 details 12 separate “results” of the Re-
sponsiveness Program for the week ending June 2, 1972, the present
discussion is limited to several of these specifics.
1. EEOC-UNIVERSITY OF TEXAS MATTER
Two paragraphs of the report deal with an EEOC investigation
concerning the University of Texas ; the first was prepared by Davison,
the second is Malek’s summary of Davison’s account :
Senator Tower was informed by Vice Chairman Holcomb
that Ed Pena, Director of Compliance, had recommended
to Bill Brown that EEOC sue The University of Texas.
Brown appeared to agree. If such a suit took place, the re-
sult would be a serious negative impact in a key state. Brown
denies that the suit is under consideration. This should be
followed carefully.
*****
We garnered from reliable sources in the. Equal Employ-
ment Opportunity Commission that the Commission was pre-
paring to sue the University of Texas for discrimination in the
hiring of faculty. This could be disastrous in Texas. When
queried, Bill Brown, Chairman of EEOC, agreed not to pur-
sue it. I will continue to follow this situation closely
Chairman Brown of the EEOC has submitted an affidavit to the
Select Committee 89 denying the specifics of these paragraphs and pre-
senting his account of the events that transpired concerning this mat-
ter. His statement is that the only contact with him in this regard was
from someone seeking information. He states that he was not pres-
sured by anyone to forego an EEOC proceeding.
Malek has testified that the statements in this memorandum consti-
tute “puffing” on his part and that he did not personally keep abreast
of this matter as claimed. 90 In any event, several observations should be
made. A contact of some nature was made with the EEOC. (It should
be recalled that affecting “legal or regulatory actions” for reelection
purposes was one of the goals of the Responsiveness Program set forth
in the March 17, 1972, Malek to Haldeman memorandum. 91 ) Malek
claimed to Haldeman that his forces had squelched this proceeding.
Both Malek and Haldeman testified that Haldeman did not express dis-
approval of this action or instruct Malek to cease endeavoring to in-
fluence proceedings before regulatory agencies. 92
87 Malek exhibit No. 16, 18 Hearings, 8380.
88 % vison ’ in a staff interview, admitted that the projects described in this attachment
were his. The committee has learned that at least one other progress report was forwarded
to Mr. Haldeman by Daniel Kingsley, who assumed administrative responsibility for the
Responsiveness Program when Mr. Malek moved to CRP in July 1972. In fact, Mr. Kingsley,
in a committee interview, indicated that several other progress reports were prepared. The
committee has not obtained these documents and it appears that all copies were destroyed.
See section VII infra.
88 Malek exhibit No. 18, 18 Hearings, 8389.
80 18 Hearings , 8240-1.
91 Malek exhibit No. 4, 18 Hearings,
92 See 18 Hearings, , 8181—82, 8223. There is no evidence that Haldeman expressly stated
his approval of Malek’s claimed actions in this regard. Haldeman does not recall discussing
this progress report with the President. (18 Hearings, 8182.).
411
2. DOCK AND WHARF BUILDERS INVESTIGATION
The progress report contains another apparent claim of interference
with a regulatory proceeding, this time in the Labor Department. First
Davison’s statement of the matter in the backup document, then
Malek’s :
Local 45^ Dock and Wharf Builders , Philadelphia , Penn-
sylvania 1 , requested 5/10/72. Herman Bloom, Spector’s assist-
ant at the Pa. CUP requested that the subpenaed records of
Local 454 be returned. The Business Agent of the Union is a
Republican supporter and could be very helpful to the Ad-
ministration in impacting the blue collar vote in a key county.
The books were returned on 5/23/72 and the Union given a
clean bill of health
*****
The Department of Labor ruled that Local 454 of the Dock
and Wharf Builders Union in Philadelphia, whose steward is
an active backer of this Administration, was not responsible
for the illegal actions of its President. This action was re-
quested by the Pennsylvania Committee for the Re-Election of
the President, and they report that this action had a very
strong impact on the local ethnic union members.
The request for action in this regard came to Malek from A1 Kau-
pinen, a CRP staffer. 93
While Mr. Davison did make contacts with Labor on this matter, the
Select Committee has not established that his contacts actually pro-
duced the result claimed, at least by implication, in the progress report.
But the evidence does suggest that an attempt to influence the labor
proceeding was made. Further, there is testimony that Haldeman,
when this “result” was reported to him, did not criticize Malek for his
actions nor order him to refrain from operations of this nature. 94
3. FANNIE MAE INQUIRY
On March 29, 1972, Harry Flemming of CRP sent Malek the fol-
lowing “Confidential” memorandum :
Our Pennsylvania Committee for the Re-election of the
President has brought to our attention that Michael Stack, a
Democrat Ward Leader, last year earned $58,000 in mortgage
foreclosurer from Fannie Mae. Mr. Stack happens to be the
ward leader in the same ward as William Austin Meehan, who
is the Republican leader in Philadelphia, Meehan can’t under-
stand why the type of work that Stack is doing has to be given
to a Democrat ward leader who is working against our inter-
ests. Perhaps a qualified Republican could be found who could
handle F annie Mae business in that particular area. Any help
your office can give rectifying this situation would be help-
ful. 95
The progress report to Haldeman supplies certain details of the
response to this request,
83 Malek exhibit No. 17, 18 Searings, 8388.
18 Hearings, 8181-82, 8238-40, 8243-44.
“ Malek exhibit No. 16-A, 18 Hearings, 8387.
412
’William Meehan , Philadelphia , Pa.; requested 3/29/72.
William Meehan, Republican ward leader in Philadelphia,
has requested that his Democratic counterpart, Michael
Stack, be prohibited from receiving the substantial compensa-
tion he earns as a fee attorney for Fannie Mae. The impact of
such action would not be of great benefit to the re-election. It
is not possible for us to significantly change Mr. Stack’s earn-
ings as he is a close friend of Congressman Barrett, a mem-
ber of the key HUD committee that appropriates funds for
Fannie Mae. 96
Further information respecting contacts by Rob Davison on this
matter is found in the affidavit of former HUD official Richard
Goldstein. 97
D. GSA Matters
1. CAMPAIGN INVOLVEMENT IN GSA CONTRACT AWARDS
Evidence received by the Select Committee indicates that campaign
officials were participating in the selection process for the awards of
GSA architectural and engineering design contracts. The follow ing
passage is from an affidavit 98 obtained by the Select Committee from
John E. Clarke, a former White House staffer who, as his affidavit
confirms, had certain responsibilities relating to the Responsiveness
Program.
The Responsiveness Program generated activity with archi-
tectural engineering contract awards by GSA. When contract
awards were to be made, which are non-bid awards, the Archi-
tectural Engineering Contract Award Board would select
3 to 5 firms who were technically qualified to fulfill the
contract and these firms were recommended to GSA. I would
then be contacted by Larry Rousch of the GSA and Rousch
would give me the names of firms who were being considered
for an award. I would call Lee Nunn at the Finance Commit-
tee to Re-elect the President (FCRP) and ask Nunn if the
Committee had any preference as to which of the firms should
receive the award. It is my understanding that Nunn would
then check with various sources on the Hill as well as other
political sources who might be affected by the contracts to be
awarded and ascertain whether or not there was any prefer-
ence as to the award. In a day or two, Nunn would call me and
state there was no preference, if there was none, or indicate
which firm was preferred if they had a preference. I would
relay the message to Rousch at GSA.
Mr. Clarke told the committee that there were 8 to 10 instances
in which this procedure was followed. He also expressed his view that
the responsiveness concept respecting GSA worked well. Mr. Roush,
in an affidavit submitted to the committee, 99 admitted that “Mr.
Clarke’s recommendations were accorded considerable weight.” 1 He
could not recall during a committee interview a specific situation where
96 Malek exhibit No. 16, 18 Hearings , 8384.
07 Malek exhibit No. 21, 18 Hearings , 8399.
98 Malek exhibit No, 19, 18 Hearings , 8393.
99 Malek exhibit No. 20, 18 Hearings, 8397.
1 In a committee interview he used the term “great weight.**
413
Mr. Clarke’s recommendation was rejected. Mr. Roush gave the com-
mittee a list of nine contracts where Mr. Clarke had an input. Mr.
Nunn, however, could not remember any specific instance where the
names of potential GSA contractors were submitted to him for com-
ment, even though he conceded this very well could have happened.
Mr. Clarke stated that a second progress report to Haldeman — which
the Select Committee has not obtained — contained information as to
his activities respecting GSA contracts.
2. SOLICITATION OF POLITICAL CONTEIBUTIONS
The following finding of facts is from the Civil Service Commis-
sion’s opinion In The Matter Of Lewis E. Spangler, et cetera , CSC
No. F-1783-72, etc., March 29, 1972, 2 in which six GSA employ-
ees were found to have taken an active part in political management
in violation of section 4.1 of Civil Service Rule IV and 5 U.S.C. section
7324(a) (2) :
The record shows that during a meeting in his office on
November 4, 1971, Lewis E. Spangler, Acting Commissioner
of the Federal Supply Service, General Services Adminis-
tration (GSA), advised George W. Dodson, Assistant Com-
missioner, Office of Automated Data Management Services,
Federal Supply Service, GSA, that a “Salute to the Presi-
dent Dinner” was scheduled for November 9, 1971, that
tickets were available, and that he (Mr. Dodson) and his
subordinate employees could purchase, or contribute toward
the purchase, of the tickets. Mr. Dodson relayed this infor-
mation to his division chiefs at a meeting held in a conference
room adjacent to his office on the same or the following day.
Respondents Elliot Gold, Reuben T. Morgan, Joseph A.
Weisgerber, and Stephen White were present at this meet-
ing. Mr. Dodson informed them that they had a “manage-
ment objective” to meet; namely, the purchase of one and
one-half tickets for a total of $750; that employees who con-
tributed toward the purchase of a ticket would have their
names placed in a hat and the person whose name was drawn
would attend the dinner. Thereafter, Mr. Gold solicited and
received contributions by check from four employees totaling
$225. Three checks were for $25 and a fourth for $150 ; Mr.
Morgan solicited and received one $25 contribution by check;
Mr. Weisgerber solicited and received two $25 contributions
by check; and Mr. White solicited and received a check for
$25. The checks received by Gold were turned over to Dodson
at the latter’s office; Weisgerber delivered his checks to Dod-
son at a local restaurant.
The record does not show what disposition Dodson, Mor-
gan, and White made of the checks received by them. How-
ever, the “no contest” plea in each case under the Stipulation
and Waiver of Hearing is taken as an implied admission of
the truth of the allegations contained in the Letters of
Charges. Wigmore on Evidence , sec. 1066. It is found,
2 Exhibit No. 28, 19 Hearings 8872.
414
therefore, that the “Salute Dinner” was a Republican Party
political fund-raising affair, and that the proceeds of the sale
of tickets to the “Salute Dinner,” as shown above, were chan-
neled by the Respondents to the Republican Party pursuant
to a plan communicated by Lewis E. Spangler to George W.
Dodson, Jr., on November 4, 1971.
The six individuals involved were given suspensions without pay
ranging from 30 to 60 days. 3
E. Activities Regarding the Staffing of Federal Positions
As remarked, one objective of the Responsiveness Program was to
insure that personnel placements with the Government were made to
benefit the President’s reelection campaign. In fact, the White House
Personnel Office ( WHPO) under Malek and Daniel Kingsley had
been engaged in a program to insure that political considerations were
taken into account in Government staffing long before the 1972 elec-
tion campaign began. 4 The evidence suggests mat WHPO personnel
intended that political considerations be taken into account not only
in regard to placement on part-time boards and commissions and the
employment of other noncareer personnel, but also concerning the
staffing of positions in the competitive service, that is, executive
branch positions governed by civil service laws and regulations. In
fact, as subsequently discussed, Malek’s testimony in executive session
indicates that the departments and agencies were asked by the WHPO
to give special consideration to politically important prospects even
in regard to career positions. 5 The political use of Government posi-
tions in regard to the Spanish-speaking community has been treated
previously, but it is useful here to note other aspects of the Govern-
ment staffing process.
1. PART-TIME BOARDS AND COMMISSIONS
A March 1, 1971, memorandum from White House staffer John
Freeman to Kingsley (copy to Malek) discusses “Staffing Strategy
for Part-Time Boards and Commissions.” 6 While this memorandum
complains about the absence of staffing programs “for strengthening
and broadening support for the 1972 elections,” it does note that:
• . . A1 Kaupinen did establish a procedure for securing the
appointments of major financial contributors. This has been
successful and should be continued. . . .
The memorandum contains recommendations to meet 1972 campaign
needs. One proposal was to insure that a large percentage of appoint-
ments were made from States crucial to the President’s reelection.
> See section V.7.A. infra regarding similar alleged conduct In the Veterans’ Adminis-
tration.
‘Mr. Kingsley has stated that the operations of the WHPO were never part of the
Responsiveness Program, but remained an entirely Independent process. But the relevant
documents, such as the Mar. 17, 1972, Malek to Haldeman-memorandum (Malek exhibit
4, IS Hearings 8311) that sets out the basic responsiveness plan, Indicate that WHPO
personnel actions were part of that program.
5 18 Hearings 8225—28. Mr. Ehrlichman stated In a committee Interview that there was
a general “Itch, on our part, to get friends in the Departments rather than the people we
found there. ’ an “itch,” he said, that extended to competitive service positions. (18
Hearings 8194. )
* Exhibit No. 29, 19 Hearings 8882.
415
III. Financial contributor — list compiled by WHPO with
inputs from ENC, senior WH staff, Stans, etc. ; would
be placed primarily on Presidential Boards or given appro-
priate patronage rating and referred to Departments. 7
Also of interest is an August 31, 1972, memorandum from Clayton
Yeutter of CEP to Frank Herringer, 8 that states :
. . . [0]ne of the names I submitted to you several weeks
ago for a possible appointment to a committee of some kind
was a man named Wenk from South Dakota. Obie O’Brien,
our Nixon chairman, says that he believes we will get a very
large contribution from him if an appointment comes
through. Can you check on this for me ? Or should I just call
Kingsley %
On September 6, 1972, Herringer wrote Kingsley that :
Clayton Yeutter and the Nixon Chairman from South
Dakota believe that Mr. Wenk (resume attached) will be a
big help to us if we can appoint him to an advisory board or
commission.
I assume that a departmental in Agriculture would be the
only alternative. Of course, time is of the essence — the quicker
we can get a commitment, the better. Please let me know the
prospects. I would rate this as a MUST. 9
2. NON CAREER PERSONNEL GENERALLY
On February 17, 1971, Horton transmitted a memorandum to
Malek and Kingsley, to which was attached a document entitled
“Talking Points on" Changes in Management of Noncareer Person-
nel.” 10 This memorandum, here quoted in full text, appears to indi-
cate White House views as to how noncareer appointments by the
depart ments should be made :
Because this paper will be left with the Departments, we
deleted direct references to making patronage placements.
However, the concept of setting Departmental patronage
targets and the responsibilities for follow-through should
be made clear verbally. The following points should be made
clear to the Department and Agency heads :
1. Informal targets will be established on how many full-
time and part-time placements each Department can rea-
sonably absorb.
2. Following these guidelines and reflecting the skills, of
the individuals, the WHPO would assign selected politi-
cally important candidates to appropriate Departments for
placement.
3. It would be the Department’s responsibility to match
the individual to an appropriate job and report the results
back to the WHPO.
7 John Clarke, who also worked in the WHPO, has confirmed that frequent attempts
were made to place financial contributors on regulatory boards and commissions.
R Exhibit No. 30, 19 Hearings 8888. , ,
9 See exhibit No. 30, 19 Hearings 8888. Mr. Wenk stated he was not offered a Federal
appointment and did not make a significant contribution to the President’s reeleetion.
O’Brien stated he never mentioned the possibility of a contribution to Yeutter. Yeutter,
however, said he only passed on the information O’Brien gave him.
10 Exhibit No. 31 , 19 Hearings 8891.
35-687 O - 74 - 28
416
Both Kingsley and Stanton Anderson, a former WHPO staffer,
stated that this passage accurately reflected that office’s concept as to
how noncareer staffing should be handled. 11
3. COMPETITIVE SERVICE POSITIONS
The evidence accumulated by the Select Committee suggests that
the WHPO was referring applicants for competitive service positions
to the departments and agencies with the urging that political con-
siderations be taken into account in the employment determination.
Several documents discovered by the Select Committee are particularly
informative in this regard. The first is a form used by certain senior
administration officials to instruct the WHPO concerning the polit-
ical value to the President of a particular placement. Malek exhibit
No. 10 12 is an August 30, 1971, memorandum using this form from
Clark MacGregor ( at that time head of White House congressional
relations) to Kingsley concerning a particular applicant. This form
contained the following entry to be completed by the sender :
IV. Value of Placement to the
President Politically
□ Highest political value
(Must place)
□ High Political Value
(Place if possible)
□ Moderate political value
(Handle courteously)
□ Little Political Value
(Handle routinely)
Upon receipt of an important request for placement, the WHPO
would make a staffing recommendation to a particular department or
agency that included a grading respecting the political value of placing
the individual in question. The WHPO operated in part through
special referral units established in the departments and agencies. The
Civil Service Commission, at this writing, is pursuing disciplinary
action against a number of HUD and GSA officials who were connected
or worked with the special referrals units in those institutions. The
CSC claims that these persons, on requests from the White House and
others, took political considerations into account in the staffing of
competitive service positions.
An example of a WHPO request to the departments and agencies
is Malek exhibit No. 12, 13 a November 9, 1971, memorandum from
Stanton Anderson of WHPO to Mack Warren of GSA re a Leslie
Cohen, which reads :
Attached is the resume of Leslie Cohen. Mr. Cohen comes
highly recommended to this office and consequently is rated
11 The civil service laws and regulations relating to competitive service positions do not
apply to appointments to Presidential Boards and Commissions and other noncareer
assignments. However, appointments to such noncompetitive positions for political reasons
at the least must still he judged in light of that provision of the Hatch Act that makes
it unlawful for an employee of an executive agency to “use his official authority or influence
for the purpose of interfering with or affecting the result of an election. See 5 U.S.C.
732(a) and sec. VXTT infra.
13 18 Hearings 8363.
33 18 Hearings 8365.
417
as a 1 or Must Placement. We would appreciate your investi-
gating the possibilities for him in your department in Califor-
nia. We would also appreciate it if you would keep my office
closely informed of your progress on his behalf.
Kecords received by the Select Committee indicate that Mr. Cohen
was treated as a “must” case and offered a position by GSA but declined
to accept.
Mr. Anderson, in an affidavit submitted to the Select Committee
dated June 4, 1974, 14 has denied he asked the GSA to consider political
factors in determining whether Mr. Cohen would be offered a career
position. His affidavit continues :
More generally, all referrals that were sent from me to the
departments and agencies under the standard White House
rating and referral system were for non-career Schedule C
job. This was always my intent and my expectation. In some
instances, of course, these White House referrals were quali-
fied for career employment and their applications were proc-
essed in accordance with normal career procedures if the
candidate was interested in a career appointment and he com-
pleted the necessary Civil Service employment forms. At no
time, however, did I ever ask a department or agency to violate
the law or Civil Service regulations to place a person in a
career position.
It should be noted, however, that the Cohen referral quoted above
does not specify that it was for a noncareer job. Moreover, a May 7,
1971, memorandum to Jack Lemay at GSA from Anderson 15 calls into
question certain assertions in his affidavit. This document reads :
Enclosed is the resume for Mr. George M. Shirey, Jr. He is
looking for a GS-13 or 14, PIO type position. He will be
qualified with the Civil Service so he can fill either a career or
non-career slot. He is a Must. Please consider his qualifica-
tions and get back to me with the possibilities as soon as possi-
ble. Thank you. [Emphasis added.] 18
When he read this document, Mr. Anderson contended that Mr.
Shirey was a “must” only for a noncareer slot and reiterated that he
had no intention to pressure any department or agency to violate Civil
Service standards.
Mr. Kingsley has stated to the committee that “must” or “high pri-
ority” referrals were not in reference only to noncareer jobs. He said it
was left to the body involved to determine where a recommended
individual would be placed. 17 Malek’s testimony appears to comport
with Kingsley’s statement in this regard and provides other evidence
respecting what was expected from the departments and agencies :
14 Exhibit No. 32, 19 Hearings 8897.
15 Exhibit No. 33, 19 Hearings 8899. _
18 Exhibit No. 33 also contains a followup document by Lemay to other GSA officials
stating that Mr. Shirey was a “must” and that the recipients should get back to him on
this matter “as soon as possible.” Another “must” referral by Anderson and a “high
priority” referral by Robert Davison are included, with related papers, in exhibit 33. The
Davison referral appears clearly to relate to a career position. Exhibit 33 also contains
a No. “3” or courtesy referral by' Anderson of an individual for a specific job that, according
to CSC, is a career position.
17 Kingsley, however, denied any intent to pressure the departments and agencies to vio-
late Civil Service laws and regulations.
418
Hamilton. ... Is it true . . . that you were instructing
the agencies and departments when you referred names to
them . . . whether or not the placement was a “must” political
placement, or a “high priority” political placement
Malek. During my tenure in that particular position, we
did use the term “must place” occasionally. Eather than
taking that literally, it meant that it was the highest priority
and that we would want the agency to search very hard for an
appropriate position . 18
*****
Hamilton. But the basic question is . . . whether or not your
staff was asking the agencies and departments to take into
consideration political considerations in hiring, and I take it
the answer to that is “yes. ” Is that correct ?
Malek. Now I think we have to differentiate here. There
are two different ways to approach this. One would be to say
that for this particular career position we want you to hire
this person because of his political — the political advantages,
regardless of who else is qualified, or whether that person we
are recommending is qualified. That, we were not doing.
What we were doing in the case of a career position is we
would be submitting the name of a person to a department
and asking them to determine where this person would be
qualified to serve. And, then once determining that, that they
were qualified and competitive, to serve in that position, to try
to get them into it.
So, what we were really doing is facilitating the personnel
process in getting somebody in that door, where without the
political push, they may not have been getting into the door.
But we were not interfering with the competitive process of
filling a particular position . 19
*****
Hamilton. Are you saying that, before the campaign, these
referral units [at HUD and GSA] were not handling career
personnel? Competitive service personnel?
Malek. No; I am not saying that. What I am saying is that
these referral units existed throughout much of the adminis-
tration and they had two purposes.
One was to do the screening and assist in the recruiting and
evaluation and placement of people into noncareer positions.
And, second, to take all of the patronage requests that were
sent to them directly by the Congress or through us to them
and funnel them to the appropriate place in the department
for consideration. So that if we would forward to them, or if a
Congressman would forward to them, a particular recommen-
dation, they would then either evaluate that person for a non-
career position, or if it was determined that 'there were no
noncareer positions and that a career position was desired, and
it was important to place the person, they would then circu-
late that person through the department so that he could be
evaluated for various career positions.
18 18 Hearings 8227.
19 18 Hearings 8227-28.
419
And, if he qualified, and was competitive, for one of them,
brought on board, I think that is a distinction.
Hamilton. Was it your understanding that the referral
units in the various agencies were to give special considera-
tion to names sent over by the White House that were desig-
nated “must” ?
Malek. Yes. Yes, they were to give special consideration.
Absolutely. But the special consideration was not in competi-
tion for a specific job, but to insure that the person was ex-
posed to a range of jobs for which he or she was qualified. 20
F. Activities Regarding The Elderly
1. USE OF FEDERAL RESOURCES
The evidence the committee has gathered indicates that Federal
resources were employed to secure the support of older Americans.
Exhibit No. 36 21 is a November 9, 1972, memorandum from Webster
(Dan) Todd, director of the CRP older Americans voter bloc group,
to then campaign director Clark MacGregor. This document, which
is a final report on campaign activities respecting the elderly, states,
under the heading “Strong Points” :
I doubt if there has ever before been such a massive effort by
a political organization to involve itself directly in the daily
lives of so many. This effort, of course, can only be accom-
plished in an encumbent [sic] situation and the available re-
sources of the Administration through Arthur Flemming,
Elliot Richardson and the Domestic Affairs Council were
maximized ...
Elsewhere in the same memorandum, Todd refers to “an extensive
and coordinated use of USG resources.”
a. Government Brochures
Todd, in a staff interview, stated that several departments and
agencies prepared, for campaign use and at Government expense,
brochures reflecting their services for the elderly. Todd stated that
the requests for these brochures originated with him, but were tun-
neled through the Domestic Council. 22 Todd was unaware whether the
departments and agencies involved had perceived that the requests
actually came from CRP.
Various documents obtained by the Select Committee also indicate
that Government brochures were prepared for political purposes.
Evans exhibit No. 6 23 is an April 14, 1972, document entitled “Pro-
20 IS Hearings 8229. The committee has received evidence from Stephen 0. Royer, a former
Action staff recruitment officer during: 1971-72, indicating that the Action Personnel
Office, under the direction of Mr. Alan M. May and at the urging of White House officials,
was taking political considerations into account in the staffing of competitive service
positions. Mr. May has stated to. the Select Committee that it was not his intent or purpose
to politicize the procedure for filling competitive service positions. Mr. May. however, is the
author of a draft “Federal Political Personnel Manual” (exhibit No. 35, 19 Hearings
8902) dated 1972 and found in Mr. Malek’s CRP files that discusses methods by which non-
supportive career civil servants could be removed from competitive service positions so
that those positions could be filled by persons loyal to the President to his political benefit.
21 19 Hearings 9051.
22 As subsequently discussed, L. J. (Bud) Evans, who was on Charles Colson’s White
House staff and specialized in aging matters, disputes that Todd was the progenitor of
these brochures. (18 Hearings 8464 ; exhibit No. 41, 19 Hearings 9217.)
23 18 Hearings 8536.
420
posed Communications Support Program for the Older Americans
Division Committee for the Reelection of the President.” Under sub-
section “E,” entitled “Brochures/Direct Mail,” the following entry
appears :
Government agencies — each agency who has senior citizen
programs will be asked to produce an informational brochure
stating just exactly what the agency can do for older Ameri-
cans. One will be released every two weeks beginning Septem-
ber 1. The agencies who will be asked to participate are:
ACTION
HEW
HUD
DOT
OEO
AGRICULTURE
LABOR
On the cover of this document Todd wrote : “Gangbusters ! Let’s make
it happen.” 24
It appears that at least HEW, HUD, DOA, DOL, Action, OEO,
and YA actually produced brochures. Copies of these brochures are
contained in exhibit No. 38. 25 The Comptroller General has stated
that the costs of producing and mailing the DOA, HUD, DOL, Ac-
tion, OEO, and VA brochures totaled around $263, 000. 26 The Comp-
troller General noted that these six publications were distributed
in accordance with lists and preprinted mailing labels supplied
by the White House. 27 He also reported the assertions of various agen-
cy officials that this was the first time a concerted effort to produce
a number of aging brochures had been made by an incumbent admin-
istration.
Other campaign and White House documents strongly suggest a
political purpose behind the brochures. On June 7, 1972, William
Novelli of CRP wrote a confidential memorandum entitled “Govern-
ment White Papers and Brochures on Older Americans,” 28 to Todd
and L. J. Evans. This memorandum is a review o 1 ’ the brochures
project as of that date and also contains suggestions as to how to
proceed. Under the heading “Background,” Novelli wrote :
We are all in agreement that brochures produced and dis-
tributed by government departments and agencies will be im-
portant in persuading older voters to re-elect the President.
These brochures will be non-partisan enough to break through
21 Exhibit No. 37 (19 Hearings 9055) is a Mar. 7. 1972, “ confidential ” memorandum to
John Mitchell from Todd attaching a “Campaign Plan for Older Americans.” which indicates
(p. 6) the intention “to maximize all of the resources at the disposal of the Administra-
tion” to publicize the President’s efforts for older Americans. It continues : “These resources
include the use of printed materials, films, personalized direct mail, commercial and public
service radio and TV time, editorial and other print exposure, etc.”
25 19 Hearings 9135. Exhibit No. 38a. 19 Hearings 9205, contains two memorandums
from Des Barker of the White House staff to various Department and Agencv Public Infor-
mation Officers indicating that additional brochures were contemplated. This assumption
n S o/^ ip E£ rte(3 by a May 23. 1972. Evans memorandum found at exhibit 47, 19 Hearings
41. There was also a HEW brochure prepared in 1971. Evans exhibit 20. 19 Hearings
8o85. The preparation of this brochure was a separate matter and most of the memorandums
discussed below do not relate to this publication.
23 See exhibit No. 38, 19 Hearings 9135.
27 18 Hearings 8471—72.
28 Evans exhibit No. 10, 18 Hearings 8566.
421
the election year aversion to political rhetoric, but will be
strongly supportive of the President.
After outlining his views as to the contents of the brochures, Novelli,
under the heading “Distribution, Timing and Coordination,” stated :
The agencies and departments should be requested to de-
velop the brochures immediately, along with a plan for mass
distribution.
We can indirectly check copy and also stagger the release
of the brochures to insure a steady stream between now and
late September.
Exhibit No. 40 29 is an August 4, 1972, CRP memorandum for Clark
MacGregor from Fred Malek entitled “Older American Progress.”
Under the caption “Administration Support”, Malek stated :
The Older Americans project team has been particularly
imaginative in the use of administration resources to support
the re-election. Specifically, they have arranged for each De-
partment and Agency with programs that help the elderly to
develop and distribute a brochure that explains these pro-
grams. The first of the brochures (Department of Agricul-
ture) is off the presses, and mentions the President promi-
nently — not surprising since vre control the content of each
brochure. This brochure and subsequent ones will be direct
mailed to approximately one million persons * * * 30
Mr. Evans, in his executive session before the committee on May
28, 1974, vigorously denied that he perceived the primary purpose for
these brochures as political. The main goal, he said, was to inform the
elderly of the benefits and programs available to them and, he con-
tended, the brochures were mainly informational, not political. He
stated that the idea for most of these brochures evolved in 1971 before
aging activities at CRP materialized. He said he made no attempt to
stagger distribution of brochures for political benefit although he felt
it would be advantageous if periodic distribution eventuated. He con-
ceded that others in the White House and CRP may have supported
the preparation of the brochures mainly for political reasons but
emphasized that this was not his chief motivation. He stated that his
memorandums regarding these publications often sound in political
terms because he was trying to convince others to support this
project. 31
These comments by Evans should be compared with the remarks in
a May 23, 1972. “Confidential-eyes-only” memorandum written by him
to Todd and others on the subject “Government Brochures” : 32
I have been informed of disgruntlement expressed at this
morning’s breakfast concerning the development of govern-
ment “aging” brochures. So that we will be united in our
efforts to make this a successful program on behalf of the
29 19 Hearings 9212.
80 Additional documents that indicate a political purpose behind these brochures and
show that CRP personnel were participating in the planning for both their preparation
and distribution are found at Evans exhibits Nos. 7— Id, 18 Hearings 8563-75.
31 See 18 Hearings 8463-65. 8467-68, 8471-74, 8478-79, 8484-85.
32 Exhibit No. 41, 19 Hearings 9217.
422
President , I would like to take your time to review the history
regarding the development of these brochures.
In late February, Chuck Colson and I decided that the
Departments and Agencies involved with “aging” were not
letting older voters know, as well as they should or could,
what was being done by the President on their behalf. One of
the vehicles we decided to utilize to overcome this was the
development of a series of pamphlets for mass distribution.
[Emphasis added.]
The record contains a number of other documents authored by
Evans indicating political motivations behind these brochures. While
these are collected at Evans exhibit Nos. 7-16, 33 a few illustrations are
useful here. Thus, in response to Todd’s requests of July 14 and 24,
1972, as to a schedule for production and publication of certain bro-
chures, Evans responded on July 24 with a detailed schedule indicat-
ing when each of the brochures then under consideration would be
mailed. And on July 27 he sent Malek (then at CRP) a memorandum
that read :
Attached is the first government aging brochure to come
off the printing press. It still has a slight bureaucratic flavor
to it, but I think it gets across the President’s concern as well
as emphasizes his help in solving the problems of older
persons.
The original mailing will distribute 950,000 of these bro-
chures. This will leave us 550,000 remaining brochures for
distribution to Senators and Congressmen, -field organiza-
tions , and other groups we may want to reach.
We will be sending out seven additional brochures at a
rate of approximately one everv two weeks, and I will forward
these to you as they come off the press. [Emphasis added.] 34
Evans explained his memorandums stating that distribution of the
brochures would be staggered for maximum impact with the assertion
that, since it appeared the brochures would inadvertently be finalized
at different times, he told those interested they would be produced at
intervals to reduce the pressure from persons concerned with political
impact. 35
Evans also reported to Colson on these brochures as reflected in a
June 30, 1972, “Weekly Staff Report”. 36 Colson wrote “Excellent” by
Evans account of the progress on these publictions.
Colson, however, apparently became concerned about the political
nature of the brochures. An unsigned memorandum to Malek dated
August 3 states in part :
* * * Danny called this a.m. and said that Evans told him
at breakfast today that “Colson is having second thoughts
(cold feet) about the seven additional brochures.” Appar-
ently Volpe called Colson and said DOT didn’t want to do
s* 18 Hearings 8563—75.
34 Evans exhibit No. 15. 18 Wearing# 8574. The term “field organizations” refers to various
CRP operations. (18 Hearings 8473) Malek. on ton of this document, wrote in hand:
“Bud — This is really great work and should have major impact. I’ll look forward to seeing
the additional brochures. Fred”
35 IS Hearings 8472—73.
38 Malek exhibit No. 29, 18 Hearings 8427.
423
a brochure, too political w/ a quote from the P on the cover,
etc. — and this must have gotten Colson thinking.
Danny is quite alarmed — and just wanted you to be aware
of the above in case he makes a desperate plea to you to put
in a strong call to Colson to get him to back off. 37
It appears that DOT did not produce a brochure but the other six
pamphlets involved in this note — those from HUD, DOA, DOL,
Action, OEO and VA — were prepared and distributed. 38
Evans earlier had entertained doubts concerning Government pro-
duction of brochures that were too political in nature. Exhibit No.
39 39 is a March 16, 1972, “Confidential” memorandum from Evans to
Todd entitled “Older American Pamphlets” which sets out various
options for the preparation of a brochure entitled “The President
Speaks To Older Americans * * * Again,” which was to consist entirely
of quotations from and photographs of the President. 40 Evans rec-
ognized in this memorandum that preparation of a political pam-
phlet by GPO could result in a charge that, “the Republicans got the
GPO to do its campaign literature.” He also noted that the purchase
of a Government pamphlet for use by the campaign organization
“would have to be made through some dummy organization” to avoid
the contention that the pamphlet was “political.”
b. Other Uses of Government Funds
The Evans to Colson “Weekly Staff Report” referenced above 41
contains other examples of proposed expenditures of Federal funds for
what appear to be primarily campaign purposes. At page 2 Evans
wrote :
It appears that HEW has agreed to produce 60 copies of
the Richardson, Flemming, Rocha TV program taping. This
will then be distributed simultaneously to the top TV sta-
tions in all of our hey states. It is a very political slum' which
stresses time and time again the fantastic things the President
has done for older people, which is why the need for simul-
taneous distribution. This should be shown in late July or
early August. In any event, it will be shown before the Presi-
dent is nominated. [Emphasis added.]
There is a handwritten “good” by this entry written by Colson. 42 This
document also comments that, with Malek’s help, an individual, paid
by HEW, would be “brought on board to act as [Arthur] Flemming’s
scheduling-advanceman from now until the election.” An earlier
memorandum from Evans to Malek 43 indicates that this individual
37 Evans exhibit No. 17, 18 Hearings 8577.
88 18 Hearings 8475-76.
39 1!> Hearings 0207.
40 This brochure was prepared by HEW but was never printed. An earlier pamphlet of the
same nature entitled “The President Speaks To Older Americans” was printed and mailed
in 1971. (Evans exhibit No. 20, IS Hearings 8585). The following exchange occurred with
Mr. Evans regarding these two documents :
Hamilton : Neither one of these has a great deal of informational value. In other
words they don’t just tell you about xerograms.
Evans : No, but they say that the President is going to do something on behalf of
older people for programs. They Say that there is concern at the highest level of the
Federal Government on their behalf. I would think that would be something that
older people would want to know about, 18 Hearings 8485.
41 Malek exhibit No. 29, 18 Hearings 8427.
42 According to both Todd and Evans, the Richard/Flemming/Rocha tape was made but
was of such poor quality it was never used. See e.g. t 18 Hearings 8478-79,
43 Evans exhibit No. 18, 18 hearings 8578.
424
was hired as a “Consultant at HEW” and suggests that he maintain
close ties with the “Tour Office at the Re-election Committee.”
2. THE FEDERATION’ OF EXPERIENCED AMERICANS
Particularly significant are the administration’s activities concern-
ing the Federation of Experienced Americans. This organization,
which was created on March 29, 1972, on White House initiative, 44
was the recipient in 1972 of two major Federal awards :
1. A DOL contract for $1,540,000 for services from June 30,
1972, to January 31, 1974, to train and provide work for 350 poor,
elderly persons.
2. An OEO grant of $399,839 for the period November 1, 1972,
to February 28, 1974, for developing new methods to overcome
the special problems of the Spanish-speaking elderly poor.
The GAO, concerning these two awards, has now concluded that:
The grant and contract awards were processed outside
normal procedures. Officials of Labor and OEO said that both
the grant and the contract had substantial White House back-
ing. 45
As to the Labor Department contract, the GAO report (p. 13) 46 con-
tained the following statement :
The former Assistant Secretary [Malcolm R. Lovell, Jr.]
advised us that the White House took an active role in direct-
ing the Labor Department as to how the expansion moneys
were to be spent. 47 The White House staff member involved
was identified as L. J. Evans, Jr. According to the former As-
sistant Secretary, the White House wanted the $13 million in
expansion moneys to go to organizations considered friendly
to the administration. Labor’s initial allocation plan did not
satisfy this requirement and, according to the former Assist-
ant Secretary, Mr. Evans and the former executive assistant
[to the Assistant Secretary — Brad Reardon] worked out a
compromise plan which called for awarding a $1 million con-
tract to an organization to be selected by the White House.
This occurred in February 1972.
The GAO report continues (p. 13) :
The former executive assistant told us the White House
wanted Labor to cut back and/ or terminate funding for two
44 18 Hearings 8455-8456. Evans had prior association with one of FEA’s directors. (18
Hearings 8448.)
45 Report to the Special Committee on Aging and the Subcommittee on Aging, Committee
on Labor and Public Welfare, U.S. Senate, May 13, 1974, p. 1 (Evans exhibit No. 3. 18
Hearings 8489) . As Evans exhibit 1 (an Aug. 31, 1972 memorandum from Evans to Robert
Davison found at 18 Hearings 8487) indicates, an attempt was also made by the White
House to achieve HEW— AOA funding for FEA. AOA, however, refused to fund this
organization apparently because it considered the project — which was a public informa-
tion program — too “political ’ (18 Hearinas 8462). In fact. Evans’ memorandum to Davison
emphasized that the project “could be a highly effective tool between now and November 7.”
A Sept. H. !972. “Confidential” memorandum from Todd to Malek indicates that Secretary
Richardson s office was also concerned with the “legality’ of the proposed contract (which
was for $750,000) . This memorandum states that the proposal “is highly unusual and the
expenditure is not justified.” See exhibit 45. 19 Hearings 9235.
48 Evans exhibit 3, 18 Hearings 8489.
Il \. Novemt)er President personally announced that the funds for “Operation
” a Program to train and place elderly Americans, would be doubled from $13
to $26 million.
425
of the Operation Mainstream national contractors — the. Na-
tional Council on the Aging and the National Council of
Senior Citizens.
Funding to these two contractors, considered “enemies” of the White
House, was not terminated by DOL, even though the record shows
that on February 28, 1972, they were given substantially less funding
than the amounts originally recommended on December 18, 1971, by
Robert J. Brown, Associate Manpower Administrator for the U.S.
Training and Employment Service. 48 However, the White House spon-
sored FEA— which was not incorporated until March 29, 1972— did
receive a $1 million plus contract to begin on June 30, 1972. 40
The GAO also found White House involvement concerning the
OEO grant. Its report reads in pertinent part :
... An OEO official advised us that a White House staff
member, L. J. Evans, Jr., directed OEO to fund the proposal
from FEA which was for a major project concerning elderly
Spanish-speaking people.
OEO officials told us that Mr. Evans also instructed OEO
to limit its forthcoming contract extension with the National
Council on the Aging and the National Council of Senior
be expected to award a grant or contract to FEA to provide
a full range of professional training and technical assistance
for OEO aging programs that had been provided by the Na-
tional Council on the Aging for many years with funds from
OEO and other agencies, (p. 15)
*'*..***
The executive assistant tolcl us the FEA proposal was first
brought to his attention by the OEO Deputy Director and
that he met FEA’s president at the initial meeting at Mr.
Evans’ office. He said that, after OEO received the proposal,
Mr. Evans telephoned him to express his support for FEA
and then had frequent contact with him until the grant was
awarded . . . (p. 17).
A memorandum to the record dated November 17, 1972, by Irven M.
Eitreim, Chief, older persons programs, Office of Operations, OEO, 50
sets out at length his view of the circumstances surrounding the FEA
award :
All of the circumstances surrounding the processing and
awarding of the above grant have been so irregular that I am
taking this means to record and document some of those cir-
cumstances to protect myself and perhaps some other people
within the agency in the event of possible future embarrassing
disclosures.
I was informed by a staff member of the Office of Program
Review in the early part of September that :
1. The agency had been ordered by a junior White House
Staff member to fund a proposal from the Federation of
Experienced Americans (an outfit of which I had never
48 Exhibit 42, 19 Hearings 9224 (the Brown Memorandum) and exhibit 43, 19 Hearings
9231 (a DOL directive of Feb. 28. 19721 show that Brown recommended $3.4 million for
NCSL, which received $1.8 million, and $1.1 million for NCOA, which received $0.7 million.
40 A memorandum dated June 15. 1972, prepared by Fred E. Komero, Acting Director,
Office of Training and Employment Opportunities, that details the history of the approval
of this contract is found at exhibit 44, 19 Hearings 9232.
60 Evans exhibit No. 4, 18 Hearings 8530.
426
heard despite my intimate familiarity with all recognized
national organizations in the aging field) to conduct a
major project concerned with elderly Spanish-Speaking
people.
2. That the same White House staff member had in-
structed OEO to limit its forthcoming contract extension
(effective Sept. 24) with the National Council on the Aging
to a six -month period after which we would be expected to
award a grant or contract to the Federation of Ex-
perienced Americans to provide the full range of profes-
sional training and technical assistance for our aging
programs that have been provided by NCOA, over a period
of years.
*****
Late on the afternoon of October 30, 1 was given a copy of
a letter from [David] Brody [President of FEA] dated Oc-
tober 20 which contained some modifications of the work plan
and a loosely constructed budget amounting to a few dollars
under $400,000. I was told the grant must be completely
processed and signed by the end of the following day, Oc-
tober 31 * * *. I was informed that the work program and
budget were to be accepted as presented with no further op-
portunity for negotiating work or budget provisions.
At a small briefing session on the morning of October 31,
conducted in an atmosphere of conspiracy and attended by
Brody, we were told that the normal agency requirement for
Eeview Board approval had been waived, that normal ap-
proval of the Mayor of Washington and certain governors
would be handled informally and perhaps by telephone and
that standard procedures for announcing the grant were to be
by -passed at least for the time being.
In summary, I have the following reservations about this
grant :
1. I consider the grantee to be totally unqualified to do
the job.
2. I think the grant can produce nothing that is not al-
ready well researched and tested. It is a weak, poorly de-
signed plan and quite inappropriate for the use of sec. 252
funds.
3. The budget of $399,839 is grossly excessive. A planning
grant of this nature should not exceed $75,000 to $90,000.
4. The urgency and secrecy with which the grant was
pushed through were highly irregular. Never in my long
experience in the Federal Government have I experienced
anything approaching the impropriety of this grant
transaction.
5. I sense that I have been “used” as a professional pro-
gram specialist and titular head of OEO’s Older Persons
Programs and as a veteran civil servant to give this grant
some semblence of legitimacy and suspect that my profes-
sional reputation may be damaged as a result.
6. 1 am appalled by the remaining possibility that we may
427
have to award a grant or contract to FEA for the highly
complex and sophisticated professional T. & T.A. services
needed by our aging program grantees. FEA does not have
and cannot within a period of several years if ever acquire
an acceptable degree of competence to perform these func-
tions. I am convinced this course would be utterly destruc-
tive to our aging programs. An award to FEA for this
purpose would offend the entire aging constituency in the
country, knowledgeable members of both parties in the
Congress, and our own CAAs and SCS programs. No serv-
ice at all would be preferable to a contract with FEA both
from the programatic and political standpoints.
It appears that Dan Todd was also concerned about the White
House sponsorship of FEA. In a handwritten memorandum to
Malek 51 — apparently prepared after the Watergate break-in, June 17,
1972, but before June 30, 1972 — Todd stated:
The Federation of Experienced Americans has become a
matter of great concern to those of us working the elderly.
I have done as much leg work as is possible from my posi-
tion and believe the matter now deserves fast attention from
higher up :
1. 1 anticipate an extremely unfavorable reaction among
aging organizations when this group begins to move— such
that it could totally undermine the President’s credibility
with OA’s and cost considerable votes.
2. Involvement of White House personnel in questionable
activities involving a million dollars of USG funds fun-
neled through dubious outsiders could make the Watergate
episode look tiny — this has every potential of a major
scandal, if not brought under control.
3. ASF wants to talk directly with Secretary Hodgeson
as DOL funds are involved — once he does this, I’m afraid
the whole thing will be public.
All that I have are allegations — nothing that would stand
up in court, but this will be aimed at the press where proof
isn’t needed — particularly following ITT and Watergate.
I urge your attention to this matter. I’ve done all I can from
my shop. If there is any possibility, I would recommend
that the grant be canceled.
In hand on this document Malek wrote: “Discuss w/Colson.” “What
does Evans say to all this?” Todd, in a staff interview, stated that
Malek told him Colson had advised that FEA was a legitimate organi-
zation. Todd, however, continued to be disturbed by the FEA matter
as demonstrated by memorandums from him to Malek on this subject
on September 11 and November 6, 1972. 52
51 Exhibit No. 46. 19 Bearings 9239.
53 Exhibit No. 45. 19 Hearings 9235 : exhibit No. 47, 19 Hearings 9241. The September 11
memorandum claims that a report by Evans on FEA
overlooks the potential liabilities (siphoning off competitive funds from legitimate
established organizations with which we have made great progress over the last
18 months : possible tracing of the operation to the White House, which in light
of the Watergate and ITT affairs can’t help our image much ; questionable legal
status of the grants themselves which even Bud. admits to ; difficult public posture
if we are forced to defend the FEA and the questionable backgrounds and rela-
tionships of the people involved ; outright cancelling of existing grants and con-
tracts which can and will only be interpreted as politically motivated, etc.).
428
The June 30 “Weekly Staff Report” to Colson from Evans also
reflects Todd’s concern and reveals a White House purpose to injure
antiadministration organizations receiving Federal funding:
I met with Malek concerning the new aging organization,
and he was very impressed and very cooperative in getting his
guys to move out in assuring us funding at our foe's expense.
However, after having chatted with Todd, he raised cries of
alarm that such an organization would hurt us politically be-
cause we would cut funds to Democratic groups, thereby
leading them to criticize us. As you are well aware, groups
like NCSC are going to criticize us anyway. Unfortunately,
while I told Todd about the organization in confidence, he
immediately told Flemming, who was particularly upset and
called Malek. Malek seems to understand the value of the
organization, and is still working with us, but I have had
to do some shoring operations with Flemming. I don’t think
this requires any action on your part but you should be aware
of it. [Emphasis added.] 53
Colson wrote in hand by this entry : “Keep Malek on board.”
Mr. Evans confirmed in his testimony that he was involved to some
degree in the processes leading to the DOL and OEO awards. He
denied, however, that he directed either DOL or OEO to fund FEA.
While admitting that he expressed his view that funding would be
desirable, Evans claimed he lacked the power to direct either institu-
tion to make an award. He also denied that he attempted to induce
DOL and OEO to terminate or cut back existing funding to the
National Council on Aging or the National Council of Senior Citi-
zens, but did concede that he endeavored to limit any additional
funding they might receive. 54
GAO has conducted a programmatic review of FEA’s DOL con-
tract. It concluded that, in significant respects, FEA’s operations
were ineffective, deficient, or in violation of its DOL contract. GAO
also performed a financial review of FEA’s activities regarding
both the DOL contract and the OEO grant. It concluded that FEA’s
accounting system and related internal controls were inadequate. As
a result of these deficiencies. GAO questioned expenditures of ap-
proximately $184,000 under the DOL contract and $30,000 under the
OEO grant. Both DOL and OEO have concluded that it would not
be in the best interest of the Government to refund FEA’s present
programs. 55
& handwritten document found in Malek’s CRP files, apnarentlv written on June 17,
1972 ; entitled “Bud Evans — Aging Groups” (exhibit 45. 19 Hearings 9234) declares that
9?L e was “Soak un money now going to Democratic Organizations
r? Council on Aging : National Council of Sr. Citizens ; and National Farmers Union”).
04 See 18 Hearings 8441-42, 8444, 8447-48. 8451-52.
TTr?*^ e T-r Evans exhibit No. 3. 18 Hearings 8489. Exhibit 45. 19 Hearings 9234. suggests that
White House and campaign officials were interested in FEA’s promotion because it could
serve political interests” even though it was “tax exempt” having convinced IRS that it
was nonpartisan. In this regard certain facts are relevant. Before the November 1972
election, FEA. with a $5,000 “contribution” from 3M Co., prepared five radio spots
advertising administration programs that were favorable to the President. These spots
were sent to selected radio stations in fourteen states considered crucial to the President’s
reelection. (See 18 Hearings 8445-6 and Evans exhibit No. 5, 18 Hearings 8533). (The
committee has no evidence that the 3M gift was intended to be a political contribution.)
Copies of these spots were transmitted to Evans at the White House before thev were sent
to the selected stations (18 Hearings 8446. 8461). To^d informed the Committee that, dur-
ing the campaign, Evans requested that a brochure entitled “The President Cares” be de-
livered to FEA for distribution. Todd says he forbade this activity. Exhibit 46, 19 Hear-
ings 9239, may reflect his decision in this regard. Evans, however, denied he made this
request, suggesting instead that it was Todd’s idea that FEA distribute this material
and that he (Evans) discouraged it. (18 Hearings 8450.)
429
G. Other Related Activities
1. CONDUCT AT THE VETERANS’ ADMINISTRATION
The Select Committee is in receipt of information indicating that in
late 1971 and 1972 efforts were taken to politicize the Veterans’ Ad-
ministration for purposes of the President’s reelection. This informa-
tion, which has been verified in all significant respects by the Select
Committee, was first supplied to the committee by Senator Alan Cran-
ston, chairman of the Subcommittee on Health and Hospitals of the
Committee on Veterans’ Affairs. A complete report on the subcommit-
tee’s investigation is found at exhibit No. 48. 56
It appears that in late 1971 Glenn C. Wallace, then Special Assist-
ant to the Administrator, solicited $100 contributions for the Presi-
dent’s election campaign from VA employees on Federal facilities.
The contributions were in connection with a $l,000-a-plate dinner
held to pay tribute to the President. A contribution of $100 gave the
contributor the chance to draw for one of the two tickets to the din-
ner that, besides the ticket reserved for the Administrator, were avail-
able to VA personnel. The evidence collected by the Cranston subcom-
mittee also indicates that the Administrator, Donald Johnson, held a
meeting in early 1972 of top VA officials where he indicated to those
present that key officials in the Agency would be expected to lend their
full support to the reelection effort, including participation in cam-
paign activities, and that the affairs of the Agency, until the election,
would be conducted with partisan considerations in mind.
Documents obtained by the Select Committee indicate that the VA
was, to some degree, politicized during the 1972 campaign. Exhibit
No. 49 57 is an undated document from CRP files concerning “Cam-
paign Plans for Veterans’ Leaders” apparently prepared by or for
the Veterans Committee To Re-Elect the President. This document
(at p. 20) , under the heading “Administration Initiatives and Activi-
ties,” states :
Veterans’ Administration. The VA is the point of contact
for all civilian veterans who utilize any government veteran
benefits and has received favorable responses from Vietnam-
era veterans for their programs to assist returning veterans
in recent years. Because of these factors the VA will be the
primary agency used in the governmental effort to win the
support of veterans. The VA Administrator and designated
officials within his agency will be responsible for executing
the VA communications activities presented in the Communi-
cations Plan. The VA will develop program activities in the
medical and education areas and coordinate with labor and
the Presidential advisory group on employment activities
to focus attention on governmental initiatives to aid the vet-
eran. The VA will review major construction announcements,
grants, opening of new facilities, and legislative actions and
coordinate communication plans for these items with the
Committee. 58 The VA will recommend program initiatives
and action on special veterans issues and plan these activities
with the Committee. (See also, atpp. 21-3.)
50 1 9 Hearings 9242.
57 19 Hearings 9248.
58 “Committee” apparently refers to the Veterans Committee to Re-elect the President
430
Exhibit No. 50 59 is an undated “Final Report” for the CRP Vet-
erans Division found in CRP files. At page 4 it states :
The campaign staff’s effectiveness was significantly en-
hanced by its close liaison with the Veterans’ Administration
and cordination of campaign activity with the agency. Fre-
quent contact and planning with the Administrator of the
VA to place spokesmen and start action programs made pos-
sible a positive veterans program throughout the campaign. 59 *
2. THE SURROGATE PROGRAM ADVANCE SCHOOL
The evidence shows that in early January 1972, an “advance school”
in connection with the surrogate candidate program was held in the
Executive Office Building under the direction of Bart Porter, head of
the CRP surrogate program. The 50-75 attendees were mainly “Sched-
ule C” Government employees from various departments and agen-
cies. “Schedule C” employees are subject to the Hatch Act which for-
bids certain Government employees from participating in political
campaigns. (See the discussion in section VIII below.)
There is evidence that the purpose of the advance school was to
train these employees for political missions. The advance manual for
the surrogate program, 60 which was distributed at the school, states
at page 4 :
. . . [Y]ou should never lose sight of the political purpose
of the trip and the fact that the actual events are in many cases
only a vehicle for a more important purpose — namely ex-
posure of the Administration’s views to aid the President’s
re-election.
The Select Committee has received evidence regarding several in-
stances where “Hatched” Government employees advanced for or
accompanied surrogates on political trips. It is significant that FCRP
paid all bills for surrogates and their aides on campaign trips thus
underlining the political nature of the events in which “Hatched”
Government employees were involved. However, according to Jon
Foust who, on April 15, 1972, joined CRP as chief of the advance team,
advances handled by his office after that date were only performed
by CRP employees or persons in private life.
3. ACTIVITIES RE MILITARY VOTERS
Exhibit No. 52 61 is a July 12, 1972, “Administratively Confiden-
tial” memorandum from John Grinalds, then a major in the U.S.
Marine Corps and a White House fellow, to Frederick Malek con-
cerning military voters, sets out a basic strategy for maximizing the
President’s support within that constituency. Attached to that memo-
randum is a “Recommended Action Plan For Career Military Voter
Group” ; the following entry appears in the plan :
Action Step No. J+ — Surrogate speakers on military bases —
DOD officials, and U.S. Congressmen.
69 19 Hearings 9288.
598 Other evidence received by the Select Committee suggests that, largely for reelection
purposes, mobile vans owned by the VA were sent into ghetto areas to dispense informa-
tion regarding Government benefits available to Vietnam veterans and the President’s com-
mitment to the various programs involved.
60 Exhibit No. 51, 19 Hearings 9306.
61 19 Hearings 9332.
431
Purpose . — To congratulate achievements of career military
officers and N CO's on Yietnamization success and highlight
President Nixon’s leadership in process.
Responsible organization. — Committee (McAdoo) in coor-
dination with the Executive Branch (Colson) and Hill party
leadership. 62
Concept of Execution. — Committee will select most popu-
lous bases; then set up schedule with Defense for their officials
and U.S. Congressmen from the respective states to visit the
bases in Sept. /Oct. and tell the career force (who served
in Vietnam) about how the President and the country appre-
ciate their efforts and sacrifices in bringing about Vietnamiza-
tion. Strong highlight on President Nixon. Cost should be nil
since it could be charged off as official business. [Emphasis
added.]
Malek indicated his approval of this proposal on the document
but added the following comment in hand : “But discuss with Porter
first.” As noted, Bart Porter was in charge of CRP’s surrogate pro-
gram. Mr. Richard McAdoo, who is referred to in this document, has
informed the select committee that no surrogate speakers were
actually sent to military bases.
VI. RESISTANCE IN THE BUREAUCRACY TO THE
RESPONSIVENESS CONCEPT
As the previous section demonstrates, the “results” of the responsive-
ness program were many and varied. But the successes of the program
were reduced because there was considerable resistance in the Federal
establishment to bending the system to fit reelection purposes. With-
out attempting to be exhaustive, the following examples give a flavor
of the recalcitrance of some Federal officials to requests made of them
by White House and campaign officials.
A. The Failure of the Departments and Agencies to Submit
Responsiveness Plans
The basic document presenting the responsiveness concept — the
Malek to Haldeman memorandum of March If, 1972, 63 — stated that
the departments would be required to submit plans to the White
House outlining the ways in which each department could respond
to reelection needs. Accordingly, the department and agency heads,
in their briefings with Malek and members of his staff, were instructed
to prepare and present such plans. The select committee has been un-
able to establish that any formalized plans of this nature were actually
submitted to the "White House. In fact, it has received evidence that
the White House did not receive a single written plan from a depart-
ment or agency.
The experience at the Labor Department is instructive. The task of
formulating Labor’s plan was given by Secretary James Hodgson to
Laurence Silberman, then Under Secretary of Labor, now the Deputy
Attorney General. After meeting with Malek, Mr. Silberman requested
«2 The “Committee” referred to is CRP.
63 Malek exhibit No. 4, IS Hearings 8311.
35-687 0 - 74 - 29
432
that various assistant secretaries and other high Labor officials submit
to him their proposals as to how their operations could contribute to
the President’s reelection. Various plans were received, some of which
are collected at exhibit No. 14 64 along with certain weekly reports
submitted to Silberman’s office respecting activity taken to support the
campaign. But no comprehensive Labor plan was drafted for sub-
mission to Malek. Silberman made an attempt but later assigned the
task to his assistant, Richard Wise. Wise’s unfinished handwritten
draft is found at exhibit No. 53. 65 Silberman testified at the confirma-
tion hearing for his present position that he felt “uncomfortable”
about submitting an election plan to Malek and thus decided not to do
so. 66
Nonetheless, the memorandums collected at exhibit No. 14 are
instructive as to the potential for abuse that underlay the responsive-
ness program. A June 19, 1972, “Memorandum for the Under Secre-
tary” from Malcom R. Lovell, Jr., the Assistant Secretary for Man-
power, details how many millions of dollars (up to $185 million) from
Manpower Training Services and EEA money “can potentially be
utilized for the purposes we discussed.” The memorandum continues :
“As we develop plans for the allocation of the discretionary funds,
I will coordinate closely with you in order to get maximum beneficial
utilization of these funds.” However, both Mr. Silberman and Mr.
Lovell have stated that the proposal for using Labor funds for the
purposes referenced in this memorandum was never implemented.
A June 14, 1972, “Memorandum to the Under Secretary” from
George C. Guenther, Assistant Secretary for the Occupational Safety
and Health Administration, also contains several interesting
statements :
1. Guenther, under the heading “Action”, stated that, during the
campaign period :
While promulgation and modification activity must
continue, no highly controversial standards (that is, cotton
dust, etc.) will be proposed by OSHA or by NIOSH. 67 A thor-
ough review with NIOSH indicates that while some criteria
documents, such as on noise will be transmitted to us during
this period neither the contents of these documents nor our
handling of them here will generate any substantial
controversy.
While the activities of the Standards Advisory Committee
on Agriculture will commence in July, the committee will con-
centrate on priorities and long-range planning, rather than
on specific standards setting, during this period. Other stand-
ards advisory committees may be proposed during this period
but again their activities will be low keyed.
Mr. Silberman stated to the Select Committee that he did not
instruct Mr. Guenther to discontinue the apparent plan set forth in
this paragraph.
2. Under the heading “Personnel”, Guenther wrote :
We are drafting an outline of OSHA’s recruiting and
hiring plan for the next 6 months. Subject to your approval,
64 19 Hearings 8797.
65 19 Hearings 9338.
m Hearings before the Committee on the Judiciary on the Nomination of Lawrence H.
Silberman, Feb. 19. 20, 1974, n, 13.
87 NIOSH is an acronym for National Institute for Occupational Safety and Health.
433
it is our intention to provide copies of this detailed plan to
the Republican National Committee and the Committee to
Re-Elect the President. We can then consider applicants
they propose.
The original document contains a “No” by this paragraph written by
Mr. Wise to indicate his and Silberman’s disapproval of this proposal.
3. Finally Guenther stated :
While I have discussed with Lee Nunn the great potential
of OSHA as a sales point for fund raising and general sup-
port by employers, I do not believe the potential of this appeal
is fully recognized. Your suggestions as to how to promote the
advantages of four more years of properly managed OSHA
for use in the campaign would be appreciated.
No action was taken respecting this paragraph.
B. DOL Migrant Labor Grant
One “success” announced by Malek to Haldeman in the June 7, 1972
progress report 68 was actually resolved contrary to Malek’s claim due
to intransigence to White House pressure. This document contained the
following statement :
Senator Tower’s office requested that the $2.2 million mi-
grant worker program grant be given to the pro-Adminis-
tration Lower Rio Grande Valley Development Council as
opposed to the consortium of OEO/CAP agencies. DOL has
already announced that the OEO groups have the best pro-
posal. If the Development Council were to receive the grant,
there would be a significant plus for the Administration, as
OEO’s negative voice would be silenced, and the Council’s
positive feelings toward the administration could be stressed.
DOL has told Tower that the grant will be awarded to
Tower’s choice. Tower will confirm his decision this week.
Summarizing this “result”, Malek wrote :
The Department of Labor was asked to award a $2.2 million
migrant labor program contract in Texas to a pro-Adminis-
tration group. Labor had already publicly committed itself to
a consortium of anti- Administration OEO/CAP agencies.
Labor has reversed its stand.
But Labor Department records reveal that the OEO/ CAP agencies
were eventually funded — the project was approved on October 22,
1972 — albeit at a lower rate of $1.7 million. While White House pres-
sure caused a delay in funding, the grant did go to the group that
Labor deemed superior.
C. Approach to HUD
Richard Goldstein in 1972 was a special assistant to Richard Van
Dusen, then Under Secretary of HUD. Mr. Goldstein has sub-
mitted an affidavit to the committee 69 that includes the following
statement :
68 Malek exhibit No. 16, 1:8 Hearings 8885.
* Malek exhibit No. 21, 18 Hearings 8399.
434
Sometime in the summer of 1972, after Mr. Malek had left
the White House staff to join the Committee To Reelect the
President, I received a telephone call from Mr. Davidson in
the course of which he asked that the Department set aside
approximately $2-3 million that could be used in the State of
California as part of the Responsiveness Program. Under Mr.
Davidson’s proposal, an individual whom the White House
would designate, but who would not be an employee of the
Department of Housing and Urban Development with an
appropriate delegation of authority from the Secretary,
would make the decision as to how those monies were to be
committed, i.e., which cities and towns in California
would receive those funds. I told Mr. Davidson that in my
judgment such a program did not make sense ; that it sounded
illegal and certainly improper and that I felt confident that
HUD would not participate in such a program. I further told
Mr. Davidson that if he wanted a decision from a higher au-
thority I would take the matter up with Under Secretary Van
Dusen. Mr. Davidson suggested that I do that. At the con-
clusion of my conversation with Mr. Davidson, I spoke with
Under Secretary Van Dusen about this matter. He agreed and
told me that HUD would in no way participate in such a
program.
Mr. Van Dusen has confirmed that he had the conversation with
Goldstein reported in the latter’s affidavit. Mr. Davison stated to the
committee’s staff that he does not recall making the specific request set
forth in the Goldstein affidavit.
D. Difficulties With OMBE
John L. Jenkins served as Director of the Office of Minority Busi-
ness Enterprises (OMBE) at the Department of Commerce from
August 1971 until March 1973. As indicated above, OMBE was a
substantial source of Federal funding for minority businessmen. Sev-
eral memorandums reveal the dissatisfaction of White House and
campaign officials respecting Jenkins’ lack of responsiveness to cam-
paign needs.
On March 3, 1972, Malek forwarded a memorandum to Robert
Brown, William Marumoto, Paul Jones, and Alex Armendariz who
were leaders in the campaign effort regarding black and Spanish-
speaking voters. 70 This memorandum stated :
Each of you has expressed concern to me recently about the
use of OMBE grants. This, obviously, represents an excellent
opportunity to make a contribution and gain headway in the
Black and Spanish-Speaking areas.
I have discussed this situation with Ken Cole, and we are
in agreement on the importance of this program to our efforts.
However, if we are to be at all effective in the OMBE area,
we must ensure that the White House speaks with a single
voice. Ken and I are agreed that that single voice will be
John Evans of the Domestic Council staff.
I believe assigning John the complete responsibility in this
area can be quite effective and helpful to our efforts. John
70 13 Hearings 5542.
435
has the same objectives that you do, and I am sure you will
find him most receptive to your inputs and needs. In this
regard, I think it would be helpful if at an early stage you
each sat down with John to discuss the Blacks and Spanish-
Speaking problems respectively to ensure he is fully apprised
of your needs and that a meaningful liaison is established.
Later documents, however, indicate that the Jenkins-OMBE prob-
lem was not solved. On April 11, 1972, Jones sent a memorandum to
Bobert Odle 71 which reported :
We participated in meetings with White House Team mem-
bers to resolve problems centering around OMBE activities
in efforts to assure that maximum benefits flow from this
program.
And, on July 21, 1972, Jones sent a memorandum to Malek containing
the following entry : 72
Problem. — The inability, after repeated high level meet-
ings, to get favorable supportive responses from the Office
of Minority Business Enterprises remains a continuing ob-
stacle to best use of Administration resources to meet critical
needs.
Jenkins testified before the Select Committee in executive session on
February 8. 1974. He stated that, from time to time, he received tele-
phone calls regarding grants from Marumoto or Kodriguez concern-
ing pro-administration Spanish-speaking films and from Brown or
Jones as to blacks favorable to the administration. 73 Jenkins testified
he would inform the caller that the grants “were in the process” and
then would proceed to follow proper procedures as laid down by legis-
lation and regulations. He was aware, however, of the concern that he
was not cooperative and of the “rumors that [he] was not directing
the money into ‘the right hands.’”
Jenkins testified at some length regarding the pressures brought
to bear on him and his responses to them :
Hershman. Is it not true. Mr. Jenkins, that pressures came
from the While House and the Committee To Ke-Eleet the
President and the pressures took the form of influence center-
ing around various grants and contracts awarded by your
office ?
Jenkins. I suppose they would term it pressure. They
would exert effort towards getting a particular proposal. * * *
Hershman. Did they not make it clear to you that they
wanted to see grants and contracts going to firms, minority
firms, who were supportive of the administration?
Jenkins. Well, this was made in a statement, and maybe
this is where my division with the White House came. We
felt that even though this was made in a statement, that they
still wanted us to follow the prescribed rules and regulations
that had been established by the Congress to award a grant
or contract to an individual firm. And that is very well where
I probably fell in disfavor, if it was such, at the White House,
71 Exhibit 54, 19 Bearings 9341.
ra Exhibit 55, 19 Bearings 9342.
73 Jenkins executive session, Feb. 8, 1974, pp, 15-16.
436
because I did not deviate from that particular performance.
And we were told that we should be very attentive to those
persons and organizations who were favorable to the Presi-
dent. And we took that under consideration within the guide-
lines of the requirements and criteria. 734
When shown memorandums critical of his performance, Jenkins
said :
I would say that it was all brought about because of a few
small-minded people in the White House who felt that I had
not cooperated with what they wanted done. 74
Jenkins said that he was not previously aware of the March 3 Malek
memorandum quoted above relating to the appointment of John Evans
as the OMBE contact, but continued :
* * * [S]ince I see the memo I can see some connection,
because I was giving everybody a fit over there, and Maru-
moto would call me, Bob would call me, Norris Sydnor would
call me * * * and I probably was not responding like they
wanted me to, so * * * it was probably a memo * * * go ing
to Malek, saying, We are not getting the juice out of OMBE
that we should be getting out of it. And consequently this
memo came out and they appointed John. 75
Jenkins testified that he finally went to then Department of Com-
merce Under Secretary James Lynn to complain about the pressures
on him. In a meeting attended by Marumoto, Rodriguez, Lynn and
Jenkins, Lynn explained “that [ Jenkins] had certain rules and regu-
lations and requirements that had to be met and that [he] was moving
on all projects that had some viability to them.” 78 Lynn stated to the
committee that certain White House staffers were impatient with
Jenkins but that he (Jenkins) was attempting to carry out his OMBE
duties in a responsible manner.
VII. PURPORTED CANCELLATION OF THE
RESPONSIVENESS PROGRAM
Malek moved from the White House to the campaign as deputy
director on July 1, 1972. Daniel Kingsley, still at the White House,
assumed administrative responsibility for the Responsiveness Pro-
gram at that time. A progress report from Kingsley to Haldeman
(which the Select Committee has not obtained) apparently pi-ompted
the official — if not the actual — cancellation of the Responsiveness
Program.
The events leading to this cancellation are set forth in an affidavit
submitted to the , Select Committee by Frank Herringer, 77 a former
Malek assistant, now the Administrator of the Urban Mass Transit
Authority :
Sometime later (probably during September 1972), a car-
bon or Xerox copy of a “progress report” on the Responsive-
ness project, from Kingsley to Haldeman, crossed my desk
788 Jenkins executive session, pp. 13-14.
74 Jenkins executive session, p. 57.
75 Jenkins executive session, pp. 22—23.
76 Jenkins executive session, p. 24 ; see further Malek’s testimony at 18 Hearings 8268—70.
77 Malek Exhibit No. 30, 18 Hearings 8434.
437
on its way to Malek. I do not recall any specifics of the report,
but I believe it was similar to an earlier “progress report”
which was shown to me recently and which is in the [Select]
Committee’s possession. I scanned the report, or part of it,
briefly and I recall that I was generally disturbed by the
descriptions in the report of some of the individual actions
that supposedly had occurred in the Responsiveness project.
While I did not believe that anything inappropriate had ac-
tually occurred, I felt that the exaggerated tone of the report
(as is equally true in the earlier report) could cause someone
not familiar with the general staff practice of exaggerated
writing to think that inappropriate activities were being car-
ried on.
I sent the copy of the Progress Report along to Malek, with
a suggestion that he recommend to Haldeman that the proj-
ect (or at least the reports) be discontinued, and possibly
with a suggested draft memorandum for Malek to send to
Haldeman, if he agreed.
A few days later, Kingsley’s secretary collected from my
secretary materials in Malek’s and my files relating to the
early stages of the development of the “Responsiveness” proj-
ect. As far as I can recall, that was the last I ever heard of the
project.
It appears that all responsiveness documents collected by Kingsley
were burned or otherwise destroyed because of their “politically sen-
sitive nature.” 78 The Select Committee obtained copies of the majority
of the responsiveness documents contained in this report from CRP
files of Malek and others that were preserved at the National Archives.
Malek essentially confirms the account set forth in the Herringer
affidavit. Malek stated to the committee that, after the Watergate affair
broke, he felt the campaign should be free of all conduct that might
be subject to misinterpretation. 79
It appears, however, from numerous documents the Select Commit-
tee has obtained, that activities of the responsiveness type continued
past September until the conclusion of the campaign. Without refer-
encing all available documents, the committee notes a November 2,
1972, confidential memorandum from Alex Armendariz to Kenneth
Cole 80 suggesting that La Raza Unida, a Spanish-speaking organiza-
tion potentially hostile to the President, might remain neutral through
the election if some of the Government programs affecting its inter-
ests “could be sprung loose within the next few days.” 81
VIII. DISCUSSION
Throughout its investigation of the activities described in this chap-
ter, the Select Committee was met with the claim that this conduct is
politics as usual, that other administrations have similarly employed
the resources at their command to insure the incumbent’s reelection.
Because the Select Committee’s investigation was limited by the Sen-
ate in S. Res. 60 to the 1972 campaign and election, the committee can-
™ Malek Exhibit No. 19. See affidavit of John E. Clarke, 18 Hearings 8893.
79 18 Hearings 8284.
80 Exhibit No. 262-62, 13 Hearings 5697.
a See further , e.g.. Exhibits Nos. 262-58, 262-60, 13 Hearings 5686, 5692.
438
not confirm or refute these charges. 82 But, to some degree, the conten-
tion that other administrations have done the same thing misses the
point. For, as the discussion that follows demonstrates, certain of the
activities described not only appear to contravene the fundamental
notion that our Nation’s citizens are entitled to equal treatment under
the laws, but also raise questions as to the applicability of specific
Federal civil and criminal statutes.
It is useful to begin this discussion by referencing the admonition
of the Supreme Court in the recent case of United States Civil Service
Commission , et al. v. National Association of Letter Carriers , AFL-
CIO, et al., 413 U.S. 548, 564-5 (1973) .
It seems fundamental in the first place that employees in
the Executive Branch of the Government, or those working
for any of its agencies, should administer the law in accord-
ance with the will of Congress, rather than in accordance with
their own or the will of a political party. They are expected
to enforce the law and execute the programs of the Govern-
ment without bias or favoritism for or against any political
party or group or the members thereof * * *
* * * [I] t is not only important that the Government and
its employees in fact avoid practicing political justice, but it
is also critical that they appear to the public to be avoiding it
if confidence in the system of representative Government is
not to be eroded to a disastrous extent.
In this case the Supreme Court affirmed the constitutionality of a por-
tion of the Hatch Act, 5 IT.S.C. 7324(a) (2), which proscribes certain
political activities by most Federal employees.
The Hatch Act, in fact, contains another broad prescription that
would seem to prohibit many of the activities described above. Section
7324(a) (1) of title 5 provides that an employee .of an executive agency
may not “use his official authority or influence for the purpose of
interfering with or affecting the result of an election.” Violation of
this provision can result in dismissal from Federal service. See 5
U.S.C. 7325. While this provision suffers from some vagueness and has
never received an authoritative interpretation by the courts, its appli-
cability must nonetheless be considered in determining the propriety
of the conduct presented in this chapter.
Moreover, the question is raised whether certain conduct described
in this chapter may have amounted to a conspiracy to defraud the
United States under 18 U.S.C. 371. The most authoritative definition
of this crime appears in the Supreme Court’s decision in Hammer-
schmidt v. United States, 265 U.S. 182, 188 (1923) (Taft, Ch. J.)
where the Court said :
To conspire to defraud the United States means primarily
to cheat the Government out of property or money, but it
also means to interfere with or obstruct one of its lawful
governmental functions by deceit , craft or trickery , or at least
by means that are dishonest. It is not necessary that the
82 One could, however, speculate with some confidence that no other administration was
as victimized by its passion to commit its plans and strategems for using Federal resources
to paper as was the present one. Of interest in this regard is a May 24, 1972, “Confidential
Eyes-only” memorandum from L. J. Evans to Malek carrying the prescription “Burn Before
Reading” by which Malek wrote “always.” Perhaps unfortunately for those involved, many
documents unearthed by the committee were not “always” burned, before or after reading.
439
Government shall be subjected to property or pecuniary loss
by the fraud, but only that its legitimate official action and
purpose shall he defeated hy misrepresentation , chicane or
the overreaching of those charged with carrying out the gov-
ernmental intention. [Emphasis added.]
See also, e.g., Dennis v. United States , 384 U.S. 855, 861 (1966),
where the court observed that section 371 “reaches ‘any conspiracy
for the purpose of impairing, obstructing or defeating the lawful
functions of any department of Government’ ” ; Hass v. Henkel , 216
U.S. 462 (1910) ; Tyner v. United States , 23 U.S. App. D.C. (1904).
The evidence accumulated by the Select Committee presents the
issues whether those administration and CEP officials who agreed on
plans to use Federal resources for political ends were engaged in a
conspiracy “to interfere with or obstruct . . . lawful Government func-
tions” and whether “legitimate official action and purpose [was] de-
feated by . . . the overreaching of those charged with carrying out
the governmental intention.” It is also relevant that the major docu-
ments promulgating responsiveness plans were classified “Confiden-
tial,” “Extremely Confidential,” and/or “Eyes Only” and noted that
secrecy in the implementation of the proposal was of paramount
necessity in order to avoid adverse publicity. Thus, a question exists
whether there was agreement to interfere with the lawful functions
of Government by “deceit, craft or trickery or . . . means that are
dishonest.”
In any event, there, are specific Federal criminal and civil statutes
that appear applicable to the conduct herein described. And, of course,
any agreement to violate a Federal criminal law could also be prose-
cuted under 18 IJ.S.C. 371 as a conspiracy to commit an offense
against the United States. 83 Certain criminal and civil statute that
appear relevant to the activity portrayed in this chapter are now
discussed. 84
1. The evidence suggests that one area of emphasis in the Responsive-
ness Program was the allotting or rechannelling of Federal money —
funds for grants, contracts, loans and subsidies — to target groups and
areas in order to enhance the President’s reelection chances, and to
individual applicants who were supportive of, or would thereafter
support, the President.
Section 595 of title 18 makes it illegal for “a person employed in any
administrative position by the United States, or by any department or
agency thereof, * * * in connection with any activity which is fi-
nanced in whole or in part by loans or grants by the United States, or
any department or agency thereof, [to use] his official authority for
the purpose of interfering with, or affecting, the nomination or the
election of any candidate for the office of President [etc.] .” The offense
is a misdemeanor and is penalized by a fine of not more than $1,000
and/or imprisonment of not more than 1 year. (There are, however,
no reported cases under this section.)
2. The committee has received evidence raising the possibility that
certain individuals were offered Government benefits in exchange for
political support or, at the least, political neutrality. Section 600 of
m A conspiracy to commit certain civil offenses against the United States would also be
prosecutable under this statute. See e.g.. United States v. Hutto, 256 U.S. 524 (1921) ;
United States v. Wiesner , 216 F. 2d 739 (2nd Cir 1954).
No attempt has been made exhaustively to catalogue all possible statutes that may
conceivably apply, but the principal provisions that appear pertinent are discussed.
440
title 18 makes it a misdemeanor punishable by a fine up to $1,000
and/ or imprisonment up to 1 year to promise any Government benefit
“or any special consideration in obtaining such benefit, to any person
as consideration, favor, or reward for any political activity or for the
support of or opposition to any candidate or any political party” in
connection with a Federal election.
3. There is evidence that plans were laid for Government officials
and others to solicit campaign contributions from minority recipients
of Federal grants, loans, and contracts. Moreover, the committee has
obtained evidence that these plans were in part consummated. It also
appears from Civil Service Commission findings and otherwise that
certain Federal employees were solicited for campaign contributions
by other Federal employees on Federal facilities. Several provisions
of the Federal criminal code are relevant regarding this conduct :
(a) Section 611 of title 18 provides that anyone “entering into a
contract with the United States * * * for the rendition of personal
services or furnishing any material, supplies, or equipment * * *
if payment for performance of such contract or payment for such
material, supplies [or] equipment is made in whole or in part from
funds appropriated by the Congress * * * ” may not “directly or
indirectly makje] any contribution of money or other thing of
value, or promis[e] expressly or implicitly to make any such con-
tribution, to any political party, committee, or candidate for pub-
lic office or to any person for any political purpose or use.” A con-
tribution or promise to contribute is only illegal if made during
the time period from the beginning of negotiation on a Govern-
ment contract to the completion of the contract or the termination
of negotiations respecting the contract, whichever is later. It is
also illegal to solicit “any such contribution from any such person
for any such purpose during any such period.” Penalty for viola-
tion is a fine of not more than $5,000 and/or imprisonment for not
more than 5 years.
(b) Section 602 makes it criminal for “an official or employee of
the United States * * * or a person receiving any salary or com-
pensation for services from money derived from the Treasury of
the United States, directly or indirectly [to] solid [t], receiv[e],
or [be] in any manner concerned in soliciting or receiving, any
* * * contribution for any political purpose whatever, from any
other such * * * person .” [Emphasis added.] This statute carries
a fine of up to $5,000 and/or imprisonment up to 3 years.
( c ) Section 603 makes it illegal for anyone “in any room or
building occupied in the discharge of official duties by any person
mentioned in section 602 * * * [to] solici[t] or receiv[e] any con-
tribution of money or other thing of value for any political pur-
pose.” The penalties are the same as enumerated in section 602.
(d) Section 607 makes it illegal for a Federal employee to give a
campaign contribution to another Federal employee. The penalties
are the same as in sections 602 and 603. 85
85 See also the Hatch Act, 5 U.S.C. 7323, which provides :
“An employee is an Executive agency (except one appointed by the President, by and
with the advice and consent of the Senate) may not request or receive from, or give to,
an employee, a Member of Congress, or an officer of a uniformed service a thing of value for
political purposes. An employee who violates this section shall be removed from the service.”
441
4. The March 17 Malek-to-Haldeman memorandum 86 setting forth
the basic precepts of the Responsiveness Program indicates that one of
the goals of that program was the shaping of legal and regulatory
proceedings to benefit the President’s reelection campaign. And in a
Malek-to-Haldeman memorandum dated June 7, 1972, 87 Malek appears
to claim that, for campaign purposes, his forces achieved successful
results respecting EEOC and Labor Department proceedings.
Section 1505 of title 18 provides that “[wjhoever corruptly * * *
influences, obstructs, or impedes or endeavors to influence, obstruct
or impede the due and proper administration of the law under which
[a] proceeding is being had before [a] department or agency of the
United States * * * [sjhall be fined not more than $5,000 or impris-
oned not more than 5 years, or both.”
5. The evidence indicates that various Federal employees were
actively engaged in the President’s reelection campaign. It appears
that some of these employees were not exempt from the provisions of
the Hatch Act, 5 U.S.C. 7324(a)(2), which provides that “[a]n
employee in an Executive agency * * * may not * * * take an active
part in political management or in political campaigns.” Violation
of this provision may result in dismissal from office. See 5 U.S.C.
7325.
6. The select committee has received evidence suggesting that White
House and campaign officials, acting through special personnel re-
ferral units established in various departments and agencies, were
engaged in a program to place political supporters of the adminis-
tration in Government positions regulated by the civil service merit
system, that is, competitive service positions. It is unlawful for a
department or agency to make determinations on staffing for com-
petitive service positions on the basis of political considerations. For
example, section 4.2 of Executive Order No. 10577, which was issued
pursuant to 5 U.S.C. 3301, provides that:
No discrimination shall be exercised, threatened, or prom-
ised by any person in the executive branch of the Federal
Government against or in favor of any employee in the com-
petitive service, or any eligible or applicant for a position in
the competitive service because of his * * * political affilia-
tion * * * except as may be authorized or required by law.
Other similar statements of the law are found at section 7.1 of Execu-
tive Order No. 10577, section 9.5 of Executive Order No. 11598 and
5 CFR 300.103 (c) , 330.101.
The committee rejects the proposition that much of the conduct
described in this chapter should be viewed as acceptable political
practice. The responsiveness concept involved the diverting of tax-
payers’ dollars from the primary goal of serving all the people to
the political goal of reelecting the President. To condone such activity
would display a limited understanding of the basic notion that the
only acceptable governmental responsiveness is a responsiveness to the
legitimate needs of the American people.
85 Malek exhibit No. 4, 18 Hearings 8311.
87 Malek exhibit No.'ll, 18 Hearings 8380.
442
IX. RECOMMENDATIONS
1. Prosecution for violations of the existing criminal statutes,
set forth above, insofar as they relate to Federal elections, and
the criminal statutory enactments recommended below should be
entrusted to the Public Attorney, whose establishment is else-
where recommended.
The reasons supporting the committee’s recommendation for a per-
manent Public Attorney are presented elsewhere in this report.
2. The Federal Elections Commission (elsewhere recommended)
should be given authority to investigate and restrain violations of
the Federal civil and criminal statutes referred to in this chapter
insofar as those violations relate to Federal elections. The Com-
mission should also be empowered to refer evidence of such crim-
inal violations to the Public Attorney.
The reasons supporting the committee’s recommendation for the
creation of a Federal Elections Commission are presented elsewhere in
this report, as are the specifics concerning the recommended powers of
this Commission.
3. The committee recommends that Congress enact legislation
making it a felony to obstruct, impair or pervert a Government
function, or attempt to obstruct, impair or pervert a Government
function, by defrauding the Government in any manner.
As indicated above, there is a question whether some of the conduct
described in this chapter may have interfered with the lawful func-
tioning of Government. Certain of the endeavors described were pur-
sued in concert. There is, for example, evidence that governmental offi-
cials and CRP personnel acted jointly in various attempts to use Fed-
eral resources for reelection purposes.
As noted, there is currently in the Federal Code a statute (18 U.S.C.
371) making it unlawful to conspire to defraud the United States. The
Supreme Court has ruled that a conspiracy to interfere with the law-
ful functioning of Government is prosecutable under this provision.
The committee’s recommendation, which is an elaboration of the sug-
gested provision in section 1301 of S. 1400 (the Department of Justice
bill) now pending before the Senate, would make illegal individual
conduct that fraudulently interfers with a lawful Government func-
tion. This recommendation, coupled with existing 18 U.S.C. 371, should
cover completely all future attempts by campaign officials, Government
personnel and others to use Federal resources to influence a Federal
election in a manner that interferes with lawful Government func-
tioning.
4. The committee recommends that Congress preserve as part
of the United States Code 18 U.S.C. 595, which makes it illegal for
a Government official connected with the awarding of Federal
grants and loans to use his official authority to effect a Federal
election, but recommends that this offense be upgraded to a
felony. The committee recommends that 18 U.S.C. 600, which
makes illegal the promise of Government benefit for political
support, be upgraded to a felony. The committee also recommends
that the scope of section 595 be expanded to include misuse of
official authority in connection with the dispensing of other Fed-
443
eral funds such as Government contract payments and Federal
subsidies.
The major proposed revisions of the criminal code currently before
Congress — S. 1 (the McClellan bill), S. 1400 (the Department of
Justice bill) , H.B. 10047 (the Brown Commission recommendations) —
would either seriously limit the scope of 18 IT.S.C. 595 or altogether
remove its strictures from the law. This result, in view of the factual
findings in this chapter and the necessity of preserving the sanctity of
the electoral process, is undesirable. To the contrary, this provision
and 18 TJ.S.C. 600 should be upgraded to felony level better to protect
the integrity of Federal elections.
Section 595 as now written does not appear to deal with miscon-
duct by certain Federal officials who have important responsibilities
for dispensing Federal funds — for example, those dealing with Gov-
ernment contracts and various Federal subsidies. In view of the evi-
dence uncovered, the scope of the statute should be expanded to cover
conduct by these influential Federal officials.
5. The committee recommends that Congress preserve in the
United States Code 18 U.S.C. 611— which proscribes political con-
tributions by or solicitations to Government contractors — and 18
U.S.C. 602 — which makes illegal political solicitations by persons
receiving Federal compensation, for services rendered, to other
such persons — but appropriately amend these provisions to make
illegal contributions by or knowing solicitations to (a) any person
receiving, during the calendar year a contribution or solicitation
is made, other Federal moneys (that is grants, loans, subsidies)
in excess of $5,000, and (b) the principals or dominant share-
holders of corporations receiving, during the calendar year a
contribution or solicitation is made, SBA 8(a) or OMBE awards
or other such Federal funding designed to benefit disadvantaged
and minority groups.
Section 611 only makes illegal contributions by or solicitations to
contractors compensated by Federal dollars. It does not cover con-
tributions by or solicitations to other recipients of significant Federal
funding, for example, certain grantees and loan recipients. Moreover,
the statute by its terms does not seem to cover contributions by or solici-
tations to principals or dominant stockholders of corporations receiv-
ing Federal moneys. Similarly, section 602 only covers solicitations to
those receiving Federal compensation for services rendered; it does not
condemn solicitations to those receiving Federal funding without re-
turning services, or solicitations to the principals or dominant share-
holders in corporations that receive Federal moneys. The evidence
before the committee indicates that, respecting minority groups, plans
were laid to solicit recipients of giants or loans. Also, there appear to
have been particular pressures to contribute on minority businessmen
whose corporations were quite dependent on Government business. The
law currently prohibits contributions by corporations to Federal elec-
tions and we recommended elsewhere that a $3,000 limit be placed on
the amount any individual can contribute to a Presidential campaign.
The proposal to prohibit contributions by and knowing solicitations
to the principals and dominant shareholders of corporate recipients of
SBA 8(a) or OMBE awards, or other Federal funding designed to
444
benefit disadvantaged and minority groups, adds another protection
to persons who are most dependent on Federal funds and thus all the
more susceptible to campaign solicitations by Federal candidates or
their representatives.
The current maior bills to revise the criminal code before Congress —
S. 1, S. 1400, H.R. 10047 — generally weaken the proscriptions in sec-
tions 602 and 611 and lessen the penalties lor their violation. In view
of the abuses discovered, a weakening of the law in this area seems
unwise.
6. The committee recommends that Congress amend the Hatch
Act to place all Justice Department officials — including the At-
torney General — under its purview.
The evidence the Select Committee has gathered indicates that
various Federal officials took an active part in the President’s 1972 re-
election campaign. Some of the officials apparently involved were
covered by the Hatch Act, which prohibits certain Federal employees
from engaging in political campaigns and political management, but
some were not. Some of the Federal officials who engaged in political
activities were employed at the Department of Justice, for example,
Mr. Mitchell. 88
_ Sections 7324(d) of title 5 exempts certain Justice Department of-
ficials from Hatch Act coverage. The committee, however, believes
that Justice Department officials should administer the Nation’s laws
totally removed from all political considerations. The committee thus
recommends that all Justice Department employees and officials, in-
cluding the Attorney General, be placed under the Hatch Act.
7. The committee recommends that the appropriate committees
of both Houses of Congress, in accordance with their constitu-
tional responsibilities, maintain a vigilant oversight of the
operations of the executive branch in order to prevent abuses of
governmental processes to promote success in a Federal election.
This proposal needs no discussion for an obvious major lesson of
Watergate is that vigorous congressional oversight of the executive
branch is essential.
88 In addition to this chapter, see also Chapter 1 of this report regarding the Watergate
break-in and its coverup.
CHAPTER 4
Campaign Financing
INTRODUCTION
One of the principal areas of interest to the Select Committee was
the financing of the various Presidential candidacies. As the candidates
of their respective parties, President Nixon’s and Senator McGovern’s
campaigns ultimately compiled total expenditures of over $100 million.
The unsuccessful campaigns of others seeking nomination spent mil-
lions of dollars more.
The report that follows reviews some of the more significant sub-
jects investigated by the committee, including alleged corporate con-
tributions by 13 corporations (in 12 cases the corporation or one of its
officers have pleaded guilty) ; the relationship between campaign con-
tributions to FCRP and the interest of the contributors in securing
ambassadorships; union activity in the campaign; the role of Herbert
W. Kalmbach in fundraising; the contribution of Robert Allen, whose
funds became the so-called Mexican checks; an incident involving
FCRP’s National Hispanic Finance Committee; the results of the
committee’s questionnaires; the corporate-oriented campaign of
FCRP ; the settlement of campaign debts in the campaign of Senator
McGovern ; and the receipt of certain cash contributions by the cam-
paign of John Y. Lindsay.
The 1972 campaign — particularly that of President Nixon — was, in
effect, split into two by the April 7, 1972, effective date of the Federal
Election Campaign Act of 1971. Prior to April 7, 1972, contributors
could be assured that their contributions would remain confidential.
Based on this understanding, large contributions were made, including
many in cash 1 and some out of corporate assets. Significantly, almost
all of the largest corporate contributions were made before April 7,
1972. Furthermore, one of the results of the fact that a large number
1 In a few cases, the meaning of the April 7 deadline was in dispute. The case
of the “Andreas-Dahlberg” check, dated April 10, 1972, which apparently did not actually
reach the hands of FCRP personnel until April 11, was discussed during the committee’s
public hearings. (2 Hearings 575, 699-700). In another case, involving Calvin Kovens,
it appears that he gave a check in the amount of $30,000 to his attorney, former U.S.
Senator George Smathers, prior to April 7 for delivery to the campaign. According to
Kovens’ unsworn testimony given to the committee staff, Smathers delivered the check
to Mitchell on or about April 5, 1972, but was advised that the check was improperly
made to a payee such as “President Richard Nixon Fund.” Mitchell told Smathers, accord-
ing to Kovens, that a series of checks could be made out to campaign re-election com-
mittees or the contribution could be made in cash. Kovens decided to make the contribution
in cash and assembled $30,000. Kovens gave the money to Smathers while the two were
driving to the airport on or about April 15, 1972, when Smathers was on his way to
Washington. Smathers later told Kovens that he had delivered the money to Mitchell.
In each of these cases, FCRP claimed that the contribution was promised prior to
April 7, 1972. Since the definition of a contribution included the promising of a con-
tribution. it was claimed that the contributions were promised prior to April 7, and
hence made before April 7. Since they were made before April 7 they were not made
after April 7. the agreement ran ; therefore they did not have to be reported as a post-
April 7 contribution.
( 445 )
446
of contributions were given in cash was difficulty in tracing the source
of the funds. 2
Although hundreds of persons were interviewed and tens of thou-
sands of documents examined in connection with this phase of the in-
vestigation, it was not possible, of course, to investigate fully every al-
legation or question every contributor of a substantial sum. 3 In its
eltort, the committee staff was assisted by the Government Accounting
Office and its Office of Federal Elections.
Based on the results of its investigations, the committee has made
a number of recommendations, emphasizing the importance of citizen
participation, disclosure, and accountability.
I. CORPORATE CONTRIBUTIONS
During the 1972 Presidential campaign, it appears that at least 13
corporations made contributions totaling over $780,000 in corporate
funds. Section 610 of title 18, United States Code, prohibits contribu-
tions on the part of corporations and unions. 4 Of these, 12 gave approx-
imately $749,000 to the President’s reelection campaign, which consti-
tuted the bul of the illegal corporate contributions. 5
While there is no evidence that any fundraiser for President Nixon
directly solicited a corporate contribution, there is evidence that a
number of them either were indifferent to the source of the money or,
at the very least, ma.de no effort whatsoever to see to it that the source
of the funds was private rather than corporate. In any event, there is
no evidence that any fundraiser who was involved in these contribu-
2 The difficulties in tracing cash contributions can be illustrated by one account received
by committee staff in the course of interviewing a substantial number of the larger con-
tributors of cash, including the following account in which, it should be noted, no evidence
of illegality was revealed by the investigation. According to interviews with the partici-
pants, six officials of Texas Eastern Transmission Corporation of Houston, Texas — -
George Kirby, President and Chief Executive Officer, Baxter Goodrick, Chairman of the
Board, William T. Kendall, Public Affairs Officer, Jack Head, General Counsel, George
Brow, Chairman of the Executive Committee, and Thomas Thagard — made donations to
a political contribution fund or “pool” at various times and in various amounts over a
period of several years. This money was kept in a safe deposit box under the control of
Kirby and Kendall and, according to safe deposit box records, Kendall made periodic
visits to the box on the average of once or twice a month to deposit or at times withdraw
cash. No records were kept of how much each person gave. Early in the Presidential
campaign, according to the above individuals, a couple of small contributions were made
to Democratic Candidates for President, but in late February or early March the con-
tributors decided to give to the Republican effort. They called Stans’ office and made
an appointment to deliver the money to FCRP in Washington. When Kendall went to
the safe deposit box and counted the money in anticipation of making a contribution, he
found approximately $31,500. He then put $30,000 in a manila envelope and delivered
the money to FCRP.
3 Because of limitations on staff and other resources, two major allegations as well as
many comparatively less well publicized ones were not explored by the Committee — the
circumstances surrounding the contribution by Robert L. Vesco to FCRP and the alleged
commitment by ITT in connection with the Republican National Convention.
4 Section 610 reads :
It is unlawful for any national bank, or any corporation organized by authority of any
law of Congress, to make a contribution or expenditure in connection with any election
to any political office, or in connection with any primary election or political convention
or caucus held to select candidates for any political office, or for any corporation what-
ever, or any labor organization to make a contribution or expenditure in connection
with any election at which Presidential and Vice Presidential electors or a Senator or
Representative in. or a Delegate or Resident Commissioner to Congress are to be voted
for, or in connection with any primary election or political convention or caucus held
to select candidates for any of the foregoing offices, or for any candidate, political com-
mittee, or other person to accept or receive any contribution prohibited by this section.
Every corporation or labor organization which makes any contribution or expenditure
in violation of this section shall be fined not more than $5,000 ; and every officer or director
of any corporation, or officer of any labor organization, who consents to any contribution
or expenditure by the corporation or labor organization, ns the case may be, and any
nerson who accepts or receives any contribution, in violation of this section, shall be
fined not more than $1,000 or imprisoned not more than one year, or both : and if the
violation was willful, shall be fined not more than $10,000 or imprisoned not more than
two years, or both. . . .
5 Two^ corporations — <5ulf Oil and Minnesota Mining and Manufacturing Company — gave
to Presidential campaigns of both major parties. The figures do not include corporate
contributions of the milk producers discussed elsewhere in the Report.
447
tions sought or obtained assurances that the contribution was legal
at the time it was made.
There is no clear pattern to the solicitations that led to corporate
contributions. Thus, a number of fundraisers solicited contributions
that turned out to be corporate ; other contributions solicited by these
same individuals give all the appearance of being totally legal. Some
of these solicitations were vigorous, some were low key, to the point
where the contribution can be considered voluntary.
The sources of the corporate money also varied. The single most uti-
lized source of corporate funds was foreign subsidiaries. Corporate
funds obtained by this means included corporate “reserves” of appar-
ent long standing; others give indications of being isolated trans-
actions with the funds accumulated in response to the solicitation in
question. Another pattern included the use of corporate expense ac-
counts and corporate bonuses to reimburse corporate executives for
their contributions ; in most cases, there was, apparently, a contempo-
raneous understanding at the time the contribution was made or, in
fact, the corporate “reimbursement” actually preceded the contribu-
tion. Finally, in the great majority of cases, the contributions were
in the form of cash, which on several occasions was generated very
rapidly by the donor.
Although the bulk of the contributions preceded April 7, 1972, the
date, the new reporting law (Federal Elections Campaign Act of
1971) went into effect, there was no disclosure of the corporate nature
of any contributions until July 6, 1973. or 15 months after most of them
were made. The main impetus to the disclosure came from the imagina-
tive suit brought bv Common Cause 6 to compel disclosure of pre- April
7 contributions. When it became apparent that some sort of disclosure
by the Finance Committee To Re-Elect the President would be re-
ouired, letters were sent out by FCRP seeking enumeration of the in-
dividuals who had actually made the contributions. The responses
varied : In some cases the corporate executives prepared a list of em-
ployees — either with or without their consent — that was false ; other
executives promptly called in attorneys who advised them to make
full disclosure, which was done. According to the evidence, in at least
two cases — American Ship Building Co. and Northrop Corp. —
elaborate schemes to conceal the corporate nature of a contribution
were indulged in, and involved lying to the FBI.
There follows a summary of the committee’s investigation into
alleged and admitted corporate contributions.
A. American - Airlines, Inc.
In March 1972, r ol lowing a solicitation by Herbert Kalmbach.
the personal attorney for the President and also counsel to United
Airlines. American Airlines, Inc., made a contribution from corporate
funds in the amount of $55,000.
As related in public testimony by George A. Spater, former chair-
man of the board and chief executive officer of American Airlines, he
first met Kalmbach in March 1971. But no solicitation occurred until
July 30, 1971, when Spater was asked bv Daniel Hofgren, vice chair-
man of FCRP, to join him and Kalmbach for lunch. During that
luncheon, there was no specific request for a contribution, although
6 Common Cause v. Finance Committee To Re-Elect the President, Civil Action 1780-72,
D.D.C.
35-687 O - 74 - 30
448
Kalmbach’s role as a fundraiser was mentioned. Following the lunch-
eon, Sparter, anticipating that he would be getting a request from
Kalmbach for a substantial contribution and having heard that FCRP
was “searching for $100,000 givers,” asked an American Airlines of-
ficial to assemble $100, 000. 7
Two or so months later Kalmbach called Spater, and the two of
them had dinner in New York on October 20, 1971. At this dinner
Kalmbach asked for a contribution in the neighborhood of $100,000,
advising Spater that this would put him in a “special class.” 8 Spater
replied that he would do his best to produce $70,000 or $75,000. Kalm-
bach said that he hoped Spater would do better; as described by
Spater, Kalmbach was less than enthusiastic about Spater’s response
to his request of $100,000. No mention of cash was made in this
discussion. 9
Spater stressed that he would have preferred making the whole
contribution in a way that would have been unobjectionable but “I
wasn’t able to do it.” When Spater was asked whether he drew the
inference from what Kalmbach had said that he was trying to get
$100,000 from Spater personally, Spater replied that, “It never entered
my mind that he was, because I simply do not have the capacity to do
it, but that is a subjective evaluation.” 10
Following this request and while the corporate money was being
generated, Spater obtained a series of $5,000 checks from a friend,
had those checks converted to cash and arranged for a series of $5,000
donations in $100 bills to be made to FCRP between December 1971
and February 1972.
Meanwhile, Spater’s colleagues arranged for a check in the amount
of $100,000 to be drawn on American’s account at the Chemical Bank,
which w as transmitted to a Swiss account of a Lebanese agent, Andre
Tabourian, whom American had utilized in more traditional business
enterprises. 11 The $100,000 was charged on American’s books as “a
special commission to Andre Tabourian in connection with used air-
craft sale to Middle East Airlines.” 12 After the money was transmit-
ted to Switzerland, it was transferred back to the United States to an
account maintained at the Chase National Bank in New York. Later,
the Lebanese agent came to New York, went to the bank, obtained the
$100,000 in cash, and gave it to an American Airlines official, who
returned to the office and placed it in an office safe.
In March 1972, with $15,000 already having been contributed to
FCRP and $5,000 more from the same source in hand, Spater ar-
ranged for $55,000 in corporate funds to be removed from the safe. As
in the prior instances, the money in $100 bills was put in an unmarked
envelope and delivered either to Lee Nunn or Hugh Sloan at FCRP. 13
Aside from this contribution, Spater admitted that an American
Airlines employee, while on the company payroll, had worked for
Democrats for Nixon. This corporate contribution involved an addi-
tional $10,000.
7 IS Hearings 5499-500,
8 13 Hearings 5494, 5500. Kalmbach does not dispute that he told Spater that there
were different classes of contributors.
® 13 Hearings 5500. 5506.
10 13 Hearings 5511, 5513.
11 13 Hearings 5837.
13 13 Hearings 5837.
13 13 Hearings 5501-2.
449
More than a year later, on about April 26, 1973, Spater received a
telephone call from Ivalmbach, who stated that Stans was saying that
in view of the Common Cause suit against FCBP, it might be necessary
to release information concerning contributors; and if this were done,
A m erican Airlines would be shown as having given $75,000. Appar-
ently Ivalmbach was not seeking information, and Spater did not tell
him anything about the source of the funds. 14 After receiving addi-
tional calls concerning the possibility of disclosure, Spater went to
counsel and, following discussions, agreed to admit to the illegal con-
tribution. On July 6, 1973, American Airlines became the first corpo-
ration to make disclosure of a corporate contribution in a 1972 cam-
paign. Thereafter, the $55,000 in corporate funds was returned from
FCBP. and the entire $100,000 returned to proper corporate channels.
While noting that there was no quid pro quo involved, Spater testi-
fied at some length to the circumstances which led him, a lawyer and
former general counsel for American Airlines, to participate in the
illegal transaction. During the time of the solicitation by Kalmbach,
American had numerous matters pending before various agencies of
the Federal Government, including approximately 20 of substance;
Spater noted that it is not unusual for American to have a substantial
number of significant matters pending with the Government. 15
Among the pending items was a proposed merger between American
and Western Airlines. Spater noted that the merger agreement expired
in February 1972, and it had been extended about three or four times.
Spater had heard rumors to the effect that the White House was
opposed to the merger; the final decision, Spater noted, was in the
hands of the President, himself. In late May or June, 2 or 3 months
after the final installment was delivered to FCBP, Spater turned to
Stans, former Commerce Secretary and Chairman of FCBP, for in-
formation concerning the White House position. Spater testified that
he turned to Stans because “I did not know anybody in the political
arena at the White House,” Stans never provided him with any in-
formation. Ultimately the merger was not authorized. 16
Although Spater acknowledged that Kalmbach never threatened
him, and the merger and other American Airlines problems were never
discussed. Spater was apprehensive of the solicitation, particularly in
view of the fact that Kalmbach was not only the attorney for Ameri-
can’s principal competitor, United Airlines, but was the President’s
personal attorney. Spater expanded on this theme in response to ques-
tions from Senator Ervin.
Senator Ervin. Now here in these circumstances, Mr.
Kalmbach came in and said he wanted a contribution of
$100,000 and he hoped that it would be received and all those
who made a contribution of as much as $100,000 would be
put in some kind of a select class.
Mr. Spater. Yes, sir.
Senator Ervin. Well, didn’t you interpret that as a sort
of implied promise, as far as Mr. Kalmbach could make one,
that people who had made contributions of $100,000 would
have a superior consideration to people who were not able to
make contributions of that much %
14 13 Hearings 5503.
is 13 Hearings 5505, 5513, 5850.
16 13 Hearings 5503.
450
Mr. Spater. Well, there was the other possibility, and that
was a negative one, which was very much in my mind. I
think as a result of the hearings before this committee, it
probably might be something, and that is that you would be
regarded as a persona non grata if you didn’t. There were
two aspects: Would you get something if you gave it, or
w T ould you be prevented from getting something if you
didn’t give it ?
Senator Ervin. In other words, to use the vernacular expres-
sion, a request of this kind has a tendency to instill the fear
that if you don’t comply, you might get, in the use of the
vernacular, get it in the neck from some Government agency ?
Mr. Spater. Yes; Mr. Kalmbach, of course, is a lawyer for
our principal competitor w T ho was opposing us in the merger
case, so I didn’t believe that giving him the money would help
us in that case.
Senator Ervin. But you did fear that if you didn’t give the
money, there might be some consequences ?
Mr. Spater. Yes, sir, I was worried.
Senator Ervin. Departing from the normal use of language,
would it not be fair to say that requests of people of high
authority who control great Government power, or who have
direct access to those who control great Government power,
when they ask for contributions, there is a sort of unspoken
coercion in the request, isn’t there?
Mr. Spater. Unspoken what, sir?
Senator Ervin. Does not a request for a campaign contribu-
tion of persons from industries or the officers of industries that
are particularly subject to Government, regulation have the
effect, although there is no coercion spoken, but they have the
effect of some kind of an implied coercion, don’t they?
Mr. Spater. Yes. sir, I explained it when I was talking to
counsel of the staff that it is something like the old medieval
maps that show a flat world and then what they called “terra
incognito,” with fierce animals lying around the fringes of
this map. You just don’t know what is going to happen to you
if you get off it. I think sometimes, the fear of the unknown
may be more terrifying than fear of the known. I think this
is a very large element in the picture. 17
Under questioning from Senator Montoya, Spater added :
Senator Montoya. You did not, during your three conver-
sations with Mr. Kalmbach, give any slight thought to the
possibility that he was trying to obtain from you a voluntary
contribution for $100,000, with emphasis on the “voluntary?”
Mr. Spater. No. I do not think he would have introduced
this idea of a special class nor would he have approached me
from that point of view. 18
As a possible solution, Spater proposed restrictions on solicitation
on the part of certain former high Government officials :
I believe that the present system places unfair pressures
both on candidates and on corporate executives. As I said in
17 13 Hearings 5514 .
15 13 Hearings 5518 .
451
my statement of July 6, most contributions from the business
community are not volunteered to seek: a competitive advan-
tage, but are made in response to pressure for fear of tbe com-
petitive disadvantage that might result if they are not made.
The process degrades both the donor and the donee.
* * & # *
It is particularly dangerous when the pressure is implicit
in the position of the individual making the solicitation. I
suggest, therefore, that congressional consideration be given
to the advisability of making certain individuals wholly in-
eligible to engage in campaign solicitation. In particular, I
recommend that solicitation by individuals who are personal
representatives of officers holding such positions be made un-
lawful. 19
B. American Ship Building Co.
On April 6, 1972, Ronald H. Slater, an official of the American Ship
Building Co., delivered $100,000 to the offices of the Committee to
Re-Elect the President. Company officials have testified that at least
$25,000 of that money came from corporate funds. 20 The remaining
$75,000 is credited to George M. Steinbrenner III, chairman and
chief executive officer of the company, although the source of these
funds has not been ascertained.
According to the testimony of Robert Melcher, counsel to American
Ship Building, Thomas Evans, an attorney with the firm of Mudge,
Rose, Alexander and Guthrie and the deputy director of the Finance
Committee to Re-Elect the President, introduced Steinbrenner to
Kalmbach in Washington. Melcher testified :
Mr. Steinbrenner told me that he said that, Mr. Kalmbach
said that he would like to have Mr. Steinbrenner make a con-
tribution in the Committee to Re-Elect the President. And,
as I further recall what Mr. Steinbrenner told me, that Mr.
Kalmbach had indicated to him that the Republicans were —
I think I quote him — going to win big this year, and that
while he was aware of and was sorry about the fact that
the OSS claim had been turned down, that was water over
the dam, and that he apparently also made reference to the
fact that Mr. Steinbrenner had been active in Democratic
politics — I believe he ran the Democratic congressional dinner
campaign in 1969 and 1970 — and that it would be appropriate
for Mr. Steinbrenner to — I think he said — get on the right
team or something like that. We are going to be around here
for the next 4 years, and you ought to get with the. right group.
And then I think * * * Steinbrenner asked, well now,
what kind of a contribution do you want? I mean, what is
appropriate ?
« 13 Hearings 5515. American Airlines was charged with a nonwilfull violation of Title
18. TT S.C., sec. 610. pleaded sruilty and was fined $5,000.
20 Much of the evidence discussed below was presented at public committee sessions by
Robert E. Bnrtlome, secretary, and Matthew E. Clark, JTr., director of purchasing, for the
company. Other witnesses, Stanley J. Lepkowski, treasurer and comptroller, and John H.
Melcher, Jr., an attorney and executive vice president, testified in executive session. Stein-
brenner. who is under indictment in connection with the matter, was not questioned after
his attorney advised that he would assert his fifth-amendment privilege.
452
And Mr. Kalmbach said that there were various, appar-
ently, categories of contributions. And I gather these were
in sort of $25,000 increments, and I gathered from that, there
was an indication that in order to have any — and these are
Steinbrenner’s words — “input into the administration,” there
would be a need to make a very substantial contribution * * *.
Well, I think he said that there were some people that were
contributing $250,000. Others were contributing $500,000, and
I think Steinbrenner said to me that it would, or he got the
impression anyway, whether Kalmbach actually said this or
not I don’t know — obviously, I wasn’t there — but that it would
take $100,000 to get into the select group or whatever.
Senator Ervin. The special class was the term ?
Mr. Melcher. Well, whatever, Senator. I don’t recall. But
that was the gist of what Mr. Steinbrenner related to me of
his conversation with Mr. Kalmbach.
* * * Jjc *
Mr. Mecher. I might add one other thing, Mr. Mayton,
and this is a paraphrase and it may be totally improperly
stated, but this is the substance of it, that they would be
happv to receive any contribution, but that if you were in
the $25,000 class or if you were in the $50,000 class, you would
be amongst many, many thousands, and that you probably
Would be lost in the shuffle or wouldn’t be remembered. 20 ®
At the time of the solicitation, American Ship Building was in-
volved in two major matters with the Government.
In the first, the company was seeking $5.4 million in construction
cost overrun for the Oceanographic Survey Ship Researcher, which
was referred to previously as the OSS claim. This claim was denied by
Maurice Stans on February 11, 1972, 4 days before he left his post as
Secretary of Commerce. The company appealed to his successor,
Peter G. Peterson without success.
A partial settlement was reached on May 2, 1972. pursuant to which
American Ship Building paid $230,000 in late delivery and construc-
tion penalties. The Government did, however, excuse more than half
of the 99-week delay penalties that could have been imposed.
The second matter involved an antitrust suit which was filed by the
Justice Department in August 1972. The suit sought to block the pur-
chase of nine bulk earsro ships which operated on the Great Lakes. The
Government charged that, if allowed, this acquisition would give
American Ship Building almost total control of grain shipping opera-
tions on the lakes.
The acquisition was finallv allowed with certain stipulations. The
settlement, while not altogether beneficial to American Ship Building,
has given the companv substantial control of the grain shipping
market on the Great Lakes.
In 1970, according to Robert E. Bartlome, corporate secretary, and
Stanley J. Lepkowski. treasurer and comptroller, Steinbrenner ad-
vised them that he had been under some pressure to make political
contributions. He explained to them that many companies secured
funds for contributions through the granting of bonuses to employees,
Robert Melcher executive session, Dec. 3, 1973, p. 18.
453
who then made the proceeds available to the company. Lepkowski
voiced some objections to this scheme but after assurances from Stein-
brenner a bogus bonus plan was adopted.
The three men drew up a list of six trusted employees to receive
“bonuses,” including Lepkowski and Bartlome. Steinbrenner was the
only person with the authority to grant bonuses, and in September
1970 he appears to have authorized the first of a series of bonuses. In
late March or early April 1972, Bartlome related, Steinbrenner ad-
vised him that $25,000 was needed for an unspecified contribution.
After some discussion between the two, it was decided that the bonus
list had to be increased to eight employees. Since one official had left
the company three names were added to the list. In addition to Bart-
lome and Lepkowski, the bonus list now included Robert Clark, Robert
Dibble, Gordon Stafford, Ian Cushman, Dan Kissel, and Roy Walker.
On April 5 or 6, Steinbrenner supplied Bartlome with a list of Nixon
reelection committees and authorized $5,000 bonuses. In addition, he
gave Bartlome the name and address of the person to whom the dona-
tions were to be delivered — Herbert Kalmbach at 1701 Pennsylvania
Avenue.
On the morning of April 6, 1972, Bartlome contacted each of the
people on the bonus list. As in previous transactions, they were given
their bonus checks— in this case $5,000 — and asked to write personal
•checks of generally about $3,000. 21 He also furnished each person with
a slip of paper indicating the reelection committee to which their check
was to be written. Bartlome collected checks totaling $25,000 and
placed them in an envelope that already contained $75,000 in $3,000
checks given to him earlier by Steinbrenner. 22
Bartlome gave the envelope containing $100,000 to Slater for deliv-
ery. Slater arrived at Kalmbach’s office early in the afternoon of
April 6, 1972, and left the envelope with a secretary. Slater later con-
firmed that Kalmbach had received the donations.
The $40,000 in bonuses was charged against the Maritime Adminis-
tration's claim cost account for the O.S.S. Researcher. Lepkowski tes-
tified that this type of cost, although carried on the books as a receiv-
able against O.S.S. Marad account cost claim, would not normally be
presented for payment but rather taken as a deduction for tax pur-
poses. He did concede, however, that it was possible for this claim to be
presented to the Maritime Administration for payment. In either case
the Government and ultimately the taxpayer would be picking up at
least paid of the cost.
In January 1973, Steinbrenner became concerned about the bogus
bonus payment after a news reporter began questioning some of the
purported contributors. According to Bartlome and Lepkowski,
Steinbrenner asked them to arrange a “legitimate bonus payment plan’
to help camouflage the April 1972 transaction. A dozen employees, in-
cluding four in the previous list, were given bona fide bonuses. Bart-
21 Because the bonuses had to be reported as income by the individual involved, the
amount that had to be made available for company use varied somewhat depending on
the individuals’ tax liability. In this case the $40,000 gross netted $26,200 after tax
allowances. Any funds not needed by the company at the time bonuses were declared were
kept in trust for later contributions.
22 Steinbrenner’s ehecks were drawn on his personal account and while there is no testi-
mony linking this money to the corporation, it is known that in October 1970 Steinbrenner
was given a $75,000 bonus. The minutes of the board of directors meeting state the bonus
was “for extra effort in the settlement of the U.S. Coast Guard claim” — referring to a
favorable settlement for cost overruns claim. In mid-1973 Steinbrenner instructed Bartlome
to delete the phrase “in settlement of the U.S. Coast Guard claim.”
454
lome was asked to have the 1972 and 1973 bonus recipients sign a cer-
tificate prepared by Melcher. This certificate stated that the bonus
received was bona fide and not connected with any political contribu-
tion. The 1972 recipients were asked to backdate their signatures to
December 1971.
On or about August 1, 1973, Steinbrenner apparently instructed
Bartlome to prepare three backdated memos purporting to represent
bonuses since 1970. The purpose of these memos was to further camou-
flage the bonuses by adding some backup material. The memo granting
the April 1972 bonus is dated April 5, 1972, and states :
Mr. George M. Steinbrenner III today determined that
the Amship division had performed in an extraordinary
manner and determined that the following receive the bonuses
approved in the November 11, 1971, board of directors meet-
ing. 223
It listed Bartlome, Lepkowski, Cushman, Kissel, Clark, Stafford,
Walker, and Dibble. All the bonuses were in the amount of $5,000.
Bartlome testified he maintained a record of the receipts and dis-
bursements until :
One day — it was in my office — Mr. Steinbrenner was shown
the records for some reason. Later, he contacted Mr. Lepkow-
ski and a meeting was scheduled that afternoon. He asked Mr.
Lepkowski to bring any records that we might have at
Lorain which would show the bonuses and the distribution
of the bonuses and the dates.
Mr. Dash. Do you recall about when this was that you
were asked to turn these records over to Mr. Lepkowski and
he took them over to Lorain and to Mr. Steinbrenner?
Mr. Bartlome. To the best I can recall, it was April of
1973.
Mr. Dash. Do you know what happened to those records ?
Mr. Bartlome. Mr. Lepkowski advised me that Mr. Stein-
brenner destroyed the records. 23
In August 1973, the difficulties increased. In executive session,
Bartlome related that :
A couple of days prior to August 23, 1973, we were advised
by Mr. Steinbrenner that the FBI would be in to interview
us, that it was a routine information-gathering venture, that
it would not be under oath, our testimony would not be sworn
to.
At that time, he related a story to the effect that the group
of employees, among many others, had had several conversa-
tions in which they had determined to make political contri-
butions, that I had approached Mr. Steinbrenner, suggesting
that he advise us in the manner in which contributions should
be made. He had told us that if the contributions were small,
they should be made to a local Republican party ; that if they
were a large contribution, that he woidd provide us a list of
committees to which contributions could be made, and that he
would advise us how to get the checks down to Washington.
22 * 13 Hearings 5435 .
23 13 Hearings, 5424 .
455
Mr. Mayton. Who gave you those instructions?
Mr. Bartlome. Mr. Steinbrenner. They were not instruc-
tions ; they were related to us, or informed us to a way that
our testimony would be given to the FBI. 24
In public session, Bartlome expanded upon his earlier testimony:
Mr. Dash. Did you, in fact, give this kind of statement to
the agents of the FBI ?
Mr. Bartlome. Yes, I did.
Mr. Dash. Would you look at exhibit 271-10? This appears
to be a statement dated August 23, 1973, Lorain, Ohio, a
statement at the end of which it is attested : “I have read the
statement consisting of this and six other pages. Initialed
each page and each correction. This statement is true and cor-
rect to the best of my recollection.” It is signed by Robert E.
Bartlome.
Is this the statement or a copy of the statement that you
gave to the FBI ?
Mr. Bartlome. Yes.
Mr. Dash. In effect, this was a false statement ?
Mr. Bartlome. Yes.
Mr. Dash. Did you show this statement to any of the other
employees ?
Mr. Bartlome. We exchanged statements among us after
we — Mr. Lepkowski and I — had been interviewed. 25
Lepkowski acknowledged that he also signed a similar statement
on the 23d.
According to Matthew Clark, a day or two later he had a conversa-
tion with Steinbrenner. At that time Clark recalled :
Mr. Steinbrenner mentioned that the FBI would .be inter-
viewing us [other six contributors] about our contributions
and that Mr. Melcher, our corporate lawyer, would be talking
to us about it further. 26
Clark testified that he was subsequently contacted by Melcher and
told that:
. . . we would be questioned by the FBI and to tell them
that my wife and I had decided on our own to donate the
money to reelect the President. I mentioned to Mr. Melcher
that I did not want to involve my wife and w T ould not, but
I would say that I had decided to do this.
Mr. Melcher had in his possession previous statements by
Mr. Bartlome and Mr. Lepkowski. 27
% ^ *
Mr. Dash. Did he show them to you ?
Mr. Clark. Just by holding them up in front of me and
saying, “Reports by Mr. Lepkowski and Mr. Bartlome, and I
want you, after you are through here, to go down and take a
look at them to get an idea what they had said.”
24 Robert E. Bartlome, executive session, October 30, 1973, at p. 11.
25 13 Hearings 5426.
26 13 Hearings 5407.
27 13 Hearings 5407.
456
Mr. Dash. And what impression did you get from that
recommendation ?
Mr. Clark. Well, the impression I got — he had mentioned
that we should say that we gave the donation because of —
because of President Nixon’s involvement in the shipping in-
dustry and to help the shipping industry to get an idea of
what vein the other fellows had made the
Mr. Dash. In other words, would it be fair to say, what he
was suggesting to you was that your stories be the same, or
approximately the same, that you were giving a voluntary
contribution out of your own funds and that it was for Presi-
dent Nixon’s reelection because of what he had done for the
shipping industry?
Mr. Clark. Yes.
Mr. Dash. Now, did you in fact go down and read Mr.
Bartlome’s and Mr. Lepkowski’s statements ?
Mr. Clark. I went down and contacted Mr. Bartlome. He
did not have this report there. I then went and saw Mr.
Lepkowski. He did have his report. I did read it in Mr.
Lepkowski’s presence and returned it to him.
Mr. Dash. Then were you interviewed by the FBI agents ?
Mr. Clark. Yes.
Mr. Dash. And did you in fact give the kind of statements
that Mr. Melcher and Mr. Bartlome and Mr. Lepkowski indi-
cated that you should give ?
Mr. Clark. Similar, yes. 28
The remaining five contributors were also interviewed by the FBI,
and each gave and signed a similar statement. At least some of the
others talked to Melcher or Steinbrenner, and all were aware of the
previous statements given to the FBI by Lepkowski and Bartlome.
Between August 31, 1973 and September 3, 1973, subpenas were
issued by the Watergate grand jury to each of the eight contributors.
The subpenas called for an appearance on September 5, 1973. Clark
was the first to receive a subpena and he notified Melcher who notified
Steinbrenner.
At 11 p.m. on August 31, Steinbrenner called Bartlome into the
office for the first of a series of meetings prior to the scheduled Sep-
tember 5 grand jury appearance. Bartlome describes these meetings:
Mr. Bartlome. He told me that Mr. Clark had received a
subpena and was to appear before the grand jury on Septem-
ber 5 ; that we probably all would be receiving subpenas, but
we would not have to go before the grand jury.
He a Tain recalled the story which was basically the same as
in the FBI interview statement.
Mr. Dash. In other words, in this meeting, he restated to
you in his own words the so-called story, the fact that there
was a meeting and that all the employees had on their own
decided to give contributions for the reelection of the Presi-
dent and out of their own funds ?
Mr. Bartlome. Yes.
Mr. Dash. What did you say to Mr. Steinbrenner at that
time, if anything ?
28 13 Hearings 5408 .
457
Mr. Bartlome. It was my feeling from the conversations
with these gentlemen that they would not perjure themselves
if they went before the grand jury.
Mr. Dash. Did you say anything about what you would do ?
Mr. Bartlome. I said I would not perjure myself.
Mr. Dash. Did you again meet with Mr. Steinbrenner on
September 1, which was the very next day ?
Mr. Bartlome. Yes.
Mr. Dash. Was there anything particular of note in that
conversation ?
Mr. Bartlome. Same conversation.
Mr. Dash. Same thing. Mr. Steinbrenner again sort of re-
newing his recollection, or at least what he would like it to
be, of the story told to you ?
Mr. Bartlome. His recollection of what happened on the
granting of bonuses.
Mr. Dash. Did you dispute that with him or did you under-
stand that to be an effort just to try to get the story straight?
Mr. Bartlome. At one of the meetings here in the next 2
or 3 days I did discuss with him what I felt to be the truth.
Mr. Dash. Apparently on Labor Day, there was a meeting
about which we have already heard testimony from Mr. Clark.
You attended that meeting ?
Mr. Bartlome. Yes.
Mr. Dash. That was September 3. Who else was there ?
Mr. Bartlome. Mr. Clark, Mr. Lepkowski, and myself.
Mr. Dash. This was a meeting with Mr. Steinbrenner?
Mr. Bartlome. Yes, it was.
Mr. Dash. Can you briefly tell us what was discussed, what
Mr. Steinbrenner said and' what was said by others at the
meeting, including voiu*self ?
Mr. Bartlome. I told him I could not testify as to the ac-
curacy of the FBI statement ; that the rest of the fellows
would not perjure themselves, and we were told: “Don’t
worry, you won’t have to go before the grand jury.”
Mr. Dash. In other words, Mr. Steinbrenner told you, you
don't have to worry about anything; you won't have to go
before the grand jury.
Mr. Bartlome. That is right. 29
On September 4, the day before the scheduled grand jury appear-
ance, Steinbrenner, Melcher, Lepkowski, McMahon, and Bartlome
met.
Mr. Dash. What did Mr. Steinbrenner say at that meeting ?
Mr. Bartlome. Basically, he related the same recollection
as to how the contributions were made and why they w T ere
made; that they were large and small — how they would be
made and distributed. He remembered that on the bonus list
there were only two of the gentlemen, not the eight ; and that
very likely he would recollect there would be payment of the
bonus up to April 6 — authorizing payment up to April 6.
Mr. Dash. What did you say at that meeting?
29 13 Hearings 5427 - 28 .
458
Mr. Bartlome. I told him that this was not the way it was
handled, and I again mentioned at this meeting that the gen-
tlemen — it was my feeling they would not perjure them-
selves but would tell the truth before the grand jury.
Mr. Dash. Now, did Mr. Steinbrenner react to that when —
in fact, did somebody at that meeting say, “Finally, we
learned the truth” ?
Mr. Bartlome. That was the following meeting with Mr.
McMahon and Mr. Melcher.
Mr. Dash. Was Mr. Steinbrenner at that meeting?
Mr. Bartlome. The same date.
Mr. Dash. Mr. Steinbrenner was at that meeting?
Mr. Bartlome. Yes, he was.
Mr. Dash. And did Mr. Steinbrenner make any statement
of reaction to the fact that the truth might come out?
Mr. Bartlome. I was questioned by Mr. McMahon and re-
lated to him what I felt was the true story, and he said some-
thing to the effect, “Well, now we have finally learned the
truth.”
Mr. Dash. And what did Mr. Steinbrenner say ?
Mr. Bartlome. Mr. Steinbrenner was distraught, and I be-
lieve he did not change his recollection of what happened at
that time. 30
The September 5, 1973, grand jury appearance was postponed by
Judge John J. Sirica until September 18, to allow the eight parties
involved to retain individual counsel.
Steinbrenner met the following day with six of the contributors
and announced he had retained counsel to assist the eight. Clark testi-
fied that at this meeting :
Mr. Steinbrenner mentioned that he had wanted to go
before the grand jury or before the committee— the prose-
cuting committee, then the Cox committee — as did previous
companies, such as American and Braniff, I think are the
names he mentioned. He wanted to do that but he was advised
not to. 31
Other testimony indicates that Melcher was the adviser.
The attorney retained by Steinbrenner met with Melcher, Slater,
and the eight contributors on September 11, 1973. He advised the
eight contributors that by signing the false FBI statement they could
be in violation of title 18, United States Code, section 1001 (False state-
ments to Federal officers) . The subject of immunity was brought up
and the attorney explained the general procedure for procuring it, and
he advist d them to retain personal counsel.
On September 15, 1973, the entire group traveled to Washington,
D.C., and, with the help of Melcher, retained counsel from various
Washington firms.
The employees testified before the grand jury on September 18, 1973,
under a grant of immunity.
On April 5, 1974, Steinbrenner was indicted on one count of con-
spiracy under 18 U.S.C. 371, five counts of willful violations of 18
30 13 Bearings 5428 - 29 .
31 13 Hearings 5412 .
459
U.S.C. 610, two counts of aiding and abetting the making of a false
statement under 18 U.S.C. 1001, four counts of obstruction of justice
under 18 U.S.C. 1503 and two counts of obstruction of a criminal inves-
tigation under 18 U.S.C. 1510. Steinbrenner has entered not guilty
pleas to all counts and is awaiting trial. The company was indicted on
the same day on two counts, one count of conspiracy under 18 U.S.C.
371 and one count of a nonwillful violation of 18 U.S.C. 610. The com-
pany also pleaded not guilty.
On April 11, 1974, Melcher entered a guilty plea to a one count vio-
lation of 18 U.S.C. 610 and was fined $2,500.
C. Ashland Oil Co., Inc.
Ashland Oil Co., Inc., approximately 70th among American manu-
facturing companies with assets of about $1.5 billion and annual sales
of about $2.3 billion, made a $100,000 pre-April 7, 1972, cash contri-
bution to the Finance Committee To Re-Elect the President. Orin
Atkins, chairman of the board and chief executive officer of Ashland
Oil Co., testifying at a public session, stated that in early March
1972, Maurice Stans, by telephone, asked for a $100,000 contribution
for President Nixon’s campaign and, further, that a $10,000 adver-
tisement in the Republican convention brochure be purchased. Atkins
explained that after discussing Stans’ request with the Ashland presi-
dent and two of its vice presidents, he concluded that the corporation
should make the contribution and purchase the advertisement.
Atkins related that the money for the contribution was disbursed
from their subsidiary, Ashland Petroleum-Gabon Corp., Gabon,
Africa, and charged to an undeveloped leasehold sometime in late
March 1972. The use of false vouchers and false bonuses to generate
funds for the contribution was considered and rejected by Atkins and
his colleagues. 33 The Gabon subsidiary was used largely in order
to prevent — or at least postpone — taking the transaction as an income
tax deduction. 33 In late March 1972, William R. Seaton, vice chairman
of the board of Ashland Oil, picked up $100,000 in cash in Geneva,
Switzerland. It was delivered on April 3, 1972, by Clyde Webb, a
vice president of Ashland, to Stans who “dumped it in his desk drawer”
and said “Thank you.” 34 Atkins explained why the decision was made
to withdraw the money from the Swiss account :
Well, $100,000 in cash is a commodity which U.S. banks, I
do not believe, normally deal in from day to day. But I think
the Swiss, being a more sophisticated financial society than
ours, I believe, are used to dealings in such numbers, and
it does not excite anybody’s curiosity if you walk in and ask
for $100,000 out of a Swiss bank. If you did that in the Unit-
ed States, everybody and his brother would be wondering
what you did with it,* 35
Sometime in the spring of 1973, Stans told Webb by telephone
that there was a list of contributors and that Ashland Oil was on
it and “that he was trying to reconstruct the list and would like to
83 13 Hearings 5452 .
38 13 Hearings 5443 .
84 13 Hearings 5444 .
35 Ibid.
460
have from us (Ashland Oil) any information that we could recon-
struct.” 86 No response was made to Stans’ request.
Later, in a letter 37 dated July 9, 1973, Kenneth Parkinson, counsel
for FCRP, advised Atkins that he understood that Atkins had in-
formed the finance committee that the contribution of $100,000 was
made by Mrs. Atkins and himself. Atkins stated at that time he had
not advised anyone on the finance committee who had made the con-
tribution. 38 Meanwhile, in a letter dated July 16, 1973, Ashland’s
counsel likewise informed FCRP of the corporate source of the con-
tribution and requested that the $100,000 be returned to Ashland Petro-
leum-Gabon Corp. 39 On the same date, FCRP transmitted a check
for $100,000 payable to Ashland Petroleum-Gabon Corp. to the com-
pany’s attorney. 40
When asked, “What were the reasons that prompted you to make
the illegal corporate gift?” Atkins responded:
Well, again the situation today is diflicult to rationalize.
We were not seeking any particular privilege or benefit be-
cause we don’t do any significant business with the Govern-
ment. I think all we were attempting to do was to assure our-
selves of a forum to be heard. Were we a larger factor in our
respective industries, we could expect to have access to ad-
ministrative officials in the executive branch of Government
with ease, but being a relatively unknown corporation, despite
our size, we felt we needed something that would be sort of a
calling card, something that would let us in the door and make
our point of view heard.
We didn’t expect those points of view to be accepted, but
only from the point of view of being able to express them and
that was our thinking or rationale as to why we were inter-
ested in making any type of contribution. 41
When questioned at public session, Atkins said that the contribution
“produced [no] distinctive benefit to Ashland Oil.” Atkins included in
this respect the subsequent action by the Government lifting im-
port quotas on foreign oil. 42 However, he was shown a copy of a letter 42a
which he sent to a stockholder which stated :
“There was a good business reason for making the contribution and,
although illegal in nature, I am confident that it distinctly benefited
the corporation and the stockholders.”
Atkins explained “its (contribution) intention was to give us a
means of access to present our point of view to the executive branch of
the Government. 43 Although in view of the timing of events, Atkins
said, no such benefits occurred. However, 3 days after the contribution
Ashland officials met with officials of the Office of Emergency Pre-
paredness on the subject of obtaining greater supplies of crude oil. 44
There is no evidence that the meeting and the contribution were
connected.
38 13 Hearings 5445 .
87 13 Hearings 5796 .
88 13 Hearings 5445 .
39 13 Hearings 5797 .
40 13 Hearings 5798 .
41 13 Hearings 5442 .
« 13 Hearings 5446 - 47 .
428 13 H earing s 5800 .
43 13 Hearings 5447 .
44 13 Hearing 8 5454 .
461
Atkins acknowledged that at no time did Stans state that he
expected the contribution to be corporate, but stated :
I can’t testify as to what Mr. Stans had in mind but the
minute he mentioned it I knew it had to come from the com-
pany . . . $100,000 is an awful lot of money and I knew what
I had in the bank and it wasn’t anywhere close to that and
I knew what my associates had and there was only one source
that it could come from, from my point of view. 45
Atkins said that, as far as he knew, Stans had no reason to believe
that he could personally afford $100, 000. 46
Stans did not threaten Atkins, and Atkins was under no obligation
to Stans. The solicitation conversation took about 3 minutes and, ac-
cording to Atkins, Stans said something like, “Mr. Atkins, I would like
to have a donation.” Yet, Atkins felt under considerable pressure to
contribute the requested $100,000. Atkins noted that this was the
only request for a contribution from a former Cabinet officer. 47 Sena-
tor Ervin then addressed Atkins :
Senator Ervin. Mr. Atkins, it looks to me as if Mr. Stans
had made an assessment.
Mr. Atkins. I think that is a correct assessment.
Senator Ervin. In other words, he told you in effect that he
would let you off with a contribution of $100,000 plus a $10,000
advertisement in the convention paper.
Mr. Atkins. I believe you are right.
Senator Ervin. He never left you much option in the mat-
ter, did he ?
Mr. Atkins. I don’t believe so. It is true that I didn’t
have much of an option.
Senator Ervin. Now, this question of maintaining the
anonymity of contributions is a two-way street. It not only
protects the disclosure of the fact of the identity of the con-
tributor but it also prevents disclosures of facts which would
indicate — give a lead as to who raised the contribution and
by what method it was raised.
Mr. Atkins. Yes, sir.
Senator Ervin. Mr. Stans made a great profession when
he was before this committee that he was merely trying to
conceal the identity of contributors. But do you not agree
with me that the method — when you concealed the identity of
a contributor you also concealed a method, the way by which
you can find how the recipient of the contribution got the
contribution ?
Mr. Atkins. Yes. 48
* * * * ^
Senator Ervin. It certainly is a human weakness or desire
for anyone engaged in business to have a friendly ear in
Government.
45 13 Hearings 5451 .
46 13 Hearings 5459 .
47 13 Hearings 5458 .
48 13 Hearings 5448 .
462
Mr. Atkins. That is right, very much so.
Senator Ervin. And so departing from the realm of poli-
tics into the spiritual, the method of raising campaign contri-
butions now borders on extortion, does it not ?
Mr. Atkins. Very much so. 49
Ashland Petroleum-Gabon Corp. was indicted for making a cor-
porate contribution, and Atkins was indicted for aiding and abetting
the corporation in making the corporate contribution. The corpora-
tion entered a plea of guilty and was fined $5,000, and Atkins entered
a plea of nolo contendere and was fined $1,000.
D. Braniff Airways, Inc.
Braniff Airways, Inc,, contributed $40,000 in cash, from corporate
funds, to FCKP sometime between March 28, 1972, and April 7, 1972.
In a staff interview, Harding Lawrence, chairman of the board,
stated that on March 1, 1972, in the presence of Daniel Hofgren, vice
chairman of FCRP, he made an unsolicited $10,000 cash contribution
to Maurice Stans. Lawrence identified the source of this contribution
as $5,000 from his personal funds and $5,000 from the personal funds
of C. Edward Acker, the president of Braniff. Lawrence said StanS
thanked him for the contribution, but stated that he felt Braniff execu-
tives could do more because the companv was doing much better than
the rest of the industry. Stans suggested that a donation in the neigh-
borhood of $100,000 would be more appropriate, Lawrence told Stans
he would see what could lie done.
Lawrence ultimately decided that Braniff would contribute $40,000.
Because he was to be out of the countrv until just prior to the Anril 7,
1972, deadline and because of the need to make the contribution before
that date in order to avoid disclosure, Lawrence delegated the task of
Securing funds to a group of Braniff executives. The group, consisting
of R. H. Burck, Jr., vice president for public affairs: John Casev,
executive vice president for operations and services: Charles South,
vice president for Latin America: and Andrew J. Phalen (deceased),
vice president and treasurer, devised a plan whereby Camilo Fabrega,
Braniff’s manager in Panama, would use Camfab, a Panamanian en-
tity owned and controlled by Fabrega, as a conduit for obtaining the
funds for the contribution. Phalen caused Braniff voucher, No.
083750, 50 dated March 29, 1972, to be issued approving the payment of
$40,000 to Camfab as an advance for “expenses and services.” A
Braniff check 51 was issued to Camfab and entered on Braniff’s books
as an account receivable of $40,000 due from Camfab. The check was
forwarded to Fabrega who endorsed it on behalf of Camfab and cashed
it at a bank in Panama. He returned the proceeds, in U.S. currency,
to Braniff officials in Dallas. 52 Subsequently, Lawrence, Acker, and
Burck delivered the $40,000 in cash to Stans.
The account receivable from the Panamanian entity to the corpora-
tion was paid off and liquidated in the following manner. A supply of
special ticket stock was placed in the hands of Fabrega, Tickets writ-
ten upon this ticket stock were sold at the ticket counters only by the
48 13 Hearings 5449.
50 13 Hearings 5810.
51 13 Hearings 5812.
63 13 Hearings 5484-85.
463
supervisor in the Braniff Panama office, generally for cash. If a cus-
tomer wanted to pay by check, regular tickets were used. The receipts
were not accounted for as ticket receipts, but were applied to the
liquidation of the account receivable from the Panamanian entity.-’'
Periodically, on his trips from Panama to the Dallas head office of
Braniff, Fabrega would take several thousand dollars in cash and for
delivery to Braniff. Fabrega described these deliveries as “unusual.”
Since sales of the uncontrolled stock by December 1972 had reached
only $27,000 and Braniff wanted to liquidate the account by the end
of the year, Fabrega obtained a personal loan from a Panamanian bank
for the remaining $13,000 in that month and furnished the corporation
with a bank draft for $13,000 out of these borrowed funds, thereby
producing a total of $40,000 which liquidated the account receivable.
Fabrega testified that he subsequently reimbursed himself for the $13,-
000 through the proceeds of additional sales of the uncontrolled ticket
stock through early 1973. 54
According to Braniff, no additional taxes were owed as a result of
its corporate contribution. Revenues for the transportation of passen-
gers are entered not on the basis of ticket sales, but on the basis of
physical boardings of passengers with tickets. The fact that the un-
controlled ticket stock was sold and the receipts not accounted for as
ticket sales did not affect the corporation’s reported revenues or net
income for 1972 in view of the timing of the transactions and Braniff’s
accounting procedures. Only those ticket sales outstanding as of
July 31 of any year are taken into income. Since the monev was re-
turned to the company by its officers prior to July 31, 1973, no tax
consequences resulted. 55
Sometime in March 1972, Stans contacted Lawrence by phone and
advised him that as a result of the suit brought by Common Cause it
might become necessary to reveal the names of contributors, and re-
quested a list of the names representing the contribution from Braniff.
Shortly thereafter, Lawrence met Stans in New York and furnished
him the names and addresses of nine individuals. Apparently not all
of these people were made aware of the fact that their names were
being furnished as a source for the Braniff contribution. On July 5,
1973, Kenneth Wells Parkinson, counsel for the Finance Committee
To Re-Elect the President, forwarded a letter to Lawrence advising
him that the committee may be required shortly to disclose the names
which he had furnished to Stans. Since this created an immediate
problem for Lawrence and Braniff, it was decided to contact the people
named and request that they give their personal checks to repay Bran-
iff the $40,000 which had been contributed from unrecorded ticket
sales. 56 This was done and Braniff credited the sum to an unearned
passenger transportation account as reimbursement to Braniff. No
request was made of FCRP to return the contribution.
On November 12, 1973, Lawrence and Braniff pleaded guilty to non-
willful violations of section 610. Braniff was fined $5,000 and
Lawrence $1,000.
63 13 Hearings 5485—86.
54 13 Hearings 5486-88.
55 13 Hearings 5489-93. . ■
56 Lawrence advised the committee staff in an interview that he always intended to reim-
burse Braniff for the contribution and that he resorted to the corporate contribution as a
temporary device, because he was going to be out of the country immediately prior to
April 7, 1972. He said that he believed that other Braniff officials had the same intention
and that is why their names were submitted to Stans. Lawrence conceded, however, that
neither he nor anyone else took steps to repay Braniff until July 1973 when he was con-
tacted by Parkinson.
35-687 O - 74 - 31
464
E. The Carnation Co.
The Carnation Co. has acknowledged that a total of $7,900 in corpo-
rate funds was used in making two contributions to President Nixon’s
1972 reelection campaign. Although company executives have con-
ceded that they were under no pressure, implicit or otherwise, they
felt that the Presidential candidate preferred by a majority of the
company’s executives should be supported by a modest contribution
from the company. This philosophy, company officials now say, has
been rejected.
The first contribution, $2,900, was made in June 1972, to the Finance
Committee To Re-Elect the President. The solicitation was in the form
or a mass-mailing letter, bearing the facsimile signature of Maurice
Stans, which went to S. A. Halgren, senior vice president of Carnation,
and at least one other Carnation executive.
The second contribution, $5,000, was solicited by a Los Angeles civic
leader who is the executive officer of a local retailing concern, who
contacted H. Everett Olson, chairman of the board of directors of
Carnation, by personal letter or by telephone, requesting him to buy
10 $1,000 tickets to a Nixon fundraising dinner sponsored by the
Southern California Presidential Committee, to be held in September
1972. It was finally decided that only five tickets would be purchased
for the dinner.
Both the $2,900 and the $5,000 contributions were made by personal
checks of Carnation executives, pavable respectively to the Finance
Committee To Re-Elect the President and the Southern California
Presidential Dinner Committee. The executives were then reimbursed
in cash by Halgren. According to Carnation, the personal checks of the
executives were written by them with the expectation of reimburse-
ment. Halgren obtained the cash for the foregoing reimbursements
from corporate funds by charging the $7,900 on the books as a travel
expense to a transportation expense account.
On December 19, 1973, the Carnation Co. and Olson pleaded guilty
in U.S. district court to violation of 18 U.S.C. 610 by consenting to
the corporate contribution. The, company was fined $5,000 and Mr.
Olson $1,000.
F. Diamond International Corp.
The Diamond International Corp. made contributions from cor-
porate funds to two Presidential candidates, Richard M. Nixon and
Edmund S. Muskie, during the 1972 campaign.
The contribution to the Nixon campaign, came as a result of the
solicitation of Raphael Dubrowin, vice president of public affairs for
Diamond International, by Vincent F. DeCain, a former Diamond
employee who was then deputy assistant secretary of transportation.
Dubrowin, with the approcal of Richard J. Walters, chief executive
officer, president and chairman of the board of Diamond International,
had two checks drawn on Diamond’s corporate account for $2,500 each.
Both checks, the first, dated February 23. 1972, and the second dated
March 27, 1972, were made payable to the First National City Bank of
New York. The bank in turn issued two $2,500 treasurer’s checks to
the Effective Government Committee of the Finance Committee for
the Re-Election of the President.
465
A $1,000 contribution was made to Senator Muskie’s campaign on
December 14, 1971, based on a letter from Governor Curtis of Maine
and a followup letter from Gus Clough, a business acquaintance and
the public relations director of a Maine paper company, further solicit-
ing funds for Senator Muskie. Mr. Dubrowin, in a telephonic inter-
view with staff investigators, said a major consideration for making
this contribution was that Diamond International had business deal-
ings with the State of Maine. The mechanics of the transaction were
essentially the same as in the Nixon contribution.
On March 7, 1974, Diamond Corp. and Dubrowin entered guilty
pleas to violations of 18 U.S.C. 610 in connection with the above illegal
corporate contributions. The corporation was fined $5,000 and Dubro-
win $1,000.
G. Goodyear Tire & Rubber Co.
Goodyear Tire & Rubber Co., prior to April 7, 1972, contributed
$40,000 in cash to the Finance Committee for the Re-Election of the
President. Russell DeYoung, chairman of the board of directors and
chief executive officer of Goodyear Tire & Rubber Co., stated that the
contribution originated in a conversation with Maurice Stans on or
about February 16 or 17, 1972, in Washington, D.C. Stans told De-
Young that he would be contacting him about a contribution to the
Finance Committee for the Re-Election of the President. In public
•testimony, DeYoung stated :
There was some mention of making a contribution prior to
April 7 in order that it would not have to be publicly re-
ported * * * I discussed the matter with Mr. Arden Firestone,
vice president of Goodyear. As a result of that discussion, Mr.
Firestone, on March 9, delivered $20,000 in cash to Mr. Stans
in Washington, D.C. I did not attend that meeting, but was
later informed that Mr. Stans did not ask, and was not told,
the source of the funds ; Mr. Stans said he had hoped for a con-
tribution in the range of $50,000, but he did not state or imply
that any pressure would be brought if a larger contribution
was not forthcoming.
It was decided that, in the light of Mr. Stans’ reaction, an
additional contribution would be made. An additional $20,000
in cash was turned over to Mr. Stans by Mr. Firestone at a
second meeting in Washington on March 14. On this occasion,
two personal checks, one from my wife in the amount of $2,000
and the other from me in the amount of $3,000, were also de-
livered to Mr. Stans. I did not attend that meeting either,
but understand that, as on the March 9 occasion, there was no
discussion with Mr. Stans as to the sources of the contribu-
tion. 57
DeYoung explained the source of the funds :
The cash used in making the contribution came from vol-
ume discounts from suppliers of Goodyear’s foreign subsidi-
aries. Such amounts were transferred to the United States
through normal banking channels from an account main-
tained in Switzerland. I was never personally involved in the
57 13 Hearings 5522.
466
handling of these discounts. I am advised, however, that for
a period of time prior to 1967, certain of our European sup-
pliers were directed to deposit volume discounts in an account
in a Zurich bank designated “Goyeda,” standing for Good-
year deposit account. From time to time amounts were with-
drawn from this account and kept under the control and
custody of an officer of the company in Akron. No discounts
were channeled into this account after 1967 when a new finan-
cial officer, B. M. Robertson, took over. The account itself was
finally terminated in 1970. There is no longer any cash from
this source in the custody of any company officials. The
amount used in making the contribution was never entered on
the company’s books as income, and it was never taken on its
tax return as a deductible expense. 58
Mr. DeYoung explained the next contact with Stans :
In April of 1973, Mr. Stans asked for the names of individ-
uals who had made the $40,000 contribution in March of 1972.
He stated that it was highly probable that the finance com-
mittee would eventually have to make public a list of the indi-
vidual contributors. He said that the committee records
merely showed that the contribution came from Goodyear
employees.
We first tried to get the money back, but Mr. Stans said
that was not possible. After further discussions within the
company, we decided to give Mr. Stans the names of eight
Goodyear executives, including my own, and divide the
$40,000 among the eight. This was done with the approval of
the executives but with a clear understanding that they would
not at any time become involved in any perjury.
We gave the names because we thought the company might
be harmed by the publicity if it became known that Goodyear
had, as a company, made a sizable contribution to either
political party.
Mr. Dorset. Did you personally ask the company execu-
tives if their names could be used in response to the request
by Mr. Stans?
Mr. DeYoung. I did.
Mr. Dorsen. And did each of the employees agree to have
his name utilized in this connection ?
Mr. DeYoung. They did, on the basis that they would not
become involved. 59
* * * * *
Senator Ervin. So he [Stans] was kindly supplied with the
names of eight men, corporate executives, who allegedly, or
rather were posing as donors of this money when they had not
given a single penny of it, is that not correct ?
Mr. DeYoung. That is correct.
Senator Ervin. So was that intended to — who was that
intended to deceive ? Somebody.
Mr. DeYoung. Well, really, it was a delaying action.
M Ibid.
“ 13 Bearings 5525 .
467
Senator Ervin. A delaying action ? That was given to Mr.
Stans so he could tell the court in the Common Cause suit
that?
Mr. DeYoung. No, when we were asked to confirm it we
denied that.
Senator Ervin. I know. But as I get it, you say these men
would not have gone and committed perjury. That had they
been summoned and given, required to take an oath telling
the truth they would not have committed perjury but they
were willing to have a false representation made that was not
under oath, is that not so ?
Mr. DeYoung. That is correct. 60
Later, when Goodyear received a letter from CRP attorney Kenneth
Parkinson asking for a confirmation of the information supplied to
Stans, Firestone wrote him stating that they could not confirm the
contribution as described. Shortly thereafter, Goodyear publicly de-
scribed the illegal source of the contributions and asked for and re-
ceived the return of the contributions.
DeYoung explained why cash was used for the contribution :
Senator Ervin. Now, I will have to be frank to say I don’t
find your statement, the reason that this company sent this
money in two payments of cash, very convincing. I spent a
large part of my life as a lawyer, and I did much work for
corporations and I have searched my memory in vain since
hearing your testimony and I don’t recall a single time that
a corporation ever paid me a single penny in compensation
for legal services except by check. So, wasn’t there some rea-
son different than the fact that you had cash that you paid in-
cash?
Mr. DeYoung. Cash has a tendency to get lost.
Senator Ervin. It particularly has a tendency to get lost
from view, doesn’t it, as compared to a check?
Mr. DeYoung. That’s right.
Senator Ervin. So I would find it more convincing if you
had stated that Goodyear sent this $40,000 of corporate funds
down here by cash in order to conceal the fact that it was
making a corporate donation. Now, is that not a fact?
Mr. DeYoung. That is right.
Senator Ervin. Yes, fine. And they could have transmitted
it down here — if it would have been a legitimate transaction
they would have transmitted it down here — in all probability
by either sending a letter down here with a check in it and
an 8-cent stamp instead of paying the transportation cost of
the vice president, to and fro, four times between Washing-
ton and England, would it not ? Would that not have been the
normal thing to do ? Either that or let the bank in England or
whatever other bank you had down here in Washington — let
them issue a check for it ?
Mr. DeYoung. That is normal business practice, yes. 61
Mr. DeYoung conceded that publicity motivated the disclosure of
the corporate contribution to the Special Prosecutor:
00 13 Hearings 5529 .
61 13 Hearings 5528 - 29 .
468
Senator Weicker. Did you step forward and volunteer in-
formation to the prosecutor after American Airlines did it ?
What motivated you to step forward at all ?
Mr. DeYoung. Because of the publicity we were getting
and we found out then that it was very, very serious, what
we had done.
Senator Weicker. Well, the degree of seriousness didn’t
change. It was serious when you did it. So it was a matter of
being discovered or the publicity that was of concern to
you?
Mr. DeYoung. That is right.
Senator Weicker. Has any judgment been passed on Good-
year?
Mr. DeYoung. There has.
Senator Weicker. What does that consist of ?
Mr. DeYoung. October 17, 1973, the Special Watergate
Prosecutor staff filed in the U.S. District Court for the North-
ern District of Ohio an information which charged both the
company and me with having committed misdemeanors in
violation of section 610 of title 18, United States Code, by
making and consenting to a $40,000 contribution in connec-
tion with the Presidential election of 1972. The company
and I pleaded guilty to the charges. Maximum fines which
were assessed by the court have been paid, both by the cor-
poration and myself.
Senator Weicker. What fines were assessed ?
Mr. DeYoung. $5,000 — the maximum fine was $5,000 to the
company and $1,000 to me.
Senator Weicker. And the shareholders all will be sharing
in the paying of the $5,000 fine, is that right ?
Mr. DeYoung. What do you mean ?
Senator Weicker. Well, the $5,000 fine was paid by the cor-
poration, so in effect, all the shareholders are involved in
paying the fine, is that right ?
Mr. DeYoung. That is correct.
Senator Weicker. Even though the shareholders weren’t
consulted as to whether or not they thought the reelection
of the President was in the best interest of the country. Nev-
ertheless, they are going to pay for the actions of you and
Mr. Firestone, Is that right ?
Mr. DeYoung. Well, they pay for all actions of the cor-
porate decisions that are made.
Senator Weicker. Well, I would say it is a pretty sorry day
for Goodyear, wouldn’t you ?
Mr. DeYoung. Not necessarily.
Senator Weicker. Of course, again, it is only a matter of
publicity, not of principle, that had you step forward and
has you before this committee, is that correct ?
Mr. DeYoung. That is probably correct. 62
13 Hearings 5529 - 30 .
H. Gulf Oil Coep.
Gulf Oil Corp., a company with annual revenue of $9 billion, prior
to April 7, 1972, made cash contributions of $100,000 for the reelec-
tion of President Nixon, and $10,000 to Senator Jackson and $15,000 to
Congressman Mills, respectively, for their campaign in seeking the
nomination as the Democratic candidate for President. Claude C.
Wild, Jr., vice president for Government relations of Gulf Oil Corp.,
stated :
[I]n early January or February [1971], a Mr. Lee Nunn
came to my office or visited and informed me that there was
being set up a Committee To Re-Elect the President and that
they would handle the campaign outside of the normal Re-
publican channel which he meant the Republican National
Committee, and Mr. Nunn was hopeful that I could ar-
range to get $100,000 in their hands one way or the other.
He suggested if I wanted some verification of his legitimacy
of his role in the operation because this was a new role for
him — lie had been up here, as you know, with the Republican
Senatorial Campaign Committee for any number of years,
and Mr. Nunn suggested that if I wanted verification for his
participation in this role, that he suggested that I contact
Mr. Mitchell because he was going to be active in the strategy
part of the campaign and Mr. Stans was going to handle the
finances. 63
Wild related that he and a friend, Jack Mills, met in the Justice De-
partment with then Attorney General Mitchell, who “indicated that
this was an operation such as the Committee To Re-Elect the President,
that Mr. Nunn was going to participate in that, that he had full con-
fidence in Mr. Nunn, and that is about it.” Wild was aware of the
importance of the April 7 date, “the day when the disclosure law be-
came effective.” 64
Wild stated that, without consulting anyone at Gulf, he decided
to give $50,000 and that “I had to find a place for the money — where
the money was, so I called the controller of one of our companies in
the Bahamas and told him I needed $50,000 and he brought it to
me.” 65 He explained that the man’s name was William Viglia and
that the company was the Bahamas Exploration, Ltd., a subsidiary of
Gulf which is no longer in existence, and that the. $50,000 was charged
to miscellaneous expense account. Wild related that Viglia delivered
the $50,000 in cash to him and that in April or May 1971, Nunn was
given the cash in Wild’s office. Wild stated that he was contacted
again by Nunn in January 1972 for an additional contribution:
Mr. Wild. Well, I think he came to my office again and in-
dicated that this would be a very expensive campaign and
that they wanted more money and he would like another
$50,000, making a total of $100,000, the implication being to
« 13 Hearings 5461.
111 13 Hearings 5462, 5467.
65 13 Hearings 5462.
470
me, and I cannot remember whether he made that exact state-
ment or not, but the implication was that this was kind of a
quota that they were expecting from large corporations.
Mr. Dorset*. What was the result of that meeting?
Mr. Wild. Well, he suggested that I might like to visit with
Mr. Stans about this, which I did. He set the appointment up.
This was — not my records but their records indicated that it
was the 4th of February, which was after — probably while
Mr. Stans was still Secretary of Commerce, but after he had
announced he was going to resign. I met with him for about
15 minutes.
Mr. Dorset*. What occurred at this meeting? First of all,
who was present ?
Mr. Wild. Just Mr. Stans and myself.
Mr. Dorset*. And what was said ?
Mr. Wild. Well, he indicated that he was hopeful of ob-
taining $100,000 from the large American corporations. Ours
being one of the top 10, he hoped that we would participate.
He knew of the previous $50,000, and he said he would like
$50,000.
Mr. Dorset*. What did you tell Mr. Stans ?
Mr. Wild. Well, I told him I would see about it.
Mr. Dorset*. What did you do after that?
Mr. Wild. I contemplated it a little further, and I guess I
made another mistake and said, “All right, I will do it.” So
I called Mr. Yiglia again and got the money, delivered it
personally to Mr. Stans. By that time, he had moved to his
office in the Committee To Re-Elect the President.
Mr. Dorset*. Did you deliver the money to Mr. Stans ?
Mr. Wild. I did, in person. 66
Wild was asked why he considered it necessary to make such a large
contribution :
Senator Ervin. You said you decided it would be in the
best interests of Gulf to comply with the request made by Mr.
Nunn after being requested to make a contribution. How did
you figure that ?
Mr. Wild. That was the decision I arrived at.
Senator Ervin. Yes. How did you figure that the best in-
terests of Gulf would be promoted by making a contribution ?
Mr. Wild. Well, Senator, you have to make decisions in
the context of the situation that existed at the time. I arrived
at the decision that if we were going to be treated in an equal
way, I knew other corporations were going to — a big effort
was going to be made, and if there was not some participa-
tion on my part or our part, we may be, you know — whether
you call it a blacklist or bottom of the totem pole, I would
just like to answer my telephone calls once in a while and that
may not happen sometimes. 67
Senator Montoya questioned Wild about the meaning of the term
“pressure” used by Gulf in a press release 68 issued at the time the com-
pany admitted making its illegal contributions :
w 13 Hearings 5463-64.
67 13 Hearings 5471.
68 13 Hearings 5808.
471
Senator Montoya. I will quote from this press release as
follows — third paragraph :
“These contributions were made in response to persistent
requests to Gulf’s Washington representative, Claude C.
Wild, J r., from representatives of the Finance Committee To
Re-Elect the President, The company was not seeking any
special favors and did not have any corporate activity under
Government, scrutiny.
“There was enormous pressure in the political system, and
the fact that others apparently also yielded is evidence of this.
This pressure was intense * *
Row, was Gulf Corp. correct in making this evaluation of
the kind of pressure that was applied ?
Mr. Wild. Well, we were talking in the release about pres-
sure in the whole political system.
Senator Montoya. How would they know about the other
pressures and not know about, the pressure that was applied
to you ?
Mr. Wild. This was written after they found out about the
pressures. I did not disclose any of this information to anyone
prior to
Senator Montoya. Well, were they not directing the context
of the statement to the pressure that was applied as a basis for
their corporate funds being used in the contribution? Was
that not the main thrust of this release ?
Mr. Wild. The first thrust of the release, I think, was that
there was pressure in the system on me as a representative of
the corporation.
Senator Montoya. Yes. Row, what kind of intense pressure
was applied to you by these individuals? Let us start with
Mr. Runn, and then let us continue with Mr. Stans.
Mr. Wild. I guess the wording here “intense pressure,” is
subject to various interpretations, but in my days, I consid-
ered it considerable pressure when two Cabinet officers and an
agent of one of the committees that was handling the election
asking me on various occasions that I have enumerated, the
times that I have enumerated ; asking me for funds — that is
just a little bit different than somebody collecting for the
Boy Scouts.
Senator Montoya. In other words, having been around
Washington for quite a bit, you read the message.
Mr. Wild. Well, I thought I had a message . 69
Responding to questions from Senator Ervin, Wild testified:
Senator Ervin. Mr. Wild, don’t you think it is very un-
fortunate that we have so much regulation of business in
America that business necessarily is susceptible of being co-
erced by people in authority to make a campaign contribution
which, if left to themselves, they certainly would not make?
Mr. Wild. I could not have said it better.
Senator Ervin. Don’t you agree that Congress should give
serious consideration to making it a criminal offense for any
69 13 Hearings 5479 .
472
official clothed with great governmental power to solicit or
receive a campaign contribution ?
Mr. Wild. Senator, I don’t think I would be prepared to go
quite that far. There is certainly the right of an individual
to do what he pleases with his money.
Senator Ervin. I agree with you on that. But this is a differ-
ent question, I think. Here, for example, is an Attorney Gen-
eral of the United States who has so much power and in large
part, discretionary power over American business
Mr. Wild. That is right.
Senator Ervin. And likewise the Secretary of Commerce,
which in many cases is discretionary in nature, that when he
requests a campaign fund, it is almost a coercive practice,
isn’t it ? It is quite close to is, isn’t it ?
Mr. Wild. Well, that is the way it came through by brain,
anyway. 70
Mr. Wild stated that sometime in the spring of 1973, he met with
Nunn, who informed him it may be necessary to disclose the names
of the pre-April 7 contributors and that Wild should be prepared to
give names. Wild testified as to what happened next :
Then Secretary Stans called me, and wanted to know how
the $100,000 contribution should be — he expressed again a
concern at this matter, he regretted it very much because
these contributions were supposed to be made where no dis-
closure would be made. He was very apologetic and so forth.
But at the same time, he said, it looks like we are going to
have to make a listing of these contributions made prior
to April 7. He asked me how I wanted it listed. I told him
that, well, I didn’t have any names to give him, so I said
Claude Wild & Associates. 71
Stans called Wild a second time, and Wild gave him the same
response :
Mr. Dorsen. Were you thereafter contacted with respect to
this information again?
Mr. Wild. The next contact I had was in a letter dated
July 9, 1973, from Mr. Kenneth Parkinson, who was the
counsel for the finance committee, asking me to verify the
fact that $100,000 contribution had been made and the proper
showing on their listing should be employees of Gulf Oil Co.,
Mr. and Mrs. Claude Wild. It was at that point that I thought
things were sufficiently of a serious nature that I arranged
a meeting with the chairman of the Gulf Oil Co., Mr. Dorsey,
and discussed this matter.
Then we obtained counsel in a short period of time, made a
disclosure, voluntary disclosure, to the then Cox committee,
and requested our money back from the Committee To Re-
Elect the President, which we did obtain. 72
In connection with the corporate contributions made to Senator
J ackson, Wild gave the following testimony :
70 13 Hearings 5474 .
71 13 Hearings 5466 .
72 13 Hearings 5466 .
473
As I recall the time frame, it was in early January, could
have been February of 1972, 1 was contacted by Mr. William
Brawley, Bill Brawley, who is on the staff of Senator Jack-
son. He called me two or three times. My intuition told me
what he was calling about. Finally, I agreed to meet with —
he wanted to arrange a meeting with me with Senator Jack-
son. Subsequently, that meeting did take place. I met with
Senator Jackson and his assistant, Sterling Munro.
At that time, Senator Jackson indicated that he was having
a difficult time raising money, and this w T as well documented,
at least by the press, and he was hopeful that I would be help-
ful. I told him I would see what I could do.
What I did was arrange, through the same sources, to get
$10,000 and delivered it to Sterling Munro. That is the last
I saw of Senator Jackson or Sterling Munro.
Mr. Dorset. Is it your testimony that Mr. Brawley called
you and contacted you for the contribution ?
Mr. Wild. That is my testimony.
Mr. Dorset. And is it your testimony that the subject of
money w T as discussed at the meeting that you just described?
Mr. Wild. No specific sum, but when you say, “a politician
says to someone, I hope you will be helpful,” you kind of
understand what that means.
Mr. Dorsex. But no sum was discussed at that meeting?
Mr. Wild. No sum was discussed . 73
Gulf Oil Co. and Wild were fined $5,000 and $1,000, respectively,
for making illegal corporate contributions to the Presidential cam-
paign of President Nixon. 74
I. The Hertz Corp.
In the fall of 1971, Donald Petrie, a former president of Hertz Inter-
national Division, retired from a New York investment firm and
became associated as a volunteer worker with the Washington, D.C.,
campaign office of Senator Edmund Muskie. In a committee interview
Petrie stated that, at the request of Deputy Campaign Chairman
George Mitchell, he had made arrangements with Hertz and Avis for
the leasing of rental cars to key Muskie campaign workers.
Petrie stated that the reason he sought an accommodation from the
car rental companies was the fact that the key Muskie campaign work-
ers were not being afforded the usual discount rate in renting cars,
were experiencing difficulty in obtaining reservations for rental cars,
and, because of the lack of credit cards, were being required to tie up
inordinate amounts of cash for the purpose of making rental car
deposits.
Petrie stated that he called Robert A. Smalley, then president of
the Hertz Corp., and requested special credit cards by which rental cars
might be made available with the billing to be held in abeyance until
the primary campaigns were ended. Petrie stated that he volunteered
to be a guarantor of the rental car bills.
73 13 Hearings 5464.
74 A contribution to the campaign of Congressman Mills , is discussed elsewhere in this
Report.
474
Smalley (now retired from the Hertz Corp.), in his appearance
before the committee on November 20, 1973, described the telephone
conversation with Petrie as being one in which Petrie asked if Hertz
could make available cars free of charge for the use of the Muskie
campaign. Smalley stated that he responded to Petrie’s inquiry and
told him that he could not provide free rental cars and that Petrie, as a
former Hertz corporate officer, should know that to grant such a re-
quest would be in violation of company policy. Smalley further testi-
fied that Petrie neither challenged his response nor gave any indica-
tion that his request had been misunderstood. Smalley stated that he
referred Petrie to Sol Edidin, the vice president and general counsel
of the Hertz Corp., and concurrently advised Edidin to assist Petrie
with his need for rental cars. Smalley stated that he did not provide
Edidin with any specific instructions, nor did he relate to Edidin his
understanding of the telephone conversation with Petrie. 75 At this
point it appears that Smalley and Petrie discontinued any participa-
tion in the matter and were not advised of any of the subsequent events.
Sol M. Edidin, who was granted immunity on November 13, 1973,
testified before the committee that upon the general instructions of
the Hertz Corp. president, Smalley, he did provide rental cars to
selected Muskie campaign workers, the names having been furnished
by Petrie. Edidin testified that he made rental car reservations through
his office and that the bills for these car rentals incurred by the desig-
nated Muskie campaign workers were sent directly to his office. He
stated: “I accumulated the bills anticipating that eventually they
would be written off by Hertz.” 76
By May of 1972, Edidin was holding car rental bills which, to the
best of his recollection, aggregated about $8,000 or $9,000, although
the amount billed was only $4,103.29.
Anticipating that he would terminate his employment with the
Hertz Corp. on or about June 1, 1972, Mr. Edidin addressed himself
to the problem of disposing of the Muskie car rental bills. He stated
as follows:
Shortly before leaving Hertz in May 1972 and in antici-
pation of my departure, I attempted to have the accumulated
bills in my possession written off. By this time Mr. Smalley
was no longer with Hertz. I went to the controller of Hertz
and asked that the bills be written off. While I do not recall
specifically my conversation with the controller, I believe
that I indicated generally to him that the bills were of a
political nature. The controller said that to write them off
might cause the auditors of Hertz’ parent corporation, RCA,
to question him about them. Accordingly, he refused to write
the bills off without specific direction of the chief executive
of Hertz.
Ronald Perman was then chief executive. I went to Mr.
Perman and told him about the rentals that had made on
the basis of Mr. Smalley’s instructions to me. I told him the
amount of the accumulated bills and that the controller would
not write them off without Mr. Perman’s authorization.
75 25 Hearings 12325-32.
76 Id. at 12254.
475
Mr. Perman, an accountant himself, recognized the con-
troller’s reluctance to write off the bills, but he also con-
sidered them to be an obligation of Hertz. Since the bills
could not be written off, it was necessary for Hertz to take
care of their payment in some way. Mr. Perman authorized
me to have Hertz provide funds to outside lawyers to enable
them to make contributions to the Muskie campaign com-
mittee in the total amount of the outstanding bills. 77
Edidin testified that he contacted six New York attorneys and one
Chicago attorney and asked each of them to send him a contribution
for the Muskie campaign. In return, he would approve the payment
of their bills for legal services in an amount sufficient to cover, not
only the amount of their contribution, but an amount 25 to 30 percent
more than the amount of their contribution for the purpose of reim-
bursing them for their income tax obligation. 78 Edidin stated that
seven attorneys participated, individually or through their partner,
by sending contributions in amounts ranging from $300 to $1,000 for
a total of $4,103.29. According to Edidin, the individuals for whom
he approved the payment of bills for which no services had been per-
formed were :
Amount of
Richard M. Ticktin, Esq. contribution
Edgar W. Malkin, Esq., 477 Madison Ave., New York, N.Y. 10022- $1, 000
Barton D. Eaton, Esq., 11 E. 44th St., Suite 1100, New York, N.Y.
10017 1,000
John L. Murray, Esq., Murray and Mewhinney, P. C., 235 Mama-
roneck Ave., White Plains, N.Y. 10605 300
Matthew L. Lifflander, Esq., c/o Weiss Bronston Rosenthal Hel-
ler & Schwartzman, 295 Madison Ave., New York, N.Y. 10017- 1, 000
Larsh B. Mewhinney, Esq., Murray and Mewhinney, P. C., 235
Mamaroneck Ave., White Plains, N.Y. 10605 300
Subtotal 3, 600
Attorney as to whom no evidence of reimbursement was
determined 500
Total 79 4,100
Though uncertain in his testimony concerning the exact dates and
amounts of the bills he approved for payment to the participating
attorneys, Edidin did identify certain bills and vouchers which he
testified bore the characteristics of bills paid for which no services
were performed. Each of the following bills identified by Edidin bore
his signature in approval of payment, the initials of Hertz board
chairman, K. J. Perman, were within the pertinent time frame, and
were in an amount compatible with his recollection regarding the
identity of the attorney from whom he solicited a contribution.
Name Amount Date
Edgar W. Malkin and Richard M. Ticktin (law partners). $1, 500 May 17, 1972
Matthew L. Lifflander 1,500 May 18,1972
Barton D. Eaton 80 __ , 950 May 22, 1972
John L. Murray and Larsh B. Mewhinney (law partners) 900 May 19, 1972
77 25 Hearings 11254-55.
78 Id. at 12241-42, 12246.
79 Id. at 12244-45, 12333-35.
80 Eaton testified that an additional bill in the amount of $500 was approved, for a total
of $1,450.
476
In an attempt to determine that there was a viable Muskie committee
to which the solicited contributions might be sent, Edidin testified
that :
(I) spoke with Matthew Lifflander, a former employee of
Hertz, then an attorney in private practice, who was active
in the Muskie campaign, and asked him to arrange that the
campaign committee would utilize any contributions provided
to pay the outstanding bills. 81
Edidin testified that he collected the contributions from the attor-
neys and that the checks were made payable to the name or names
of Muskie committees furnished by Lifflander. He gave the checks
which totaled $3,100 to Matthew Lifflander in May of 1972 and, at
the same time, asked Lifflander if he would contribute $1,000 so that
the full amount of the outstanding Muskie car rental bills could be
paid. Subsequently, Lifflander did provide to Edidin a check from
a Washington, D.C. Muskie committee payable to the Hertz Corp.
in the amount of $4,103.29. This check was dated May 30, 1972. Edidin
asserts that the difference between the $3,100 he gave Lifflander
and the $4,103.29 represents Lifflander’s contribution, although Edidin
has no personal knowledge regarding how Lifflander’s contribution
was made. 82
Testifying before the committee on November 19, 1973, Mr.
Lifflander stated that not only did he not submit a bill to the Hertz
Corp. for which no service was performed but that he did not make
any contribution subsequent to April 20, 1972, well before the plan
described by Edidin was formulated. He states that he told Edidin
in May of 1972 that he would arrange for his $1,000 contribution, made
on April 20, 1972, to be allocated to the payment of the Muskie car
rental bills and that he made no further contribution as a result of his
contact with Edidin. When asked about a report of the Muskie com-
mittee signed by Lifflander and filed with the GAO which lists him as
making a $1,000 contribution on June 7, 1972, Lifflander said that
the entry was a clerical error.
In his testimony, Lifflander also stated that in the spring of 1972,
Sol M. Edidin, then vice president and general counsel with Hertz,
called and asked him for assistance in collecting from the Muskie Cam-
paign Committee money to pay the Hertz car rental bills. Lifflander
referred Edidin to Stanley Goldstein, who was a volunteer worker
with the Muskie organization, handling the settlement of debts. 83
Subsequently, Edidin contacted Lifflander again and told him that he
had an agreement with the Muskie people in Washington that they
would pay the Hertz car rental bills if he (Edidin) succeeded in rais-
ing contributions in an equal amount to the outstanding bills.
Shortly thereafter (May of 1972) Lifflander met with Edidin in
his office and received from Edidin several checks payable to a Muskie
committee. At this meeting, Edidin told him that he' was about $1,000
short and requested that Lifflander contribute $1,000 to make up the
difference. Lifflander states that he told Edidin he had just contributed
$1,000 in April of 1972 and that, in view of his recent contribution, he
81 25 Hearings 12255.
82 There Is no evidence in the possession of the committee that Lifflander was involved in
the initial formation of the alleged plan to use corporate resources or that he spoke to the
other attorneys who allegedly participated in the plan.
83 25 Hearings 12263.
477
would ask the Muskie people to allocate that $1,000 contribution to the
payment of the Hertz car rental bills.
Lifflander said it was “probably” on the same occasion that he re-
ceived the Muskie contribution checks from Edidin, that he discussed
and received approval from Edidin for the payment of a legal bill m
the amount of $1,500. On June 1, 1972, Lifflander transmitted to Hertz
a Muskie committee check in the amount of $4,103.29.
Lifflander denied any participation other than receiving the con-
tributions from Sol Edidin and subsequently furnishing a Muskie
committee check in payment to Hertz.
Lifflander did submit a legal bill to the Hertz Corp. in May of
1972. The amount of this bill was $1,500. The explanation furnished
by Lifflander for this bill was that he was under contract to the
Hertz Corp. to provide a study on Hertz franchising. This contract
was entered into in the fall of 1971 ; and, as he began his work in 1972,
he realized that an independent section with regard to the laws ap-
plicable to franchises should be included in the study. On the day
that he met with Edidin to pick up the checks payable to the Muskie
committees, he explained to Edidin the need for this legal section in
the study he was doing. According to Lifflander, Edidin agreed with
him that a proper fee for this additional work would be $1,500.
Lifflander states he wrote a 43-page legal section, a copy of which has
been provided to the committee.
Lifflander denies that this $1,500 bill submitted to Hertz in May
of 1972 is in any way connected with, nor was the money used for,
the subsequent payment of car rental bills by the Muskie committee. 84
Gerald Shapiro, president of Hertz, testified before the committee
that in late 1971 he had engaged Matthew Lifflander to prepare a gen-
eral business report on franchising for the Hertz Corp. He stated that
the payment for the study was authorized by him in a total amount
of $5,000 — one third of which was to be paid in advance, and the re-
maining two thirds upon completion of the study.
Shapiro stated that no additional payments were authorized by him
and that, in his opinion, it would have been unusual for any Hertz
official who was not a party to the original contract to have authorized
additional payments to Lifflander. 85
Barton D. Eaton, a New York attorney who was alleged by Sol
Edidin to have been involved in the plan to raise campaign contribu-
tions for the purpose of paying Muskie car rental bills, testified before
the committee under grant of immunity on December 4, 1973.
Eaton corroborated the allegation made by Edidin that he had made
a contribution in the amount of $1,000 through Edidin to the “Muskie
Election Committee.” He stated that he had contributed a $500 check,
dated May 19. 1972, and that at his (Eaton’s) request, his wife also
contributed a $500 check to the Muskie Election Committee, and that
the date of her check was May 18, 1972. Eaton stated that, though his
recollection was unclear, he knows that he submitted bills to the Hertz
Corp. in a total amount of $1,450 — $1,000 of which was to reimburse
him for 1 his campaign contribution, and $450 of which would be allo-
cated for his income tax liability. Eaton stated that it was his recol-
lection that, rather than submitting one bill in the amount of $1,450
84 25 Hearings 12377-97.
85 Id. at 12398-99.
478
he had submitted two bills, one for $950 and the other for $500. Eaton
stated that he had no specific recollection with regard to the delivery
of the two $500 contributions ; however, he believes that he delivered
them directly to Edidin’s office and had given them to Edidin or to
his secretary.
The contribution checks supplied to Edidin by the Eatons were
made payable to the “Muskie Election Committee, as were all of the
other checks. These checks were deposited to the account of the “Mus-
kie Campaign Committee,” as evidenced by both the official reports
submitted to the U.S. General Accounting Office and by the letters
dated June 1, 1972, which Mr. Lifflander sent in acknowledgement of
the contributions.
All of the contribution checks obtained by Edidin were made pay-
able to the “Muskie Election Committee,”- — albeit erroneously in the
opinion of Lifflander — as was his $1,000 check dated April 18, 1972.
In connection with his $1,000 contribution check dated April 18, 1972,
to the “Muskie Election Committee,” Lifflander stated :
You see, whatever committee name was used, I could put in
any bank account. As indeed, my own check made out errone-
ously to Muskie Election Committee — and I found out today
there was no such thing as a bank account committee — went
into the Muskie for President. 86
To demonstrate that he made no contribution in May or June of
1972, Lifflander submitted hundreds of financial documents relating
to the Muskie campaign as well as his personal bank and other finan-
cial records.
An examination of the financial records provided the committee
of the Muskie Campaign Finance Committee by Lifflander reflected
no indication of a $1,000 contribution by him and, in fact, no unidenti-
fied items equal to or totaling $1,000. The only substantial items not
attributed to specific contributors were a deposit of $125 on May 11,
1972, and deposits of $500 and $100 on June 15, 1972. Lifflander also
provided what he averred were all his bank records for his personal
and law firm accounts during the relevant period. There was no check
to any Muskie committee in May or June of 1972, and there were no
checks payable to cash or other withdrawals that could be viewed
as the source of cash for a $1,000 contribution by him.
Matthew L. Lifflander submitted an affidavit dated April 19, 1974,
with oyer 100 pages of exhibits in support of his position. Lifflanders
affidavit notes that GAO reports attributed two contributions to him
to the Muskie campaign : $1,000 on April 20, 1972, and $1,000 on June
7, 1972. He continues :
It was not until after my testimony before the Select
Committee that I discovered I was listed on the GAO reports
as having made two $1,000 contributions to the Muskie for
President campaign during the year 1972. That is on April 20,
1972, and on June 7, 1972. The entry for June 7, 1972, was not
called to my attention either when i testified before the Select
Committee or before the Internal Revenue Service.
I want to take this opportunity to reiterate my categorical
denial that I made any contribution to the Muskie campaign
86 25 Hearings 12276 .
479
during the year 1972 , except for the contribution listed in my
name for April 20, 1972.
This contribution was clearly made at least 1 month prior
to my conversations with Mr. Edidin. It was made to the Mus-
kie for President campaign committee located in Washington,
D.C., and was mailed to the Washington campaign office. In-
deed it was listed in the GAO reports rendered by the Muskie
for President Washington campaign office.
The second $1,000 contribution which was allegedly made
on June 7, 1972, was simply never made by me and its inclusion
in the GAO report is in error. The source of the information
regarding this second contribution is the GAO reports ren-
dered by the Muskie committee in New York State of which I
was treasurer and which I signed. While my name appears
in that report as having contributed $1,000 on June 7. 1972,
the supporting bank and committee records clearly indicate
that such a contribution was neither made nor received. [Em-
phasis in original.]
On the subject of services provided by him to Hertz for the $1,500
Lifflander stated :
When I testified before the Select Committee, I stated that
when Mr. Edidin contacted me in May 1972, it was the first
time that I learned that he was leaving Hertz at the end of that
month. I, therefore, took the occasion of my meeting with him
to discuss a professional matter on which I was working for
the Hertz Corp.
In November 1971, I had been formally retained by the
Hertz Corp. to do a consultant’s study of the potential for ex-
panding corporate franchising activities. This study was con-
tracted for by a letter dated November 11, 1971, a copy of
which was previously supplied to the committee. The fee I was
to be paid for this study was in the amount of $5,000 of which
I was paid $1,500 retainer on December 28, 1971. As this study
proceeded during the fall of 1971, and the first half of 1972,
it became obvious that in order to make the study complete,
extensive legal research and analysis with regard to a survey
of the existing laws affecting franchising in several States
needed to be included in this study. As the letter agreement
with the Hertz Corp. will indicate, no such legal analysis was
agreed to at that time. This w T as so because the need for such
legal research and analysis was not apparent to either me or
Hertz when we originally entered into the contract. I, there-
fore, discussed with Mr. Edidin in his capacity as general
counsel of the Hertz Corp., the need for additional compensa-
tion for me in order to complete the legal phase of this study.
Mr. Edidin agreed that this was necessary and that an amount
of $1,500 would be fair compensation and that this sum be
paid as an additional retainer.
Edward W. Malkin, an attorney referred to by Edidin as having
made a reimbursed contribution of $1,000, submitted the following
statement to the committee concerning his alleged involvement :
35-687 0 - 74 - 32
480
I wish to advise the committee that, as to any moneys re-
ceived by me from the Hertz Corp. in May 1972, 1 had no per-
sonal knowledge that the receipt thereof was part of any such
arrangement. Accordingly, if such arrangement existed, I
could not and did not knowingly participate in it.
Malkin’s partner, Richard Ticktin, through his attorney, called
to the attention of the committee that, “Mr. Ticktin is an attorney
with an unblemished reputation in the community and at the bar,
and to refer specifically to him in the report would undoubtedly have
severe and potentially prejudicial after-effects upon him, his family
and his career . . . [The] testimony, by various of the principals
involved, is unclear, equivocal and contradictory.”
John L. Murray and Larsh B. Mewhinney, law partners in White
Plains, N.Y., each of whom was alleged to have made a $300 contribu-
tion reimbursed by Hertz, submitted affidavits which recited that they
left the Hertz Corp. to practice law early in 1973 and that Hertz
has throughout been one of the firm’s principal clients. Murray’s
affidavit continues :
Mr. Edidin has testified before this committee that in May
1972 he asked various attorneys, including Mr. Mewhinney
and me, to contribute certain sums to the Muskie campaign
committee. There is no dispute about that. The donations made
by Mr. Mewhinney and me, and the manner in which they
were made, are matters of record. They were personal dona-
tions in every sense. However, Mr. Edidin has further testified
it was his intent that the attorneys he contacted would sub-
mit for his approval bills for services not actually rendered,
as a means of obtaining reimbursement, and that he com-
municated this intent to the attorneys at the time. To the best
of my recollection, no such intent or plan was communicated
to me by Mr. Edidin or anyone else. 1 categorically deny the
implication that I participated in any such scheme, and like-
wise deny that my firm ever submitted a bill for services not
rendered to the Hertz Corp. or any other client.
5. Mr. Lifflander has testified before this committee with
reference to a research project he had undertaken for Hertz,
on which he was working at the time of these events. Mr. Lif-
flander’s testimony as to his consultations with Mr. Mewhin-
ney and me at about that same time, and to the services we
rendered in connection with his final report on the subject
to Hertz, is completely factual. Our daily time sheets, diary
entries, expense reports and other office records, all con-
temporaneously made, fully substantiate Mr. Lifflander’s
testimony in this respect, and in fact provide further details,
consistent in all respects with his testimony, that he was
apparently unable to recall.
6. In summary, I have never been reimbursed for my con-
tribution to the 1972 Muskie campaign in any form or man-
ner whatsoever, and never sought or expected to be reim-
bursed. My firm has never submitted a bill to or received
payment from the Hertz Corp., or any other person or entity,
for other than bona fide professional services actually ren-
481
dered, and expenses and disbursements actually incurred in
the cl ient’s behalf.
Mewhinney’s affidavit substantially adopts the affidavit of Murray :
2. The facts recited by Mr. Murray are correct to my per-
sonal knowledge and if 1 were called as a witness, I would so
testify. I have no direct personal knowledge, however, of what
was said by Mr. Murray and Mr. Edidin in their telephone
conversation initiated by Mr. Edidin and suggesting we make
a political contribution.
J. Lehigh Valley Cooperative Farmers, Inc.
Lehigh Valley Cooperative Farmers, Inc. (“Lehigh Valley”), a cor-
poration based in Allentown, Pa., representing nearly 1,000 dairymen
in Pennsylvania, New Jersey and Maryland, made a $50,000 political
contribution from its corporate funds in April 1972 to the President’s
campaign in exchange for the appearance of Agriculture Secretary
Earl Butz at the cooperative’s annual dinner in April 1972. The cor-
porate contribution was made in cash and was subsequently covered
up by certain co-op officials, and it was not publicly reported by the
Finance Committee To Re-Elect the President until more than a year
later. Receipt of the contribution and the- Secretary’s appearance were
arranged with the knowledge of top campaign officials, including Ma-
gruder and possibly Mitchell, and the cash went: to a secret fund used
by LaRue to pay the original Watergate defendants. In connection
with this contribution, the cooperative and former co-op officials,
Richard L. Allison and Francis X. Carroll, have pleaded guilty to
violating Federal law prohibiting corporate political contributions.
This matter is discussed in greater detail below.
In early 1972, on behalf of Lehigh Valley, Francis X. Carroll, its
Washington, D.C., representative, extended an invitation to Vice Pres-
ident Agnew to attend the co-op's annual shareholders’ dinner meet-
ing scheduled for April 20, 1972. 8ea According to Richard L. Allison,
then president and general manager of the co-op, Carroll told the co-op
board of directors that $35,000 was needed to secure the Vice Presi-
dent’s attendance, and the board approved an “honorarium” of that
amount for the Vice President.
The Lehigh Valley invitation to the Vice President was approved
by John Mitchell. 87 However, the Vice President was already sched-
uled to make several political appearances in that area, and his office
notified the co-op that he would be unable to attend the meeting.
Carroll apparently would not take “No” for an answer. After receipt
of the Vice President’s refusal letter, Carroll contacted certain Mem-
bers of Congress to obtain their support in his efforts, directly refer-
ring, in at least one instance, to a possible contribution. In a letter
dated February 28, 1972, to Senator Hugh Scott, Carroll explained his
sea previously, the co-op had extended a dinner invitation to President Nixon who had
declined. There is no evidence that this invitation was in any way connected to the
contribution.
87 According to John Damgard, then assistant to the vice president for scheduling and
appointments, invitations for campaign appearances by the President or Vice President in
1972 were first reviewed by Mitchell or Jeb Magruder. Damgard also told the Select Commit-
tee staff that if an invitation also involved fundraising, it was reviewed by Stans, too, but
he could not recall whether Stans reviewed the Lehigh Valley invitation.
482
attempt to secure the Vice President and stated that Allison had au-
thorized him to contribute $30,000 to the Republican National Com-
mittee and/or the President’s reelection campaign. Senator Scott’s
office passed on the request to the CEP scheduling office, under the
direction of Herbert Porter, who in turn assigned the matter to his
assistant, J. Curtis Herge.
Herge coordinated the surrogate program, which involved a total
of 35 Cabinet officers, Senators, Congressmen and Federal agency of-
ficials making political appearances in the 1972 campaign as surro-
gates for the President. As part of his responsibilities for the surro-
gate program, Herge was responsible for scheduling in the 1972 pri-
mary States, one of which was Pennsylvania, whose Presidential pri-
mary was to be held on April 25 — 5 days after the scheduled co-op
dinner.
Herge says that when he was assigned the Lehigh Valley matter, he
contacted Curtis Uhre, one of Senator Scott’s aides, who informed
him that Carroll was offering $100,000 for an appearance by the Vice
President. Although Uhre denies knowing of an offer of $100,000 or
any other amount directly in exchange for such an appearance, he
acknowledges that Carroll implied to him that a contribution would
be made later, if he was successful in obtaining Agnew’s appearance.
Herge says he reported the offer to Magruder, who apparently took
an increased interest in Lehigh Valley’s request. John Damgard, Mr.
Agnew’s scheduling aide, says that 4 or 5 days before the April 20
dinner, Magruder asked him to see if the Vice President would recon-
sider his earlier refusal and attend the dinner, calling the invitation
a “high priority.” Damgard does not recall if Magruder specifically
referred to the contribution. In any event, the Vice President again
refused.
On or about the 20th, a last-minute effort was made to secure a
substitute speaker for Agnew. Herge says that when he notified
Carroll that the Vice President could not attend, Carroll told him
that for someone of less prominence the contribution would not be
$100,000 but would be smaller — from $35,000 to $75,000. According
to Herge, Carroll offered to contribute the money to the RNC, but
Herge says he instructed him that the money would go to FCRP.
Herge then contacted several surrogates, and only Secretary of
Agriculture Earl Butz did not flatly refuse. Herge says that he checked
with Carroll, who told him that the $35,000 to $75,000 offer was still
open for someone such as Secretary Butz. Herge then notified
Magruder, who said he would talk to Mitchell to convince Butz to make
the appearance. Later that day, Herge was notified by Magruder that
Butz had indeed agreed to attend the dinner, and that Herge was to
ask Carroll for $50,000. 88 Herge says Magruder told him “don’t let it
fall through.”
Herge did not. He says he called Carroll and told him Butz would
attend the affair that evening, and he “recommended” a $50,000 con-
tribution. According to Herge, Carroll said it would be in cash but
that he only had $25,000 available for delivery that day.
88 Herge did not explain why Magruder set the amount at less than the maximum allegedly
offered by Carroll — $75,000.
483
Carroll has given Federal investigators a different account of these
contacts with Herge. 89 Carroll says that Herge contacted him and
told him Lehigh Valley would have to pay $100,000 for Agnew but
that he “vigorously” refused this offer. On April 19, Herge allegedly
told him that Agnew could not attend but that Secretary Butz could
for $50,000 in cash — $25,000 on the day of the dinner and $25,000
immediately thereafter. Carroll says that he “reluctantly” agreed.
Whoever generated the idea of a $50,000 contribution in exchange
for Butz’ appearance, it is undisputed that it was made in cash during
the ensuing week or two. On the afternoon of the 20th, before depart-
ing Washington for the dinner, Carroll delivered $25,000 in cash to
the messengers sent by Herge — James McCord, the CRP security of-
ficer, and William Minshall, a CRP employee — and then met Secretary
Butz at the airport and accompanied him to Allentown, the site of
the meeting. Don Brock, Butz’ assistant who accompanied him to the
dinner, says that both he and the Secretary were aware that the Lehigh
Valley people had made a contribution but that they were not aware
of the source.
The $25,000 was given to Porter, who kept it in his office safe at
CRP. Herge says that following the dinner, at Porter’s insistence, he
contacted Carroll several times about the remaining $25,000. According
to Herge, Carroll finally made the second $25,000 cash payment in
early May 1972, to Herge at CRP headquarters.
Carroll obtained both $25,000 payments from the corporation in the
form of checks payable to him, which he cashed. Allison approved both
payments ; authorization for the second payment was never sought or
obtained from the board.
George Buchanan, Lehigh Valley’s former comptroller, asserts that
an effort was made to conceal the contribution for approximately
1 year by disguising the payment in the company’s records. The con-
tribution was charged to corporate expense accounts, and at one point
was even treated as a loan to Carroll. Although Allison says he insisted
that the second payment be treated from the outset as a loan to be
repaid by Carroll from monthly retainer payments of $3,000 from the
co-op, no note was obtained from Carroll until June 1973 — more than
a year later and after publicity about the matter arose — and Buchanan
says that the payment was never recouped from Carroll.
The cash contribution was also not reported by the President’s reelec-
tion campaign organization until more than a year after its receipt.
According to Porter and Herge, Magruder said that Stans wanted the
money to go to FCRP, and they transferred it to Hugh Sloan, treasurer
of FCRP, almost immediately after the second payment was delivered
by Carroll in May 1972. In October, Stans asked Herge about the con-
tribution, and Herge explained it to him. Herge says that at that point,
Stans said, “Oh yes, that must be the money Sloan told me
about. We will have to return it, because it’s corporate money.”
80 Although Carroll has already pleaded guilty, on May 28, 1974, to aiding and abetting an
individual to commit a violation of 18 United States Code section 610 prohibiting corporate
political contributions, his attorney has informed the Select Committee staff that Carroll
would refuse to testify before the committee on the ground of the fifth amendment privilege
against self -incrimination. Carroll’s statements in this report are based upon a “Contact
Memo” dated July 17, 1973 and written by a GAO investigator who interviewed Carroll.
484
Herge and Porter both deny any knowledge that the money came
from corporate funds. They say that they understood that a wealthy
member of the Pew family, of the Sun Oil Co. and connected with
Lehigh Valley, had donated the funds and that they briefly referred
to that fact at the time of the transfer to Sloan in May 1972. Sloan
says that Porter told him only that the money was contributed through
a Washington attorney, 90 by a donor who wanted to remain anonymous.
Sloan says that he asked Stans in May 1972 about reporting the
contribution but that he was unable to obtain any further informa-
tion. Accordingly, he did not include it in the May 31 FCKP report
to GAO or in subsequent reports. The money, together with an addi-
tional $31,000 cash, was transferred to LaKue in July 1972, shortly
after the Watergate break-in, most of which was later paid to the
original Watergate defendants. 91
Despite Magruder’s and possibly Mitchell’s involvement in the con-
tribution in April 1972, and Stans’ knowledge of it no later than
October and possibly as early as May 1972, 92 the contribution was
not reported by FCKP to GAO, as required under the Federal Elec-
tion Campaign Act of 1971, until June 10, 1973. Thereafter, Federal
authorities investigated the contribution, Allison and Carroll left
Lehigh Valley and, in May 1974, Lehigh Valley, Allison and Carroll
pleaded guilty to violating Federal law prohibiting corporate cam-
paign contributions. On May 6, 1974, Lehigh Valley pleaded guilty
to one count of violating Federal law prohibiting a corporate cam-
paign contribution (18 TT.S.C. 610) and was fined $5,000. On May 17,
1974, Allison pleaded guilty to a nonwillful violation of the same law
and was fined $1,000, which w T as suspended, and Allison was placed
on unsupervised probation for 1 month. On May 28, 1974, Carroll
pleaded guilty to a nonwillful violation of aiding and abetting an
individual to violate the same law and was placed on unsupervised
probation for 1 month.
K. Minnesota Mining & Manufacturing Co.
Minnesota Mining & Manufacturing Co., better known as 3M,
made contributions from corporate funds to three Presidential can-
didates during the 1972 campaign. President Nixon’s reelection bid
received two contributions, one of $6,000 and the other $30,000, while
two Democratic contenders, Hubert Humphrey and Wilbur Mills,
received $1,000 each.
As related by 3M officials in staff interviews, the moneys used in
these transactions came from a secret cash fund kept in the safe of
Irwin Hansen, 3M’s vice president of finance. Although a political
fund has been in existence at 3M since the 1950’s, the fund under Han-
sen’s custody had its origin in 1964. At that time, Hansen was requested
by Burt S. Cross, then president and chief operating officer of 3M, to
find a new method for raising funds for “public relations.”
90 Carroll represented himself to Lehigh Valley officials, and possibly others, to be a
lawyer, although he is not.
91 See 2 Hearings 546-48, 702 ; 5 Hearings 2108 ; 6 Hearings 2289-91.
92 Both Porter and Herge say that they understood that Magruder had informed Stans
of the contribution in May 1972, shortly after its receipt. Stans testified before the commit-
tee in its public hearings that the only cash contribution to FCRP after April 7, 1972 until
June 23, 1972 was the $50,000 from Lehigh Valley but that he did not learn of the contri-
bution until October 1972 (2 Hearings 710), although Stans and Sloan personally trans-
ferred that money (plus $31,000 more) to LaRue in July 1972. (2 Hearings 547.)
485
The initial method used to raise money for the political contribution
fund was obtained by overstating prepaid insurance. This was accom-
plished by withdrawing money from a corporate bank account and
debiting an internal insurance account. The funds were transferred to
a Swiss bank using regular commercial banking procedures. The
funds held on deposit were withdraAvn as required.
In 1967, according to Hansen, he and Cross decided that a new
source was needed. They met with Dr. T. Gutstein, a Swiss attorney
and consultant for 3M. It was proposed that Gutstein submit false
billings for services to 3M and, after payment, return the proceeds
in cash to Hansen. Gutstein agreed to provide the funds, although he
was not told of the intended use.
In the fall of 1967 Hansen said he requested $25,000 from Gutstein
who sent 3M a billing for that amount. Hansen approved payment, a
check was issued, and Gutstein returned the proceeds in $100 bills to
Hansen by insured mail. In April 1968 and May 1969 similar trans-
actions took place, each involving $50,000. After the $125,000 was
raised through Gutstein in 1969, Hansen stated that he told Cross
that this method of raising money should be discontinued. He related
that at that time he believed that only he and Cross were aware that
the fund consisted entirely of corporate funds.
In November 1970, Harry Heltzer became chairman of the board and
chief executive officer. Hansen informed Heltzer of the existence of the
fund but not of its source. He explained to Heltzer that all expenditures
from the fund required the chairman of the board’s approval. In an
affidavit given to this committee, Heltzer said, speaking of the fund,
that when the 1972 contributions were made, “I was not aware of its
origin” and “while I had strong suspicions that the fund contained
corporate funds, I did not make an inquiry as to its source, probably
because I did not want to know the answer.”
On November 2, 1971, moneys from the corporate fund were used
to purchase six $1,000 tickets to a “Salute the President” dinner. The
second contribution — of $30,000 — to the Nixon campaign is described
in Heltzer’s affidavit :
On March 26, 1972, a contribution was made from corporate
funds to the Committee To Re-Elect the President when
Wilbur Bennett, 3M’s director of civic affairs, delivered $30,-
000 in cash to Mr. Maurice Stans. About March 1972, Mr.
Bennett and Mr. Stans had a conversation during which the
latter suggested that 3M executives consider giving a contribu-
tion to the Committee to Re-Elect the President. In a later
conversation Mr. Stans suggested to Mr. Bennett that the
contribution be in an amount between $75,000 and $100,000,
which amount was comparable to anticipated contributions
from other enterprises about the size of 3M. Mr. Bennett tells
me that at no time did Mr. Stans assert any overt pressure on
him for any contribution nor was I at any time ever aware of
any such pressure. I never did discuss this contribution with
Mr. Stans.
About March 15, 1972, Bennett discussed Stans’ request
with me. We agreed that the amount requested was excessive
in the light of previous contributions to the Nixon campaign
by 3M executives and the fact that another fundraiser for the
486
President was scheduled for the fall of 1972. We decided that
the $30,000 balance would come from a political contribution
fund in the custody of Mr. Hansen, director of finance.
Heltzer initialled an authorization for Hensen to give Bennett
$30,000 in cash. On March 26, 1972, Bennett met with Stans in his
St. Paul, Minn., hotel suite. At that time he delivered to Stans the
$30,000 in cash along with a $3,000 check drawn on the personal
account of Heltzer. Subsequently, about $15,000 in contributions from
other 3M executives was forwarded to the Committee To Re-Elect the
President.
In the Spring of 1973, when it became apparent that the Common
Cause suit would require disclosure of all pre-April 7, 1972 contribu-
tions, Stans requested a meeting with Bennett. According to Helt-
zer’s affidavit, the following events took place.
On May 22, 1973, Bennett met with Stans in Washington pursuant
to his request, and Stans informed him that it was imperative that
he have a list of the names of the persons identified with the $30,000
contributions.
Bennett returned to St. Paul and drew up a list of 29 persons as-
sociated with 3M who had made political contributions in the past
and arbitrarily allotted a specific amount to each name. The persons
who were named in the list were, of course, not the source of the funds,
and they had not been consulted concerning the use of their names.
Bennett sent the list to Stans the first week of June.
On July 8, 1973, Kenneth Parkinson, the attorney for the Commit-
tee To Re-Elect the President, communicated a request to Bennett to
confirm the accuracy of the previously disclosed list.
Bennett informed Heltzer of the situation, including the arbitrary
preparation of the list. Heltzer ordered the legal staff to conduct an
investigation into the source of the Hansen fund. They employed
outside counsel, and it was ascertained that corporate funds were
involved.
At 3M’s request the $30,000 cash contribution was returned by the
Finance Committee To Re-Elect the President. No other requests have
been made by the company for the return of corporate funds illegally
contributed.
On October 17, 1973, 3M Corp. and Harry Heltzer entered pleas of
guilty to violation of the Federal Corrupt Practices Act. The com-
pany was fined $3,000 and Mr. Heltzer $500.
3M officials have indicated that $136,000 was remaining in the fund
and that it has since been returned to the company. 93
L. Northrop Corp.
On May 1, 1974, in U.S. district court, Washington, D.C., Northrop
Corp., a major Government defense contractor, admitted that $150,-
000 in corporate funds had been used in making contributions to the
Nixon reelection campaign during 1972. In addition to the corpora-
tion, two of its officers, Thomas Y. Jones, chief executive officer, and
James Allen, vice president and assistant to the president, each en-
tered a plea of guilty to violations of the law in connection with the
disbursements of corporate funds for political contributions. The
93 The contributions to the campaigns of Senator Humphrey and Congressman Mills are
discussed elsewhere in this Report.
487
information contained in the indictments to which the defendants
pleaded guilty is in direct contradiction with the information sup-
plied by Jones. Allen and others to this committee during the fall
of 1973. 94
The transaction, as it now evolves, 95 was initiated on February 18,
1972, when Jones was approached by a group consisting of Herbert
Kalmbach, Maurice Stans, and Leonard Firestone, chairman of the
California FCRP. They asked Jones to make a “sizable contribution”
to the President. Jones, anticipating such a solicitation, had previ-
ously discussed with Allen what an appropriate contribution should
be. Jones told the fundraisers that he would contribute $50,000. How-
ever, they made it apparent that $50,000 would not be considered an
appropriate amount and that a person in Jones’ position was ex-
pected to contribute $100,000.
Immediately following this meeting, Jones and Allen met to dis-
cuss how $100,000 could be raised. They decided to seek a foreign
source and in that regard contacted Stanley Simon, of Simon & As-
sociates of New York City. Simon is a “management consultant,” or
as he put it in a staff interview, a “doctor for corporations.” Simon
told Allen he thought something could be arranged through William
Savy, a European business adviser for Northrop, who had, for a
number of years, been remitting a portion of the Northrop money
} ie 61 V C d
In late February 1972, Savy was paid $120,000 by Northrop. The
supporting voucher lists the payment as “additional fees and other
compensation.” Savy, per instructions, then had 20 checks of $5,000
each drawn on his account at the International Bank of Luxembourg.
The checks were made out to FCRP committees, the names of which
had been furnished to Jones by Stans.
On or about March 16, 1972, Jones received the 20 checks totaling
$100,000. The $100,000 was given to Nixon reelection committees in
two deliveries, one of $50,000 to Leonard Firestone in mid-March 1972
and the second, also $50,000, by Jones to FCRP headquarters in
Washington, D.C., on April 5, 1972.
Sometime in late July 1972, after Kalmbach had been requested by
certain White House officials to raise money for payments on behalf
of the original Watergate defendants, Jones said he was called by
Kalmbach. Kalmbach advised him that there was a need for additional
94 In September 1973, committee questionnaires, for corporate officers and individuals,
were sent to Jones and James Wilson, senior vice president, finance. The questionnaires were
returned signed and dated September 21, 1973. Question 6 in the corporate officer question-
naire asked :
“Did any of your companies make any contribution out of corporate funds, directly or
indirectly, to any political candidate, committee for a candidate, political party or firm or
person on behalf of any political candidate, committee, or party in the 1972 Presidential
Campaign?” .... n
To this Jones answered, “No as to Northrop Corp. and its subsidiaries’ and Wilson
replied “No as to the best of my knowledge and belief.” Jones claimed that he contributed
$98,000 to the Nixon reelection effort, and Wilson stated he made a $20,000 donation.
During October 1973, Allen, Jones, Wilson, and F. W. Lloyd, another corporate vice presi-
dent, made themselves available for unsworn staff interviews. All of these men maintained
that they had no knowledge of any contributions from corporate funds. At that time these
men represented their pre-April 7, 1972, contributions as follows :
Tom V. Jones, president, $45,000; James Allen, vice president in charge of finance and
treasurer, $15,000; F. W. Lloyd, vice president in charge of operation, $20,000; James
Wilson, vice president, $20,000 ; total $100,000.
In addition to this committee, Jones, among others, also represented to the GAO, the
FBI, and the grand jury that the $100,000 contribution was part of a personal commitment
unrelated to the corporation. Jones represented that the post- April 7 contribution of $50,000
came from a personal cash fund which he kept. _
95 The facts recited herein are based primarily on a written account furnished by defend-
ants’ counsel to the Select Committee following the guilty pleas, as well as interviews con-
ducted by committee staff in October 1973.
488
funds and asked if he could come by to discuss this need. On or about
July 31, 1972, Kalmbach and Jones met in Jones’ office. Kalmbach told
Jones he had a “special need,” and Jones agreed to an additional cash
contribution. At this time both Jones and Allen were holding other
cash funds which had been obtained from Savy. Jones took $25,000
of these funds which were in his possession and asked Allen to put
in an additional $25,000, from the fund which he was holding and
delivered the $50,000 in cash to Kalmbach. The entire $50,000 repre-
sented Northrop corporate funds. J ones was assured by Kalmbach that
this payment would be treated secretly and anonymously. There is no
evidence that Jones was aware of the purpose for which this money
was used.
Shortly before the election, when the Common Cause suits to disclose
pre- April 7, 1972, contributors was gaining momentum, Jones became
alarmed that the initial $100,000 contribution might be publicly dis-
closed. Also, about the same time, newspapers reported a congressional
investigating committee had traced $30,000 in Luxembourg checks,
obviously a portion of the Northrop contribution, to the Republican
campaign. Kalmbach approached Jones on November 6, 1972, and
related that officials of FCRP were concerned that the contribution
was from corporate funds. Kalmbach offered to return the contribu-
tion, if this was the case, but Jones emphatically denied corporate
funds were involved.
Sometime during this period, Jones began to conceive a plan to con-
ceal the corporate origin of the $100,000 contribution, which was put
into effect and related to this committee in late, 1973 as the true facts.
In late 1972, Jones went separately to Allen, Wilson, and Lloyd and
asked that each of them subscribe to a substantial portion of the
$100,000 contribution. It is not completely clear just what the under-
standings were among Jones and Wilson and Lloyd. Wilson says that
he was asked to commit only a contingent maximum of $20,000 and
that he would not actually have to contribute that much if Jones suc-
ceeded in persuading others to join the contribution. Lloyd understood
Jones initially to ask simply that he “front” for a $20,000 portion of
the contribution, should it be publicly disclosed, because of the public
relations problems in explaining such a large personal contribution
by Jones.
J ones and Kalmbach met again a short time later. The $100,000 con-
tribution was again discussed and Jones, as before, represented that
the $100,000 was not corporate money. In addition to Kalmbach, attor-
neys for FCRP were also in contact with Jones’ attorney as a result of
the Common Cause suit. Apparently, as a result of these contacts, Jones
decided that it was necessary to prepare bogus documentation to sup-
port this newly fabricated plan.
Jones had Wilson, Lloyd, and Allen prepare promissory notes back-
dated to February 28, 1972, and payable to Thomas Jones on February
28, 1973. The Wilson and Lloyd notes were for $20,000, and Allen’s
was for $15,000. Jones prepared a promissory note to William Savy
for $100,000 at 9 percent per annum, which was also backdated to
February 28, 1972, and payable on February 28, 1973. Other support-
ing documents were also readied.
J ones and Allen agreed that they would represent the prior transfer
of $120,000 to Savy as an advance made in contemplation of substan-
tial new efforts that Savy would be undertaking to market a particu-
489
lar Northrop aircraft to NATO countries. Allen and Jones also ar-
ranged with Savy that the $100,000 advance to Jones would be repaid
and that Savy would return the unused portion of the $120,000. In
two yearend transactions, Savy and one of his European companies
returned a total of $94,000. Correspondence was prepared to explain
this return of fluids as the result of a failure of the contemplated
marketing effort.
Jones then traveled to Washington where he presented an FCRP
attorney with the bogus documentation supporting the contribution.
Prior to February 28, 1973, Jones paid his note to Savy, and the
three Northrop officials paid their notes to Jones. Jones and two other
officials obtained the funds to repay their notes by taking out short-
term loans from local lending institutions, and the other official with-
drew funds from his account in a local savings and loan institution
to cover his obligation.
On several occasions subsequent to their $20,000 payments to J ones,
Lloyd, and Wilson came to Allen — not Jones — to seek at least a partial
reimbursement for their outlays. On March 15, 1973, Allen decided
on his own, and without consulting Jones, to provide each man with
$12,000 in cash from the Savy fund. He cautioned them to be discrete
in depositing the money and told them there would be no further reim-
bursement.
• Northrop Corp. and Jones were indicted under sections 2 and 611,
title 18, United States Code, for consenting to the use of $150,000 in
corporate funds for political contributions. Both were fined $5,000.
Allen was indicted under section 610, title 18, United States Code for
consenting to the payment of $24,000, $12,000 each to Wilson and
Lloyd, from corporate funds. Allen was fined $1,000. Northrop and
Jones are the first contributors to be charged under 18 U.S.C. 611
which prohibits contributions by corporations doing a substantial
portion of their business with the Government. 96
M. Phillips Petroleum Co.
In February and March 1972, W. W. Keeler, who was then chair-
man and chief executive officer of the Phillips Petroleum Co., made
contributions totaling $100,000, from the corporate funds of Phillips,
to the Finance Committee for the Re-Election of the President, as a
result of solicitations by Maurice Stans and others.
Keeler has been quite active in a number of general business and
petroleum industry organizations. For example, in 1970 he was chair-
man of the National Association of Manufacturers, has worked with
the U.S. Chamber of Commerce, and has been active in the American
Petroleum Institute, the National Petroleum Council, and the Adver-
98 Section 611. Contributions by firms or individuals contracting with the United States.
Whoever, entering into any contract with the United States or any department or agency
thereof, either for the rendition of personal services or furnishing any material, supplies, or
equipment to the United States or any department or agency thereof, or selling any land or
building to the United States or any department or agency thereof, if payment for the per-
formance of such contract or payment for such material, supplies, equipment, land, or
building is to be made in whole or in part from funds appropriated by the Congress, during
the period of negotiation for, or performance under such contract or furnishing of material,
supplies, equipment, land, or buildings, directly or indirectly makes any contribution of
money or any other thing of value, or promises expressly or impliedly to make any such
contribution, to any political party, committee, or candidate for public office or to any
person for any political purpose or use : or
Whoever knowingly solicits any such contribution from any such person or firm, for any
such purpose during any such period —
Shall be fined not more than $5,000 or imprisoned not more than 5 years, or both.
June 25, 1948, c. 645, 62 Stat. 724.
490
tising Council and a member of the Military Petroleum Advisory
Board for 9 years.
Primarily as a result of his active role in these organizations, Keeler
had fairly frequent contact with Stans while the latter was Secre-
tary of Commerce. Keeler recalls a particular conversation with Stans
which occurred in the latter part of 1971 following a meeting between
Stans and a group from the NAM. 97 Stans told him at that time that
he would be leaving the Commerce Department to head President
Nixon's fundraising activities for the 1972 campaign, that he expected
substantial help from the oil industry, and that he hoped Keeler would
assist him in his fundraising efforts. Keeler’s response was
noncommittal.
Keeler subsequently had one or two telephone conversations with
Stans on this subject m late 1971 or early 1972. He also had calls from
Dan Parker of the Parker Pen Co., as well as from Jeremiah Milbank,
the chairman of the Republican Finance Committee. At various times
Keeler was asked to take an active role in Republican fundraising,
including requests to serve as cochairman for Nixon fundraising in
Oklahoma, as regional cochairman for Oklahoma, Texas, and Louisi-
ana, and as an industry fundraiser to contact officials of other com-
panies in the petroleum industry. Keeler consistently declined to act
as a fundraiser, although at a later meeting with Stans he did agree to
tal k to a number of oil company officials.
Keeler reached the conclusion, probably by early 1972, that, while
he would not solicit contributions for the Nixon campaign, he had no
alternative but to make a substantial contribution for Phillips. Accord-
ing to Keeler, he decided that he would try to “get by” with a contri-
bution of $75,000.
A senior officer of Phillips at that time had custody of cash, which
had been generated from foreign transactions of Phillips which
occurred prior to the time that Mr. Keeler became chairman and chief
executive officer of the company in September 1968. These funds had
apparently been obtained for the specific purpose of use for political
contributions, and their disbursement was controlled by the chief
executive officer. The official having custody of these funds in 1972 had
been given this responsibility shortly before Keeler became chief
executive officer. Apparently, neither he nor Keeler had either detailed
or firsthand knowledge of their origin, and it is unlikely that more
than two other officers of the company were even aware of their
existence.
In 1972, at Keeler’s direction, the officer having custody of these
funds provided him with the initial $75,000, and subsequently with
an additional $25,000, which he used for the contributions to the Fi-
nance Committee for the Re-Election of the President. Keeler believes
that he discussed his decision to make the contribution with one other
officer of the company, but simply to inform him as to what Keeler had
decided and why.
Keeler called Stans and indicated that he expected to be in Wash-
ington in early February and would have a package to deliver. Stans
m After Phillips publicly disclosed its corporate contribution on August 17, 1973, requests
were made of counsel for the company to make available for interview the knowledgeable
corporate officials. Because of negotiations with the Special Prosecutor over the disposition
of the criminal case, their appearance was postponed until November 20, 1973. On that
date Keeler appeared and, on advice of counsel, pleaded his privilege against seJf-incrimina-
tion. The case against Keeler and the company was disposed of on December 4. Thereafter,
at the request of the committee, Keeler provided a verified statement that forms the basis
of the discussion of Phillips’ corporate contribution.
491
said he would be out of town and asked him to deliver it to Lee Nunn
of the Finance Committee for the Re-Election of the President. Keeler
came to Washington on February 6, 1972, to attend a White House
conference and remained in Washington for a meeting of the National
Petroleum Council on February 10, 1972. The first contribution was
delivered to Nunn following a meeting with Attorney General John
Mitchell which Keeler believes occurred on either the 9th or 10th.
Shortly after making the first contribution, Keeler received another
call from Stans in which Stans again asked for Keeler’s help in raising
funds from the oil industry. Keeler believes that Stans may have
asked him about the likelihood of obtaining contributions from a
number of specific individuals in the industry during that conversa-
tion. In any event, they made an appointment to meet later at Stans’
office in Washington to discuss this further.
This meeting occurred on March 1, 1972, at Stans’ office at the
Finance Committee for the Re-Election of the President. Keeler recalls
that Stans began by making “quite a speech” about the oil industry, in
which he stated that the oil industry had done very poorly in the 1968
campaign; that it had not made substantial contributions to Nixon;
that he had reason to believe that the oil companies in the past had
been heavy contributors to political campaigns ; and that he expected
them to make similar contributions in this campaign. Stans listed a
number of people in the oil industry whom he said he did not know
or did not know well, and asked whether Keeler did. Keeler said that
he did know most of those mentioned.
Stans asked if Keeler* would contact those whom he. knew in behalf
of the finance committee and solicit a contribution since he was having
difficulty contacting oil industry people. Keeler recalls his commenting,
“Some of these fellows I can’t even get in to see.” Keeler indicated that
he was not willing to act as a formal fundraiser or to solicit contribu-
tions, but was willing to talk to those whom he knew and urge them
to see or talk to Stans when Stans attempted to contact them. Stans
said that would be helpful. Keeler expressed the opinion that it would
do no good to contact some of those mentioned. For example, he re-
ferred to one company president who was antagonistic toward the
Nixon administration because of the delays in constructing the Alaskan
pipeline.
While Keeler recalls that in an earlier conversation Stans had indi-
cated that he wanted $400,000 from each company, at the March 1
meeting Stans stated that he wanted at least $200,000 from each com-
pany and something to the effect that, “These companies we are discuss-
ing ought to be able to raise that much.” Keeler responded that he
would not speak for anyone else, but that $200,000 was out of the
question for Phillips. The conversation ended with Stans telling Keeler
that if he could not contact Stans, he should see Lee Nunn.
Keeler believes that, following the meeting with Stans, he talked in
person or by phone to most of the oil industry executives suggested at
the meeting. All those with whom he talked indicated their willingness
to talk to Stans, but almost all either protested that they didn’t know
whether they could raise the kind of money Stans wanted, or indi-
cated that they did no intend to make a contribution.
Keeler later was asked and agreed to act as cochairman for one of
the $l,000-per-plate Nixon “victory dinners” in Tulsa and was listed
as cochairman on the invitations ; lie and a number of Phillips officers
attended.
492
Either as a result of the March 1 meeting with Stans or as a result
of further telephone calls, Keeler decided that it was necessary to
make a further contribution of $25,000, bringing the company’s total
contribution to $100,000. He was scheduled to be in Washington on
March 27 and 28, 1972, for the annual Washington conference of the
Advertising Council, and to attend a stag dinner at the White House
on March 28. He drew an additional $25,000 in cash, brought it with
him to Washington, and delivered it to Nunn, probably on March 28.
In anticipation of his normal retirement, Keeler resigned as chief
executive officer of Phillips effective J anuary 1, 1973, and as chairman
of the board effective April 1, 1973. In April 1973 he retired as an
officer of the company, but remained a member of the board until
April 1974. In July 1973, after his retirement, Keeler went to the
office of the general counsel of Phillips, and advised him of these con-
tributions and that they had been made from corporate funds. This
conversation was reported to William Martin, who succeeded Keeler
as chief executive officer on January 1, 1973. Martin directed that out-
side counsel be employed to investigate the circumstances of the con-
tribution and to represent the company.
After a preliminary investigation by counsel, the board of directors
of Phillips was advised at its meeting on August 13, 1973, that these
contributions had been made from corporate funds. The board directed
that counsel advise the Special Prosecutor investigating the 1972 elec-
tion of these facts and take any steps necessary to secure the refund of
the contributions from the Finance Committee To Re-Elect the Presi-
dent. This was done on August 15, 1973. On August 17, 1973, the $100,-
000 was refunded to the company by the committee and a press release
issued by Phillips reciting these facts in summary form.
On December 4, 1973, the Special Prosecutor filed an information
in the U.S. District Court for the District of Columbia (Criminal No.
998-73) charging the Phillips Petroleum Co. and William W. Keeler
with non willful violations of section 610 of title 18 of the United States
Code prohibiting corporations from making, and corporate officers
from consenting to, political contributions in Federal elections. On that
date, both Phillips Petroleum Co. and Keeler entered pleas of guilty
and were fined $5,000 and $1,000 respectively.
II. AMBASSADORSHIPS
In a February 25, 1974, news conference, President Nixon denied
that his administration was involved in the practice of brokering am-
bassadorships. He declared, “Ambassadorships have not been for sale
and I would not approve an ambassadorship unless the man or woman
was qualified clearly apart from his contribution.” That very day,
his personal attorney and one of his principal fundraisers, Herbert
Kalmbach, became the first person in recent times to be convicted for
“selling an ambassadorship,” in violation of title 18, United States
Code, section 600. On February 25, 1974, Mr. Kalmbach entered a
guilty plea to having promised, in 1971, then Ambassador to Trinidad
and Tobago, J. Fife Symington, a more prestigious European ambas-
sadorship in return for a $100,000 contribution, which was to be split
between 1970 Republican senatorial candidates designated by the
White House and Mr. Nixon’s 1972 campaign. A condition of Mr.
Kalmbach’s agreement to plead guilty was that he be granted im-
munity from further prosecution in connection with “contributions
493
from persons seeking ambassadorial posts.” Mr. Kalmbach has also ad-
vised the committee staff that then Ambassador to Jamaica, Vincent de
Roulet, had a similar commitment.
Since his reelection on November 7, 1972, Mr. Nixon apparently has
had little trouble finding large contributors who were “qualified
apart from their contributions” to be appointed as Ambassadors. Since
November 7, 1972, Mr. Nixon has appointed 13 noncareer Ambassa-
dors. Eight of these newly appointed and confirmed Ambassadors each
had donated a minimum of $25,000 and in the aggregate, they con-
tributed over $706,000 to their appointer’s reelection committee.
In fact, over $1.8 million in Presidential campaign contributions can
be attributed in whole, or in part, to persons holding ambassadorial
appointments from the President :
CONTRIBUTIONS OF AMBASSADORS APPOINTED BY PRESIDENT NIXON
Name
Post
Date Pre- Post-
confirmed Apr. 7, Apr. 7,
by Senate 1972 1972 Total
Adair, E. Ross
Annenberg, Walter H_
Campbell, James F___
Catto, Henry E
Crowe, Philip K
Davis, Shelby
De Roulet, Vincent...
Dudley, Guilford.
Eisenhower, John
Farkas, Ruth L
Farland, Joseph S
Ferguson, Clarence C.
Firestone, Leonard K.
Franzheim, Kenneth..
Gerrard, Sumner
Gould, Kingdon
Helms, Richard
Hill, Robert C
Holland, Jerome H
Humes, John F
Hurd, John G
Ingersoll, Robert S...
Irwin. John N
Keating, Kenneth
Kintner, William R____
Krehbiel, V. John
Lodge, John D
Macomber. William B.
Marshall, Anthony D_.
Meeker, Leonard
Melady, Thomas P...
Middendorf, J. Wm.._
Miller, Lloyd I
Moore, John D. J
Moynihan, Daniel P._
Neumann, Robert G..
Peterson, Val
Ploeser, Walter C
Pritzlaff, John C
Replogle, Luther I
Rice, Walter L
Rivero, Adm. Horacio.
Rush, Kenneth
Russell, Fred J
Sanchez, Phillip V...
Schmidt, Adolph
Scott, Stuart Nash
Selden, Armistead
Smith, Robert S
Strausz-Hupe, Robert
Symington, J. Fife....
Vaughn, Jack Hood...
Volpe, John A
Watson, Arthur K
Total
Ethiopia i May 11, 1971
Great Britain Mar. 13,1969
El Salvador Feb. 8,1974
do.' Sept. 29, 1971
Norway' May 1,1969
Switzerland May 12,1969
Jamaica ' Sept. 17, 1969
Denmark May 12,1969
Belgium 1 Mar. 13, 1969
Luxembourg Mar. 26, 1973
Iran ' Mar. 27, 1972
Uganda ' Mar. 16, 1970
Belgium Apr. 10, 1974
New Zealand July 30,1969
Jamaica.. Mar. 20,1974
Netherlands Sept. 26, 1973
Iran Feb. 8,1973
Argentina Dec. 19,1973
Sweden ' Feb. 16, 1970
Austria... Sept. 24, 1969
South Africa July 23,1970
Japan ' Feb. 25, 1972
France Feb. 1, 1973
Israel June 15, 1973
Thailand Sept. 26, 1973
Finland Mar. 26, 1973
Argentina May 23, 1969
Turkey Mar. 26, 1973
Kenya . Dec. 18, 1973
Romania 1 July 22, 1969
Uganda 1 June 12, 1972
Netherlands ' June 12, 1969
Trinidad and Tobago' Dec. 19,1973
Ireland Apr. 18,1969
India' Feb. 8,1973
Morocco Sept. 19, 1973
Finland ' May 1, 1969
Costa Rica * Apr. 6, 1970
Malta'. July 8,1969
Iceland ' do
Australia'.. Aug. 13,1969
Spain. Sept. 8,1972
Germany ' July 8, 1969
Denmark' Jan. 3,1971
Honduras May 17, 1973
Canada July 8,1969
Portugal Dec. 18, 1973
New Zealand, Fiji and Tonga, Feb. 27, 1974
and Western Samoa.
Ivory Coast.. Feb. 8,1974
Sweden Apr. 25, 1974
Trinidad and Tobage July 8,1969
Colombia ' May 23, 1969
Italy... Feb. 1,1973
France ' Apr. 6, 1970
$2ML000 $4,000 $254,000
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500 500
100,000 100,000
100, 000 3, 500 103, 500
2,500 2,500
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10. 000 12, 300 22, 300
166, ‘666 15 , 166 ' ‘‘‘ us , 166
”‘38,"867 38," 867
100,000 900 100,900
:::::::::: 756 756
"166, "666 566”"i66‘566
‘‘‘ I ’ ooo ' VVIIV . 3, ‘666
50. 000 500 50. 500
3,000 3,000
””"”11 29, ‘500 29 , '566
200 200
500 500
48,505 48,505
25, 000 25, 000
10, 442 10, 442
1, 000 1, 000
1, ‘666 i‘060
2, "666 2’ 656
i," 666 ‘ 1,066
1,000
1,000
100 , 000
500
100, 500
2 , 000
2,000
300, 000
3,000
303, 000
1,325,372
422,692
1, 748, 064
> No longer serving in pest.
494
Furthermore, the committee’s investigation indicates there are still
a number of large contributors whose ambassadorial aspirations are
yet unfulfilled. Six large contributors, who gave an aggregate of* over
$3 million, appear to have been actively seeking appointments at the
time of their contributions.
At present, 34 of 112, or about 30 percent of all foreign envoy posts
abroad are held by noncareer appointees. The largest concentration
of noncareer ambassadors is in Western Europe, where there is also
a high concentration of persons contributing $100,000 or over. Below
is a list of eight Western European ambassadors and their contribu-
tions to the President’s campaign :
Country and ambassador Contribution
Great Britain, Walter Annenberg $250, 000
Switzerland, Shelby Davis 100, 000
Luxembourg, Ruth Farkas 300, 000
Belgium, Leonard Firestone 112, 600
Netherlands, Kingdon Gould 100, 900
Austria, John Humes 100, 000
France :
John Irwin 50, 500
Arthur Watson 300, 000
Ireland, John Moore 10, 442
Total 1,324,442
Senator Claiborne Pell, a member of the Senate Foreign Relations
Committee, said of the Belgium, Netherlands, and Luxembourg
appointments :
And in this regard we ought to bear in mind that Benelux
seems to be the most expensive place on which to be appointed
because Mrs. Farkas, who is Ambassador to Luxembourg, and
she wasn’t appointed until her contribution had been put to
the barrelhead even though an agreement had been received
6 or 8 months earlier, contributed $300,000 ; Mr. Gould, who
was not very forthcoming in his testimony as far as his wife’s
contribution went, less than candid, as I said publicly at the
time, contributed $100,000; and Mr. Firestone will have con-
tributed $168,000, so it means that to be the Ambassador to
Benelux will have contributed over a half-million dollars,
substantially over a half-million dollars, and I think it is a
poor practice.
The Caribbean posts of Jamaica and Trinidad-Tobago were also
popular with Presidential contributors. Sumner Gerard, appointed
to the Jamaican post in February 1974, gave $38,867, while Lloyd
Miller, Ambassador to Trinidad and Tobago since December 1973,
donated $25,000. The two former envoys to these posts, Vincent de
Roulet and J. Fife Symington, each contributed $100,000, allegedly
as part of an effort to obtain appointments to more prestigious am-
bassadorial posts.
According to the FCRP fundraisers interviewed by the Select Com-
mittee, they w T ent to great pains to tell prospective contributors who
might be interested in ambassadorial posts that there was no quid pro
quo in exchange for any contribution they might give. Robert Gray,
a public relations executive and a fundraiser in the 1972 Presidential
campaign who had been recruited by Maurice Stans, had a set speech
when making solicitations in this context. Speaking of his solicitation
495
of John Safer, a Washington, D.C., developer and sculptor who gave
$250,000 to the reelection campaign, Gray testified :
[H]e did tell me that he wanted * * * to be considered
for an ambassadorship. Over the years I have learned the
speech almost by rote, which I gave to him as I have given
every time that the subject comes up ; and that is almost
verbatim as I have given it that only the President can guaran-
tee you that you can be an ambassador. No one else can
guarantee that you will be nominated to the Senate other than
he, and that any contribution from any citizen can do no
more than assure him or guarantee that those of us who are
involved in the fundraising process will do our best to see
that his name is among those considered. And then he will be
considered on the basis of qualifications at levels beyond
ours. 98
Gray communicated Safer’s interest in making a contribution as
well as his interest in Government service to Stans. Apparently, Safer
was also referred to Herbert Kalmbach who reiterated that his inter-
est in an ambassadorship would be forwarded to the proper persons,
including Maurice Stans, but that no quid pro quo could follow from
the contribution.
At the very least, a number of persons saw the making of a con-
tribution as a means of obtaining the recognition needed to be actively
considered. Thus, as noted below, Vincent de Roulet stated that he
saw his contributions as one of three, or four avenues available to
individuals to obtain an appointment. In fact, one businessman, Roy
Carver, chairman of the board of Bandag, Inc., apparently saw a
correlation between the size of the contribution and the extent of the
anticipated recognition. Robert Gray testified that his public rela-
tions firm, Hill & Knowlton, had been retained by Carver to gain
“greater visibility on the Washington scene.” As related by Gray,
Carver later told him that he was “anxious to be considered as an
ambassador.” Although Gray had given Carver his “pat speech,”
Carver wanted to make contributions as a means whereby he would
receive “consideration” — but not necessarily the appointment. Gray
described his contacts with Carver:
Mr. Dorse x. Was any discussion had between you and Mr.
Carver concerning the amount of contribution?
Mr. Gray. No, not at any time. [M]y understanding is
that he gave a heavy contribution in the end. The only thing
that I know is that during the campaign he would call every
so often to find out if I could tell him what other people had
given, who was top money man at the moment; because he,
particularly in the final weeks, got very anxious that he be
on record as having given more than someone else. I don’t
know if he ended up with that distinction or not ; but he likes
to be first in what he does, and he was determined in the final
weeks to be first if he could.
Mr. Dorsen. Did you communicate with him the amount
that you thought would give him the highest contribution of
the campaign?
88 Gray executive session, March 12, 1974, 8-9.
35-SR7 n - 74 - RR
496
Mr. Gkay. Yes. At times when I could have found that out
I would pass it on to him.
Mr. Dorsey. How did you find this out?
Mr. Gray. By calling Ms. [Arden] Chambers [Stans’ sec-
retary] usually.
* * * * $
Mr. Dorsey. Did his desire to give the largest contribution
in the campaign have anything to do with his desire to become
an ambassador?
Mr. Gray. With his desire to be considered as an ambas-
sador? Yes, I am sure that it did. I cannot imagine that he
would have given those kinds of moneys without that belief.
Mr. Dorsey. Did you and he discuss the possibility that he
would give the largest contribution in the campaign, would
tend to increase the amount of consideration he would get for
his — - —
Mr. Gray. No, it was not that. The amount of visibility he
would get I think is what intrigued him about the amount. 9 ”
On November 2, 1972, Carver gave Bandag, Inc., stock worth ap-
proximately $257,000 to the President’s campaign. Although Carver
received a number of State Department and White House interviews,
he never received any appointment.
In at least two cases, discussed in greater detail below, there is
evidence that the articulated policy of the Finance Committee To Re-
Elect the President not even to suggest the possibility of a quid pro
quo to a prospective contributor was ignored by high-ranking White
House and campaign officials. 1 According to evidence in the possession
of the committee, in two cases, involving J. Fife Symington and Vin-
cent de Roulet, Herbert Kalmbach, the President’s personal attorney
and the leading fundraiser on behalf of FCRP prior to April 7, 1972,
appears to have made an express commitment for an ambassadorial
post in exchange for a substantial campaign contribution. In one of
these cases, involving Symington, Kalmbach has already pleaded
guilty to a violation of title 18, United States Code, section 600, which
makes it a crime to offer a Government job in exchange for a political
contribution. In a third case, involving Cornelius Vanderbilt Whitney,
a $250,000 contribution was returned to Whitney in the expectation
that he would have to testify before the Senate Foreign Relations
Committee and that the return would eliminate any suggestion that
the anticipated appointment was related to a campaign gift. 2
m Id. at 22-23.
1 Perhaps in no other area of the campaign financing investigation was the inability to
obtain White House documents as important as was the case involving ambassadorial
appointments. Since the appointment is made by the President and final consideration of
the merits of a particular candidate did not extend significantly beyond the walls of the
White House, the internal White House documents reviewing the qualifications of a candi-
date could be particularly enlightening. As noted elsewhere in this report, no documents
were provided to the committee following the conclusion of public hearings on August 7,
1973.
2 In a fourth case, involving Ruth L. Farkas, the Select Committee refrained from con-
ducting an investigation into any relationship between her campaign contribution of
$300,000 and her nomination to the post of Ambassador to Luxembourg at the request of
the office of Special Prosecutor.
Compliance with this request of the office of the Special Prosecutor was one of several
such actions by the committee.
497
' A. J. Fife Symington
J. Fife Symington was appointed by President Nixon as Ambas-
sador to Trinidad and Tobago in June 1969. and served in that posi-
tion until his resignation in November 1970. As stated earlier, the in-
cident involving Symington was the basis for Kalmbach’s conviction.
Symington was appointed by Kalmbach as the Maryland finance
chairman for Nixon’s 1968 campaign; Symington was also a con-
tributor to that campaign. During the course of the campaign, Sy-
mington indicated to Kalmbach his interest in becoming an ambas-
sador. After the election, Kalmbach recalled that on several occasions
Symington met with him to urge his consideration. Kalmbach said,
“His name was on a list of people who had been contributors and work-
ers, as someone who expressed an interest in an ambassadorship,”
which “was furnished to (Peter) Flanigan by Mr. Stans.”
Symington received an appointment to Trinidad and Tobago in
June 1969, but felt he should have been posted in Western Europe.
Thereafter Kalmbach said, “he would call me from time to time and
he made it very plain to me that, in view of how muyh he worked
on behalf of the President” and because “his wife’s aunt, I think it
is, Helen Frick of Pittsburgh, had been a very major contributor to
the President he felt that he had not been accorded as major a post as
he should have been.”
In September 1970, Symington called Kalmbach and asked to see
him. A few days later, on September 16, Symington flew to L.A.
and was met at the airport by Kalmbach. During lunch at the Cali-
fornia Club, Symington explained the purpose of his visit. Kalmbach
recalled:
He said that * * * the humidity was terrible in Trinidad,
and it was affecting his wife in such a manner that he was
giving serious consideration to resigning and coming back
home. He repeated then the fact that he liked being an
Ambassador, and * * * he felt he should have been appointed
to a European post in 1969, but that now with a year or so of
experience in Trinidad, he was ready to go to a major post or
a more major post, and particularly talking about a European
post, and that was what he wanted to do was to talk to me
about this and he wanted my support with the White House
to secure such an appointment.
Now, about that time I said, Fife, I’ve been involved in
a senatorial campaign program. I’m soliciting funds. I don’t
think * * * I’ve talked to you about this before, but I would
like to talk to you about your financial help for this program.
And I described the program.
He said, Herb, Marsie and I will contribute $100,000 to the
President and the 1972 program. Now, if you want to split it
up, that is your decision and the decision of the White House.
But I want to make it plain that I’ll make this pledge, but
before I make this pledge firm, Herb, I would like to be cer-
tain, that I would like to be certain that I will receive an
appointment to a European post.
498
And I said, well, Fife, I just don’t have the authority to
do more than I’ve done before, and that is give you my word
I’ll act as a reference and I’ll support your candidacy for a
major post. He said, Herb, with all respect * * * that isn’t
good enough. He said, I’ve got to have the assurance from Bob
Haldeman. And I said, Fife, I can’t do that, you know. And
he said, why don’t you call bim? And I said, OK, I will. 3
Kalmbach then went on to describe his efforts to reach Haldeman
and obtain a commitment for a European post for Symington :
I went to the telephone and called him, called Bob Halde-
man.
And it’s my memory that when the operator came on, she
then put me through to Larry Higby. And it’s my memory,
too, that they picked him up in Chicago, that evidently Bob
and the President were in Chicago on that day. And I de-
scribed to Higby my conversation, the fact that Symington
wanted a European appointment, that he was willing to
make this pledge, give $50,000 in 1970 and $50,000 in 1972.
And I said, Larry, I want to be told whether this is accept-
able or not. And it was precisely understood in our conversa-
tion that Symington was asking for a commitment. Larry
said, Herb, let me call you back and I said, alright. And I re-
turned to the table and it seemed to me I got a call at the club
within a matter of minutes. Now, whether it was 15 minutes
or 30 minutes I don’t know. But when Higby came on the
phone, he said Herb, the answer is go. You can go ahead on
that. And I said, fine, Larry. And as I remember, that was
about the extent of the conversation. I went back to the table
and so informed Ambassador Symington and he said, alright,
then, in fact, a commitment has been made and I agreed with
that. 4
There was then a discussion of the European posts that might be
available. Kalmbach said he told Symington that the British and
French posts were out but there was a possibility of Spain, Portugal,
and several other embassies. Symington sorted out these posts in order
of his preference, and Kalmbach “wrote all of this out and gave him
a slip of paper which he put in his wallet.”
Shortly after this meeting, Symington gave Kalmbach $50,000 for
the 1970 senatorial campaign.
During 1971, after Symington resigned his Tobago post, Kalmbach
began to talk to people at the White House about Symington’s commit-
ment and appointment. Kalmbach said he talked on several occasions
to H. R. Haldeman, Lawrence Higby, Gordon Strachan, and Peter
Flanigan about the commitment to Symington, including the fact that
Symington was making a large campaign contribution. Kalmbach said
that he also went to Stanton Anderson to talk about this appointment,
and there “was no question about” the commitment, although Syming-
ton’s contribution activity was not discussed.
Kalmbach stated that Flanigan was the only person in the White
House ever to question the commitment. Kalmbach recalled Flanigan
3 Kalmbach executive session, March 22, 1974, pp. 113-14.
‘Id. at p.115.
499
said. “We didn’t give him a commitment. We can’t do it.” To this
Kalmbach said he replied, “I don’t care how you slice it, you did, and
it came right out of Bob’s office. And as far as I’m concerned, it’s a
matter of honor and we live up to what we say we will do.” 5
After this Kalmbach said that he wrote several letters to the White
House expressing his view on this matter. Also he continued to go back
and forth between Haldeman, Strachan, and Flanigan but no progress
was being made. Haldeman told Kalmbach that it was Flanigan who
was blocking the appointment. According to Kalmbach, Haldeman
said, “Herb, you’ve got to talk to Flanigan. Flanigan was blocking
it.” 6
When in 1972 nothing had been done, Flanigan suggested to Kalm-
bach that they give Symington his money back, according to Kalm-
bach. Kalmbach met with Symington and told him of the problems
that had been encountered and that he was unsure if the appointment
would be forthcoming. When Kalmbach told Symington that he
would return his money, Symington replied, “As far as I’m concerned,
I don’t want it back. I’ve got the commitment, and that’s all I need.”
Kalmbach advised Flanigan and Strachan of Symington’s position.
Kalmbach said that he had never discussed the commitment with the
President and added that there was no indication that anyone had
discussed this matter with the President.
In a letter to the committee dated June 20, 1974, Flanigan stated
his recollection of his participation in discussions regarding Syming-
ton, as well as Vincent de Roulet, whose case Flanigan recalls was
presented to him along with Symington’s :
Toward the end of 1970 or in the first part of 1971 Mr.
Kalmbach asked for a meeting with me. During that meeting
he said that in the future a European ambassadorial post
should be held for Mr. Symington, then Ambassador to Trini-
dad and Tobago, and another for Mr. de Roulet, then Am-
bassador to Jamaica. I indicated that both gentleman could
be considered along with other applicants. However, Mr.
Kalmbach said consideration was not sufficient as a commit-
ment had been made. My reply was that the policy established
in the 1968 campaign against any commitments remained in
force, and that he had no authority to make any commitment.
Mr. Kalmbach said he was aware of the limits of his au-
thority and had checked with the White House before mak-
ing the commitment.
I said I believed there had been a misunderstanding, and
wanted to clear up this matter before proceeding further,
to which he agreed. Shortly thereafter I met with Mr. Halde-
man, related Mr. Kalmbach’s comments to me, said this was
contrary to established policy which I believed should not
be changed, and asked if Mr. Kalmbach’s report was correct.
Mr. Haldeman told me that Mr. Kalmbach was misinformed,
that he did not have the authority to enter into commitments
to Mr. Symington and Mr. de Roulet for ambassadorial
posts, and that the policy against commitments remained in-
tact. I said that I proposed to tell that to Mr. Kalmbach and,
6 Id. at p. 116.
6 Id. at p. 117.
500
in light of the misunderstanding, direct that he make clear
to Mr. Symington and Mr. de Roulet that no commitment
existed and they could have their contributions back. Mr.
Haldeman expressed no objection to this course of action.
I subsequently called Mr. Kalmbach, reported my conver-
sation with Mr. Haldeman, and told him of the agreed course
of action. While Mr. Kalmbach expressed reservation as to
any misunderstanding, he agreed to offer to return their con-
tributions to Mr. Symington and Mr. de Roulet.
... In the case of Mr. Symington, however, based on reports,
memoranda, 7 and personal conversations with him, I un-
derstood that he would not accept his contribution back but
that he continued to feel that a commitment existed. On this
understanding, I considered the matter unresolved and for
that reason, among others, continued to oppose through
the beginning of 1973 the appointment of Mr. Symington to
an ambassadorial post.
When given an opportunity to state their views on the above allega-
tion, Haldeman, through his lawyer, stated that, “he testified regard-
ing the subject matter before the grand jury . . . and declines to discuss
it with you.” Higby also stated that he “testified fully and completely
to the grand jury concerning the general matters outlined in your
letter.” He added that “the inferences that your brief letter seems to
make are not warranted.” 8
Stans, through his lawyer, observed that the applicability of execu-
tive privilege to correspondence between Stans and the White House
regarding Presidential appointments is being litigated in the courts
and that “other evidence bearing on that same topic, has been sealed
by a judicial order.” He concludes that “the parties thereto are bound
to secrecy by the order. We must, on behalf of our client, respectfully
decline to submit evidence on the subject.” The committee has found
nothing in any court order, however, that would prohibit Stans from
responding to its inquiry.
Strachan’s attorney in a communication to the committee stated
that Strachan advised him that he was aware of discussions concern-
ing Symington’s desire for the ambassadorship, but heard nothing
that implied a quid fro quo. The committee was further advised that
Strachan recollects that at some point he was told by Haldeman —
although he cannot recall the date — that Symington was not going
to get the post he sought.
Anderson, in a staff interview, advised that he had no knowledge
of any commitment to Symington and never discussed any such com-
mitment with Kalmbach.
7 The Select Committee does not have access to any documents to which Flanigan refers.
As noted above, the White House has refused to turn over any documentary evidence to
the committee since August 7, 1973.
8 The letter to Higby from Chief Counsel Samuel Dash reads: “The Senate Select Com-
mittee on Presidential Campaign Activities has received evidence that you had discussions
with Herbert W. Kalmbach concerning the desires on the part of Vincent de Roulet, then
Ambassador to Jamaica, and J. Fife Symington, then Ambassador to Trinidad and Tobago,
to obtain more prestigious ambassadorial posts. The evidence in the possession of the
committee indicates that you had conversations with Mr. Kalmbach in which the contribu-
tion activity of these two individuals was discussed as well as the fact that both these men
had commitments for their desired posts. In addition, the committee has received evidence
that you had a telephone conversation with Mr. Kalmbach on or about September 16, 1970
in which Mr. Kalmbach was assured by you apparently following a conversation you had
with H. R. Haldeman, that in exchange for a contribution totalling $100,000 that Mr. Sy-
mington could be assured of an appointment to the ambassadorial position that he
preferred.”
501
In a staff interview conducted on November 16, 1973, Symington
said that through 1972 he contacted Kalmbach several times about his
interest in a West European ambassadorship. He said that he spoke
to Kalmbach because he had a “pipeline” to the White House. Syming-
ton stated there was no “direct linkage” between his contribution and
his desire for the post. In early 1972, Symington said, he spoke with
Peter Flanigan, and told him that he was disappointed because he
had been unable to secure a more desirable ambassadorship. Symington
stated that Flanigan asked if he would like his wife’s contribution
returned, but that he turned down Flanigan’s offer. Symington has
received no appointment since that time.
B. Vincent de Roulet
Vincent de Boulet, a contributor to President Nixon’s 1968 cam-
paign, was named Ambassador to Jamaica in September 1969. De
Roulet said of his 1968 contribution, “I was seeking some position
in Government for which I considered myself qualified and I knew
that there were only three or four ways to get it, one of which was
money.”
According to committee testimony and interviews, De Boulet pur-
sued his quest for Government service. De Roulet said, after deciding
to make a contribution in 1968, he advised Maurice Stans of this deci-
sion and also of his desire to acquire “some position in Government.”
Stans indicated to De Roulet that he would “show an interest on
his behalf.” Subsequently, De Roulet received a telephone call from
Stans advising him that “he had sent his name on a list to the White
House.”
Shortly after the 1968 elections, De Roulet met with Peter Flanigan,
and they discussed several possible postings. In April 1969, De Roulet
was interviewed by Elliot Richardson, then Under Secretary of State,
but the question of his obtaining an ambassadorship was never raised.
He heard nothing more until his appointment to Jamaica was
announced several months later.
In early May 1970, Am bassador De Roulet invited Herbert Kalm-
bach to Jamaica for a birthday party. At that time De Roulet in-
formed Kalmbach that he was willing to contribute $100,000 to Pres-
ident Nixon’s 1972 campaign. De Roulet said that he brought up the
subject of a contribution and that the $100,000 figure had been pre-
viously decided upon by him and his wife. During their discussion,
Kalmbach explained the “Town House Project” in which the White
House was raising funds for various Republican Senate races in 1970.
De Roulet agreed to split his $100,000 contribution between the 1970
Senate races and Mr. Nixon’s 1972 campaign — -as Symington had
done. Kalmbach said that De Roulet indicated his willingness to con-
tribute cash if that was Kalmbach’s preference.
After his visit, to De Roulet, Kalmbach wrote him on May 12, 1970,
thanking him for De Roulet’s hospitality. The letter also contained
the following paragraph:
The understanding reached on the subject discussed is clear
and I am certain that you and Linda will look back in later
days to a truly wonderful 8 years of service to the President
and to the Nation.
502
In a staff interview, De Roulet said that it was his understanding
that his $100,000 commitment was firm after their May meeting.
Kalmbach, however, says that he was not under the impression at that
point that a commitment had matured even though, foffowing his
visit to J amaica, Kalmbach had briefed Haldeman on his visit, in-
cluding De Roulet’s willingness to give $100,000 in two installments
and in cash if it was preferred. Haldeman replied that cash was pre-
ferred whenever possible.
Kalmbach said that the commitment was not made firm until sev-
eral months later.
Kalmbach said that in the early summer of 1970, he returned to
Jamaica to solidify De Roulet’s pledge. According to Kalmbach, at
that meeting, De Roulet said that before doing so, he wanted to make
sure that he was not being “blackballed” for a European post in which
he was interested. Kalmbach checked with Haldeman and Maurice
Stans and both responded favorably to the job being done by De
Roulet. Kalmbach so informed De Roulet, who, in September 1970,
gave Mr. Kalmbach $50,000 in cash, which Kalmbach put in the
“Townhouse Trust Fund” he was managing. Kalmbach said that it
was his understanding that De Roulet met with Haldeman on several
occasions and that De Roulet had a firm “commitment” for a Euro-
pean post. In fact, Kalmbach says that he mentioned to the people in
the White House who were involved in processing candidates for
ambassadorial posts — including Haldeman, Stans, Flanigan,
Strachan, Higby and Anderson — that De Roulet had a commitment in
the same way as J. Fife Symington. Once again according to Kalm-
bach, only Flanigan raised any objection.
Kalmbach’s understanding of the above events is based largely on a
handwritten memorandum dated May 10, 1970 with the caption : “To :
1970 Contribution File Re: Meeting with Vincent De Roulet.” The
memorandum reads :
Had good meeting with Vincent De Roulet and reached the
following understanding :
(a) He w T ill “pledge” to give us $100,000 over the next
3 years (ending in 1972) ; would prefer to give 25 in 1970,
25 in 1971 and 50 in 1972 but will give 50 this year and 50 in
1972 if we would so prefer.
* * * * *
(c) He [Pedge] would like to have my “sponsorship” for
an appointment to one of the following posts at some time in
the next 18 months to 2 years: (a) Secretary of Protocol;
(5) Italy; ( c ) Spain; (d) Portugal; (e) Brazil; and
(/) Argentina.
(d) No commitment was made to any of this. It was agreed
that I would talk to Maury & HRH and after advising them
of our conversation and after being certain of no negatives
I’m to so advise Pedge. His pledge would then become
firm. * * *
*****
(f) Any contribution from Pedge is to completely anony-
mous. (sic) [Emphasis in original.]
503
Some of the efforts of De Roulet to obtain support for a more
prestigious ambassadorial post were summarized in a letter from
De Roulet to Kalmbach, dated July 12, 1971, which described a visit
to Jamaica by John Connally, who, at that time, had recently become
head of Democrats for Nixon :
The Connally visit was all plus as he was obviously glad
to see me as he got off the plane from Tehran. We literally
had hours of long, leisurely, humorous, sometimes serious,
conversation. On the way to the airport yesterday, he asked
me if I would stay in Jamaica as Ambassador, and I replied,
“No, it would not be in the American Government’s best inter-
ests.” He then asked what I would like to do next if the Presi-
dent were reelected. I told Mr. Connally that I would like
another mission where there was lots of substantive work in
American investment, immigration, and narcotics. I men-
tioned perhaps Canada or Mexico, or anywhere else that
would fit the description, and he stated enthusiastically he
thought I w T ould be terrific in Canada or Mexico. There is
absolutely no doubt in my mind that if the President is
reelected, and Connally is around in any capacity, he will
actively lobby for my cause.
We get along very well and our ideology is very close. I
would not be surprised if he so indicated to Hal deman on
Friday. He asked me what, if any, arrangements I had made
and I decided to simply fell him you and I had had some
discussions in May of 1970 and as far as I was concerned,
the matter was in your hands. Connally’s return remark was,
“Herb is certainly the man, and you are in the right hands.”
De Roulet delivered the balance of his $100,000 commitment in two
installments, $22,000 in cash to Kalmbach in September of 1971. and
an additional $28,000 in cashier’s checks to FCRP in late January
1972. Despite his contributions and other efforts to seek a more pres-
tigious post, De Roulet remained as Ambassador to Jamaica during
the 1972 campaign.
Flanigan’s account of his involvement in this matter is reviewed
in the previous subsection. Unlike the case of Symington, who con-
tinued to claim that a commitment existed, Flanigan said with re-
spect to De Roulet :
Based on reports received shortly thereafter, I understood
that Mr. De Roulet agreed that no commitment was out-
standing, that he did not want his contribution returned, and
he continued to hope that he woidd be favorably considered
for a European post. On this understanding, I considered the
matter satisfactorily resolved.
The comments of Haldeman, Stans, Strachan, Higby, and Ander-
son or their attorneys, cited in the discussion of Symington apply as
well to this matter.
In August 1973, De Roulet resigned his Jamaica post. He has re-
ceived no other appointment.
504
C. C. V. Whitney
Cornelius Vanderbilt Whitney, 74, is a wealthy New York indus-
trialist, whose experience includes Assistant Secretary of the U.S. Air
Force, Under Secretary of Commerce, and an officer or director in
numerous other business concerns. In a staff interview Whitney stated
that he was contacted by Lee Nunn a vice chairman of FCRP, in
late April or May of 1971, who asked him to “come through in a big
way for Nixon as he was very hard up for money.” Whitney told
Nunn that he was a strong supporter of President Nixon and would
contribute $250,000 to his campaign.
About two weeks later, Nunn met again with Whitney. Nunn said
that he knew Whitney had served his country many times before and
that he wanted to know if he was open to Government service. In a
staff interview Nunn stated to the committee that raising the subject
was his idea and that he had not previously spoken about it with
anyone else. When asked by Whitney what he had in mind, Nunn
replied, according to Whitney, “an ambassadorship.” Whitney told
Nunn he felt qualified to serve in Spain, because of his long associa-
tion with that country beginning in 1950 when, as Under Secretary
of Commerce, he had been sent as a Special Envoy to England, Lux-
embourg, Italy and Spain to help them recover from World War II.
As recalled by Whitney, there was a further reference to Whitney’s
$250,000 contribution at this meeting. At no time, according to Nunn,
was there any discussion of a connection between his fundraising and
any sale of an ambassadorship.
Shortly after this meeting, Nunn communicated to Whitney that
Attorney General John Mitchell wished to see him. In early June 1971,
Whitney, Mitchell and Nunn met. in Mitchell’s office in the Justice
Department. The Attorney General told Whitney how pleased he was
that he wished to serve as Ambassador to Spain and that his name
would be submitted.
In early June 1971, Whitney made the $250,000 contribution. During
the remainder of the summer, Whitney communicated as to the status
of the anticipated appointment with Peter Flanigan who was repre-
sented to him as the person in charge of ambassadorial appointments
at the White House.
In October or November 1971, Nunn called Whitney and told
him that he was returning his $250,000 contribution. Nunn advised
Whitney that should the President submit his name for the post in
Spain. Whitney would have to appear before the Senate Foreign Rela-
tions Committee for confirmation. There had been publicity over the
fact that Senator Fulbright had stated that lie would take a dim view
of persons up for confirmation who had contributed over $10,000.
According to Whitney, Nunn said that he would then be able to truth-
fully say that he did not buy the appointment. Nunn also told Whitney,
“he should not feel obligated to give one cent of his money to the
campaign.” At the same time, Whitney gave no indication to Nunn
that he was not willing to recontribute the money at some later time
after confirmation.
Whitney received two calls from Peter Flanigan in the latter part
of 1971. In the first call. Flanigan informed Whitney that there had
been a delay in his consideration for appointment. The second call,
505
in December 1971, was to inform Whitney that his name had been
dropped from consideration due to his age.
Before the second call, Whitney's $250,000 contribution was returned
in December 1971 in the form of 50 $5,000 checks which were dated
either November 30, 1971 or December 1, 1971. These checks were
drawn on accounts of the Finance Committee for Re-Election of the
President at the direction of Nunn.
Despite the fact that both Nunn and Whitney denied that there
was any correlation between Whitney’s contribution and his desire
to become an ambassador, it appears that at no time did Whitney
offer to recontribute the $250,000. In fact, Whitney stated that he was
upset over not receiving the appointment and, because of that, he
refrained from contributing any money to the campaign until much
later when he made a contribution of $50,000 to the reelection effort.
Nunn testified that “there may have been some feeling at the committee
[FCRP] that I should have pressed C. V. Whitney for a greater contri-
bution, but Fulbright’s statement was something to be considered.”
III. ROLE OF HERBERT W. IvALMBACH IN THE
CAMPAIGN
Herbert W. Kalmbach was the chief fundraiser during the first iy 2
years of Nixon’s reelection campaign. As the President’s personal
attorney who participated in the 1968 election effort. Kalmbach advised
the committee that, beginning in November of 1970 under the super-
vision of Haldeman, he canvassed scores of potentially large contribu-
tors in an effort to obtain early commitments of large contributions
for the anticipated reelection effort.
Kalmbach first became involved in the 1972 reelection activities
when he agreed to take over control of certain surplus funds left over
from the 1968 election. As reconstructed by the committee staff with
the assistance of Kalmbach, it appears that in January 1969, when he
obtained custody of the surplus funds at the request of Maurice Stans,
the surplus amounted to $1,098,952.20.
As noted elsewhere in this report, deposits to Kalmbach’s fund of
cash include $100,000 contributed by the milk producers on August 2.
1969. Also noted elsewhere, among the larger earlier expenditures
from Kalmbach’s funds were payments to Anthony ITlasewicz and
Donald Segretti.
In November 1970, Kalmbach was requested by Haldeman to involve
himself in an early campaign fundraising. According to Kalmbach,
on a number of occasions, before as well as after the November meet-
ing, Haldeman told him to obtain cash contributions wherever he could.
Thereafter, Kalmbach sought out friends in an effort, to obtain what
amounted to commitments for campaign contributions. Kalmbach
states that he never asked for a commitment in so many words, but
rather approached people, suggested an amount to them and asked
if they would accept that, as a “goal figure.”
Kalmbach acknowledged that, he told contributors that there were
different classes of contributors, and he had different “cut-off points,”
for example, at $25,000, $50,000, and $100,000. Kalmbach said that
on occasion he referred to a “100 Club” — meaning contributors who
gave $100,000. He indicated that he told contributors that there we»
506
a lot of people in the $25,000 class, and if one wanted to be known as
a major contributor, he should give more.
Although he did not specifically recall the details of his conversa-
tions with George Spater of American Airlines or with George Stein-
brenner III, discussed elsewhere, he does not dispute that he might
have told them about “special classes” of contributors. Kalmbach stated
that he had no idea until 1973 that their contributions came from cor-
porate funds and that, with respect to Spater, he did not know until
well after it had been made that the contribution had been given in
cash.
Kalmbach said that he did not participate in the industry by indus-
try solicitation program headed by Buckley Byers, discussed else-
where, with one exception. At the request of Maurice Stans he agreed to
solicit the major automobile contributors. He believes that prior to
being asked by Stans he had already solicited Henry Ford who made
a personal and family commitment of $100,000. Since Ford indicated
the Ford Co. executives were going to contribute through other chan-
nels, Kalmbach did not solicit them. In the case of Chrysler, he met
Lynn Townsend in Detroit and took his standard approach after ask-
ing for a $100,000 goal. 9 The solicitation of Richard Gerstenburg of
General Motors also fit the general pattern. Kalmbach did not solicit,
executives of American Motors.
Kalmbach stated that his practice was not to become involved in the
discussion of specific industry or company or individual problems with
the contributor, and he made it known, if the subject came up, that,
there could be no quid pro quo for any contribution. Kalmbach stated
he violated his practice of not making a commitment for a post in
return for a contribution on two occasions : in his discussions with J.
Fife Symington and Vincent de Roulet, treated elsewhere.
Generally, Kalmbach travelled around the country meeting indi-
vidually with various potential contributors. One exception to this
practice was a White House dinner in mid-November 1970 attended
by the. President, John Mitchell, and several large potential contribu-
tors, Clement Stone, John Mulcahy, Richard Scaife, Kent Smith, and
John Rollins, in addition to Kalmbach. There was no discussion of
fundraising at the dinner or in the presence of the President, but after
the dinner, Kalmbach and the potential contributors discussed what
they could be expected to contribute to the 1972 campaign. According
to Kalmbach, Stone and Mulcahy each had committed $1 million in
1971, a second $1 million in 1972, and a third $1 million in 1973. if there
9 There appears to be some confusion over the amount contributed by Chrysler executives
to the campaign. Memoranda written by Robert Krattli of the FCRP staff, and other cam-
paign officials credit Chrysler Corporation with $300,000, but there is no known support
for this figure. The Rose Mary Woods list credits Chrysler Corporation employees with
contributions totaling $133,844.09, including contributions by John J. Riccardo of
$|6,218.59 an( ? $1,000. Riccardo has confirmed the $1,000 contribution but has denied in an
affidavit submitted to the Committee any knowledge of the larger contribution, and there
are no records or other data to contradict Riccardo’s position. Townsend is credited on the
Rose Mary Woods list with $1,500 in contributions which he has confirmed making. Records
by Chrysler to the Committee credit its employees with total contributions of
$121,054 to President Nixon, the Republican Party, the National Republican Party, and the
Republican National Finance Committee. Of this amount, slightly over $33,000: is credited
m Chrysler’s records to “President Nixon.” and checks for the remaining amount were
endorsed to RNC committees. However, since both Sloan and Paul Barrick (FCRP comp-
troller) say that their records (and the Rose Mary Woods list) reflected contributions to
tne President s. campaign, alone, it appears that the most reliable figure for Chrysler
employee contributions to the President’s campaign is that on the Rose Mary Woods list
minus the $16,000 Riccardo contribution, or $117,626.
507
was a deficit. In fact, Stone gave $2 million. Mulcahy gave approxi-
mately $600,000. He did not give more because, according to Kalmbach,
he had contributed heavily to the 1970 campaign. Scaife said that he
would give $1 million and gave that amount in 1971. Smith and Rol-
lins did not commit themselves at the dinner but were later seen indi-
vidually by Kalmbach when each pledged $250,000.
In all, Kalmbach solicited pledges of over $13.4 million. In fact, a
total of $10,658,000 was given, with the principal reduction being the
case of Mulcahy. Of this total, over $8.8 million was contributed prior
to April 7, with over $1.8 million after April 7, 1972. Kalmbach empha-
sized the importance to his solicitation, efforts of being able to assure
potential contributors that their contributions would remain confi-
dential if made before April 7 ; Kalmbach was also concerned about
having his own solicitation role disclosed. In fact, Kalmbach resigned
his position with FCRP when the new disclosure law went into effect
on that date.
An undated proposed budget, prepared for the campaign in the
spring of 1971 by Jack Gleason and transmitted to Jeb Magruder, lists
$40 million as needed for the campaign. This total Avas broken down
as follows :
Size of each
contribution
Number of contributors required (1,082):
125
150
100
100
500
$ 1 , 000 , 000 +
ioo, ooo+
50, 000+
25, 000+
10 , 000 +
5, 000+
1 , 000 +
Total
All other (including direct mail and TV) below $1,000,
Total
Average
contribution
$1, 425, 000
125, 000
60, 000
30. 000
15.000
7, 500
2, 500
Amount
$ 10 , 000, 000
12, 500, 000
7, 500, 000
4, 500, 000
1, 500, 000
750, 000
1, 250, 000
38,000, 000
1, 500, 000
39, 500, 000
Kalmbach’s efforts thus amounted to a commitment for one-third
of the total campaign budget, virtually all of which was committed
prior to April 7, 1972. Most significant was the proportion of contri-
butions in the highest ranges listed by Kalmbach. Of anticipated con-
tributions of $100,000 or more, which constituted $22.5 million of the
$40 million budget, Kalmbach solicited pledges of $12,725 million, or
over 57 percent of the budgeted amount. 10 The list of those persons
solicited by Kalmbach, their actual contributions are:
10 As noted, the amount ultimately realized was less than committed. In terms of actual
contributions, Kalmbach was responsible for about $9.69 million of the total of $22.5 mil-
lion required from contributors of $100,000 and over, or 43% of the amount sought.
INDIVIDUALS SOLICITED BY HERBERT W. KALMBACH AND ACTUAL CONTRIBUTIONS
Name
Address
1972 affiliation
Annenberg, Walter..
Ashley, Theadore
Beckett, McDonald..
Berry, Loren.
Bobst, Elmer
Carlson, Edward
Catto, Henry
Copley, James......
Crown, Henry
Cummings, Theodore,
de Roulet, Vincent...
Farkas, Dr. Ruth L...
Firestone, Leonard K_
Fisher, Max
Ford family
Gerstenberg, Richard.
Getty, J. Paul
Gould, Kingdon
Guest, Raymond
Heinz, Henry.
Hoffman, Wayne
Hume, John
Isbell, Marion W
Jones, Thomas U
Keith, Williard
Lasdon, William
Levy, Gustave
Lewis, Lawrence
Liedtke, William
McClure, Harold
McGaw, Foster
Marshall, Anthony...
Wynnewood, Pa
New York, N.Y
Los Angeles, Calif..
Dayton, Ohio
New York, N.Y
Prospect, III
San Antonio, Tex...
La Jolla, Calif
Chicago, III
Beverly Hills, Calif..
Manhasset, N.Y
New York, N.Y
Los Angeles, Calif..
Detroit, Mich
Grosse Pointe, Mich.
Detroit, Mich
Los Angeles, Calif..
Laurel, Md
King George, Va
Pittsburgh, Pa..
Los Angeles, Calif..
St. Paul, Minn
Phoenix, Ariz
Los Angeles, Calif. _
do
New York, N.Y
do
Richmond, Va
Houston, Tex
Alma, Mich
Evanston, III
New York, N.Y
Ambassador — Great Britain
Warner Bros., Kinney Services
Welton, Beckett & Associates.
L. M. Berry & Co. ..
Warner-Lambert
United Air Lines
Ambassador— El Salvador w...
Henry Crown & Co
Pacific Coast Properties
Ambassador— Jamaica 14
Alexanders Department Store 15
Firestone Tire & Rubber Co.i«__
Fisher-New Center Co
Ford Motor Co
General Motors
Getty Oil Co
Ambassador — Luxembourg 20 _ .
H. J. Heinz Co
Flying Tiger Corp
Ambassador— Austria
Ramada Inn
Northrop Corp .22
Marsh, McLennan, Cosgrove & Co
Warner-Lambert..
Goldman Sach & Co
Flagler Hotels
Pennzoil ....
Patrick Petroleum Co
American Hospital Supply Co
Ambassador— Trinidad 23
Goal Pre-April 7 11 Post 12 Total
250.000 250,000 4,000 254,000
150.000 137,055 137,055
12,000 10,000 22,000
100.000 102,000 9,700 111,700
125.000 100,000 54,500 154,500
23,452 23,452 1,500 24,952
25.000 25,000 25,000
50.000 500 29,978 30,478
25.000 (C)25, 000 25,000
50-100,000 46,406 46,406
100, 000 u (C)1Q0, 000 3, 500 103, 500
300.000 15 300,000 300,000
100. 000 100, 000 15, 100 115, 100
100,000 17 (C)125, 000 1 7 125, 000 250,000
100,000 103,276 24,000 18 127,276
100,000 1 9 51, 012 51, 012
100, 000 75, 000 50, 000 125, 000
100.000 100,000 1,900 101,900
200.000 200,000 1,000 201,000
100, 000 21 103, 741 103, 741
30.000 (C)30,000 30,000
100,000 100,000 500 100,500
50.000 41,241 41,241
100,000 100,000 53,000 153,000
50,000 56, 606 56,606
100,000 40,000 69,000 109,000
100,000 70,442 21,000 91,442
100,000 90,000 6,490 96,490
100.000 23,384 1,000 24,384
50, 000 26, 100 26, 100
200.000 155,786 155,786
50, 000 48, 505 48, 505
508
Maytag, L. B
Miller, Edward-Employees of
Miller, Otto..
Mitchell, Charles & Assoc
Moore, John_.-
Mulcahy, John
Olin, John...
Spencer.
Pappas, Thomas ..........
Pfleger, George ......
Robertson, James..
Riklis, Meshulam
Rockefeller family
Rockwell, Willard F. (employees)
Rollin, John
Safer, John.... .....
Saluaturi, Henry
Scafie, Richard ....
Schreiber, Taft.. ...
Schuler, John.
Shaheen, John.-_.^'a- *,._■« .
Simon, William..
Spater, George .....
Stein, Jules ....
Stein brenner, George ....
Stewart, James E
Stone Clement
Symington, J. Fife
Terra, Daniel J
Townsend, Lynn, Employees
Walker, Elisha....
Wallace, De Witt
Warner, Jack
Washburn, Mrs. Donald
Watson, Arthur
Watson, Tom
Watt, R. A ...
Colorado Springs, Colo.
Seattle, Wash .....
San Francisco, Calif....
New York, N.Y
Dublin, Ireland
Bronxville, N.Y...
St. Louis, Mo
Boston, Mass. ,
Newport Beach/Calif.
San Francisco, Calif..
New York, N.Y
do
El Segundo, Calif
Wilmington, Del
Bethesda, Md
Los Angeles, Calif
Pittsburgh, Pa
Los Angeles, Calif...
Leeds, Ala..
New York, N.Y.
do ....
Chicago, III
Los Angeles, Calif...
Cleveland, Ohio
Greenwich, Conn
Chicago, III.
Paradise Valley, Ariz.
Kenilworth, III......
Detroit, Mich
New York, N.Y
ML Kisco, N.Y
Los Angeles, Calif
Corona del Mar, Calif.
New Canaan, Conn...
Greenwich, Conn
Los Angeles, Calif —
National Airlines
Time Oil Co
Standard Oil of California
City Service _
Ambassador— Ireland
Ouigleyco. (Phifzer Sub.).
Olin Corp...
Esso Pappas Refinery ......
Emerson Electric Co
Goldman Sachs..
Rapid American Corp
Rockefeller Foundation..
N. A. Rockwell
Rollins International
Real estate 30 __
Grant Oil & Tool Co..
Mellon Banking-Gulf Oil
Music Corp. of America...
Anderson Electric Co
MacMillan Ring Free Oil Co
Salmon Bros
American Airlines 32 _____
Music Corp. of America
American Ship Building Co. 33
Lone Star Ind. (Union Oil)
Combined Insurance Co
Ambassador— Trinidad & Tobago 34
Lawter Chemical Co
Chrysler Corp. 33
Dir., Petroleum Corp. of America. .
Readers Digest..
Warner Bros
Ambassador— France 3 ?_.„
Chm., Exec. Comm., IBM
Watt Industries
Not solicited
No goal
50, 000
No goal
10 , 000
3, 000,000
100 , 000
id6,~ooo
50, 000
50. 000
No goal
200, 000
100.000
250, 000
250.000
100. 000
1,000,000
100, 000
25, 000
100,000
100,000
100 , 000
150, 000
100,000
50,000
3, 000,000
100, 000
250. 000
100 , 000
100 , 000
100. 000
100,000
50 . 000
300, 000
25.000
100, 000
50,000 ... 50,000
2*25,000 ----- 25,000
26 50,000 50,000
26 28, 000 28, 000
10,442 10,442
573,558 26,000 599,558
100, 000 4, 500 104, 500
(94 413)
100[ 672 — “J-qqq 101, 672
47,088 47,088
32,500 32,500
"50,000 141,000 27 191 . 000
200. 000 69, 000 23 269, 000
20 98, 270 2, 500 100, 770
245,023 15,500 260,523
250.000 1,000 251,000
99,415 12,458 111,873
1, 000, 000 3, 500 1, 003, 500
66, 101 9, 700 75, 801
17,018 10,536 27,554
104,000 104,000
si 100, 000 2, 500 102, 500
75,000 75,000
117,822 117,822
100.000 .... 100,000
(C)50, 000 47, 525 97, 525
2, 000, 000 73, 054 2, 073, 054
100.000 1,500 101,500
250. 000 5, 000 255, 000
35 117,626 117,626
100.000 100,000
100,000 3,900 103,900
100. 000 10, 500 no, 500
36 50, 000 10, 520 60, 520
300.000 3,000 303,000
15,500 15,500
86, 568 4, 000 90, 568
509
INDIVIDUALS SOLICITED BY HERBERT W. KALMBACH AND ACTUAL CONTRIBUTIONS— Continued
Name
Address
1972 affiliation
Goal
Pre-April 7 h
Post 12
Total
Webb, Dell
Willard, Lebaron
Whitney, Cornelius V
North Hollywood, Calif
Baltimore, Md
Lexington, Ky
Chm., Del E. Webb Corp
Chm., Commercial Credit Co
Whitney Industries
50, 000 -
3, 000
50,000
87, 676
3, 000 6, 250
38 9, 000 42, 000
87, 676
9,250
51,000
Total
13,441,452
8, 835, 040
1, 823, 356
10, 658, 396
11 The totals for the pre-April 7, 1972 contributions came from one of two sources: (a) The “Rose
Mary Woods List." This is a list of pre-April 7, 1972 contributors obtained from the White House;
(b) The “Common Cause List." This is a list of pre-April 7, 1972 contributors which was ordered
filed by Judge Joseph R. Waddy in the case Common Cause, et al v. Finance Committee to Reelect the
President, et al. The list was filed in United States District Court, Washington, D.C. on September 28,
1973 by Kenneth Wells Parkinson, attorney for FCRP.
12 The “GAO List" the totals for the past-April 7, 1972 contributions came from a list supplied the
Office of Federal Election of the General Accounting Office (GAO). Section 304 of Federal Election
Campaign Act of 1971 requires disclosure of all contributions in excess of $100 to the Office of Federal
Elections.
is Appointed Chief of Protocol for the White House on April 2, 1974.
14 Resigned as Ambassador to Jamaica, August 1973. (See section on Ambassadorships.)
Appointed as Ambassador to Luxembourg in February 1973. (See section on Ambassadorships.)
16 Appointed as Ambassador to Belgium in March 1974, Chairman of the California Finance Commit-
tee to Re-elect the President.
17 In an affidavit to the Southern District Court of New York, Fisher said $40,000 came from his
safe deposit box at the Detroit Bank and Trust Company and the remaining $85,000 from personal
funds retained in a safe located in his home. This is an approximate total. The contribution was in the
form of Marathon Oil Co. stock and was given on January 16, 1973.
18 Represents contributions by Henry Ford, Mrs. Edsell Ford and Benson Ford.
18 This figure was obtained from the Rose Mary Woods list under the heading of Employees of Gen-
eral Motors. Gerstenberg's personal contribution was $3,500 which was included in the total.
20 Appointed Ambassador to the Netherlands in September 1973.
21 Includes $10,000 by Heinz U.S.A., Division of H. J. Heinz & Co.
22 See section on Corporate Contribution for Northrop Corp.
23 Appointed Ambassador to Kenya in December 1973.
24 Listed as employees of Time Oil Co. on Rose Mary Woods list.
25 Listed as employees of Standard Oil of California on Rose Mary Woods list. Listed as Otto Miller
and Associates on the Common Cause list.
2 ® Listed as Employees of City Service on the Rose Mary Woods list and as Charles Mitchell and
Associates on the Common Cause list. Mitchell is deceased and no one at City Service acknowledges
to any knowledge of the contribution.
27 Riklis also gave Hubert Humphrey $100,000.
2 « Includes contributions by David John and Lawrence Rockefeller and Abby R. Mauze.
22 Rose Mary Woods list under employees of North American Rockwell. Common Cause list shows
Rockwell personally contributed $1,510 prior to April 7, 1972.
30 See section on Ambassadorships.
31 Rose Mary Woods list as employees of Salomon Bros. Common Cause list credits Simon with
$15,000 pre-April 7, 1972.
32 See section on Corporate Contributions for American Airlines, Inc.
33 See section on Corporate Contributions for American Ship Building Co.
34 Resigned as Ambassador to Trinidad and Tobago in November 1971. At that time he had already
agreed to a contribution. (See section on Ambassadorships.)
35 See above section for more detail.
36 Rose Mary Woods list shows the contribution was Ms. Donald M. Washburn but Common Cause
list indicates it was from Gene Washburn.
37 Resigned as Ambassador after making contribution.
33 Whitney contributed $250,000 in June 1971 which was returned in October or November 1971.
For more details see section on Ambassadorships.
511
IV. UNION ACTIVITY
Labor unions, with membership in excess of 18 million and assets
in excess of $4 billion, are at the very least one of the most potent
political forces.
As noted in the section of this report on the results of question-
naires sent to union officials, union political action arms played a
major funding role in the Presidential campaign of Senator Mc-
Govern. Although using a bipartisan approach, most of the principal
unions directed their major efforts to giving support for Senator
McGovern.
Two instances of the activities of unions and their political action
arms warrant comment — one involving the United Farm Workers,
AFL-CIO and the Farmworkers Political Education Fund and, the
other, the Seafarers International Union and the Seafarers Political
Action Donation Committee.
A. Farmworkers Political Education Fund
One unusual instance wherein campaign contributions were fur-
nished to a union came to the attention of the committee through the
testimony of Ms. Delores Huerta. On October 26, 1973, Ms. Huerta, in
testimony before the Senate Select Committee, described the activities
and relationship between the 1972 Presidential committee, El Pueblo
con McGovern, and United Farm Workers, AFL-CIO, and the Farm
Workers Political Education Fund.
Ms. Huerta furnished information to the committee concerning the
participation of union members in political activities for the Mc-
Govern Presidential campaign and furnished documents with regard
to the funding of these activities. The entire amount of money raised
by El Pueblo con McGovern, a campaign committee composed of union
leaders and supporters, in 1972 was contributed to it by various Mc-
Govern campaign committees, including McGovern Central Control
Fund, a Presidential committee, in a total amount of $75,200. A break-
down is as follows :
Contributions (or transfers) to El Pueblo con McGovern:
McGovern Central Control Fund (5/23/72) $5,000
McGovern Central Control Fund (5/30/72) 12,500
McGovern Central Control Fund (6/2/72) 25,000
Democratic National Committee (8/24/72) 10,000
Democratic National Committee (9/28/72) 1,200
McGovern Campaign Committee (9/12/72) 10,000
Northern California McGovern Campaign Committee (9/14/72) 1,500
Total contributions from McGovern campaign 75, 200
Other contributions :
United Farm Workers, AFL-CIO (this contribution is an error on
reports and should be considered an expense) (10/31/72) 1, 503. 74
Miscellaneous 16. 75
Total contributions 76, 720. 49
Total expenditures of El Pueblo con McGovern were $72,586.34. Of
this amount, a total of $36,593.28 went directly to United Farm "Work-
ers, AFL-CIO or its satellite groups for the reasons detailed below :
35-687 O - 74 - 34
512
United Farm Workers, AFL-CIO, “reimbursement for office rent, over-
load and buses” (7/25/72) $4,921.30
National Farm Workers Service Center, Inc. “office rental” (8/30/72) _ 113. 86
United Farm Workers, AFL-CIO “reimbursement for personal serv-
ices” (7/25/72) 11,538.00
Robert F. Kennedy Farm Workers Medical Plan “reimbursement for
personal services” (6/6/72) 700.00
National Farm Workers Service Center, Inc. “reimbursement for per-
sonal services” (6/5/72) 1,230.00
United Farm Workers, AFL-CIO “reimbursement for personal services
National Farm Workers Ministry “office overhead and supplies”
(10/7/72) 1,172.43
National Farm Workers Service Center “office rental” (10/7/72) 115. 82
36, 593. 28
Ms. Huerta testified that in August of 1973 the McGovern Central
Control Fund gave to the Farm Workers Political Education Fund a
remaining cash balance in the amount of $4,134.15 as “a gift.” This
$4,134.15 came to the McGovern Central Control Fund from El Pueblo
con McGovern when that committee terminated its activities.
B. Seafarers Political Action Donation Committee
The Seafarers Political Action Donation Committee (SPAD) was
established by the Seafarers International Union in 1962 for the pur-
pose of “accepting voluntary contributions by rank and file members
of the union and to make disbursements on their behalf for political
purposes.” On October 31, 1972, SPAD applied to the Chemical Bank
of New York for a loan of $100,000. The next day, November 1, loan
agreements were reached, $100,000 was placed in SPAD’s account with
the bank, and the following day a check for $100,000 was made payable
to the Finance Committee To Re-Elect the President.
According to John Wynne, general counsel of the Chemical Bank
of New York, and Leo Schneider, vice president of Chemical Bank,
the bank was initially contacted by Ralph Buchbinder, an accountant
retained by the Seafarers, by telephone on October 31, 1972. Schneider
then prepared a memorandum concerning the loan that same day and
forwarded it to bank vice president Frank Fredericksen who is the
vice president in charge of “political loans.” Fredericksen approved
the loan because it seemed to be, in all respects, legal to him. 39 Fred-
ericksen stated that he had the final say on whether the loan was ap-
proved and any discussions of the loan did not go any higher than
himself. 40 The loan was supposed to have been repaid in 3 to 6 months,
but the final payment was not received until October 16, 1973.
Howard Schulman, general counsel for the Seafarers Union and
SPAD, and DiGiorgio, in staff interviews, corroborated the above
account. They explained that Mr. Nixon’s record in aiding the re-
vitalization of the maritime industry had prompted the contribution.
They produced a statement issued by Paul Hall, president of the Sea-
farers International, on October 19. 1972. announcing the formation
of the National Maritime Committee To Re-Elect the President. Hall
30 When asked as to whether he had taken section 610’s ban on Union moneys raised
through “commercial transactions” into account, he said that he was unfamiliar with this
provision. In addition, section 610 requires that unions ean raise political contribution
funds only from the voluntary acts of its members. Thus, it appears that the ability of
SPAD to repay the loan would depend upon the willingness of SIU members to contribute.
40 The Chairman of the Bank’s Executive Committee, Harold B. Helm, was co-chairman of
FCRP.
513
was the national chairman for this committee which represented
management and labor from all segments of the maritime industry.
In his statement, Mr. Hall listed five definitive actions, including the
passage of the Merchant Marine Act of 1970, the first new maritime
legislation since 1936, taken by the Nixon administration to strengthen
the maritime industry. At the conclusion of his statement, Mr. Hall
said, “We, in the maritime industry, have found, on the basis of
performance, that we can believe in Richard Nixon. We in the mari-
time industry, therefore, support his candidacy for reelection.” 41
Both men interviewed indicated that they knew of no solicitation of
any union or SPAD official by officials of the FCRP.
The $100,000 check for the Finance Committee To Re-Elect the
President was delivered to Herbert Brand, president of the Trans-
portation Institute of Washington, D.C., because he was a member of
the Maritime Committee To Re-Elect the President and was located
in Washington, D.C. Brand, in a telephone interview, said he was not
aware of the Seafarers’ contribution until it was delivered to him on
November 3, 1972. He said he delivered the check to FCRP head-
quarters in Washington on November 6 and gave it to Tom Evans
because he was the only person that he knew there. 42
The Select Committee — whether by its questionnaires or its limited
investigations — made no attempt to engage in a comprehensive survey
of union political activity. It is believed, therefore, that an appropri-
ate committee of Congress should review certain questions not consid-
ered in detail by this committee. Among these questions are :
1. What is the structure and nature of union political and
educational committees ?
2. What are the techniques by which the rank-and-file
membership are solicited to participate with their dollars ?
3. To what extent is the participation by union member-
ship voluntary, and what pressures, if any, are brought to
bear to insure participation ?
4. Is there a minimum level (dollars) of required or ex-
pected participation?
5. After having participated, what voice does the union
member have in the decision relating to the ultimate dis-
tribution of the funds collected ?
6. What accounting is made to the union member concern-
ing the use of his political contribution ?
7. Are the representations and educational materials made
available to union members broad in spectrum or related to a
specific candidate and party ?
8. Are individual union members afforded the opportunity
to have their political views published in in-house organs
41 On .Tune 30, 1970, Paul Hall, seven other union officials, and SIU were indicted for
violations of the Corrupt Practices Act on charges of conspiracy to contribute union funds
to a political campaign. In May 1972, the case was dismissed by the U.S. District Court
sitting in Brooklyn for failure on the part of the Justice Department to prosecute the case.
The Justice Department decided not to appeal the dismissal. Union officials state that there
was no connection between these events and SPAD’s contribution, and no evidence has been
found to contradict these statements.
42 The contribution was not reported for two months. Section 304(a) of the Federal
Elections Campaign Act of 1971 states that “any contribution of $5,000 or more received
after the last report is filed prior to the election shall be reported within 48 hours after its
receipt.”
514
when they differ from the publicly stated position of the prin-
cipal union executive ?
9. Is the public endorsement by the union executive based
on a vote of the union members?
V. ROBERT H. ALLEN— MEXICAN CHECKS
A search by police of the five men arrested in the “Watergate bur-
glary” on June 17, 1972, produced $6,500 in new $100 bills, most of
which were serially numbered. In the process of tracing these bills
it was discovered that five checks totaling $114,000 originally contrib-
uted to the Finance Committee To Re-Elect the President had been
run through an account of one of the Watergate burglars, Barnard
Barker. F our of these checks, totaling $89,000, had been drawn on an
account in the Banco International of Mexico City and were payable
to Manuel Ogarrio Daguerre (Ogarrio) , a Mexican national. 43 Shortly
afterward, it was established that Ogarrio used a $100,000 check
drawn on the account of the Compania de Azufre cle Veracruz, S.A.
(hereafter referred to as CAVSA), to negotiate the four bank drafts.
CAVSA is a wholly owned subsidiary of Gulf Resources and Chem-
ical Co., Houston, Tex.
The sequence of events that set this transaction in motion had its
origin in late 1971 or early 1972, when a group of prominent Houston
area businessmen joined together to form a loosely knit organization
known as the “Texas ad hoc Fund Raising Committee.” The purpose
of this committee was to raise funds for the President prior to the
effective date of the new disclosure law on April 7, 1972. Included
among the members of the group were William Liedtke, the president
of Pennzoil and the unofficial chairman of the ad hoc committee ; Roy
Winchester, Pennzoil’s vice president in charge of public relations;
and Robert Allen, the president of Gulf Resources and Chemical Co.
On March 10, 1972, Maurice Stans met with the ad hoc committee
in Houston to discuss their fundraising activities. A few days after
this meeting, Liedtke said he received a call from Allen who informed
him “he could raise some funds, United States funds in Mexico.” 44
Allen, who had met Stans for the first time on the 10th, asked Liedtke
“to check with Maury and see if that created any problems. 45 Allen
testified he asked Liedtke “to see if there were any problems with a
U.S. citizen making a contribution through Mexico.” 46 Liedtke called
Stans who indicated he would get back to him later with an answer.
Allen has since confirmed the citizen he was referring to above was
himself, and the reason he was considering Mexico was his desire to
maintain his anonymity. He stated :
When I spoke to Liedtke, a sort of vague or undecided
route was to sell securities that I had and to make a transfer
to another bank, perhaps a Mexican bank . . .
... I knew full well if I made a contribution in the usual
manner, that is to just write a check to Liedtke, that first of
all my bankers would know and secondly my stockholders
43 The fifth check was the Dahlberg-Andreas check for $25,000. What are popularly
referred to as the Mexican checks are technically termed bank drafts.
44 Statement of William Liedtke, Sept. 6, 1973, p. 10.
45 Ibid.
40 Allen executive session, June 7, 1974, p. 45.
515
would know and I would have to assume in our stockholder
group, and there would be the usual speculation about why
I made the contribution and I would expect from it the usual
unfavorable let’s say distasteful aspect of it. 47
Allen testified that between March 10 and March 21 he discussed
with his attorney, Richard Haynes, the legality of a contribution
made in this manner. When asked about the context of the conversa-
tion Allen invoked attorney-client privilege. 48
On March 21 Allen went to Mexico City to see Ogarrio, who for
many years had been retained by CAVSA as its labor counsel. The
stated purpose of the Allen meeting with Ogarrio was to discuss a
fee allegedly owed to Ogarrio by CAVSA for work done in connec-
tion with the shutdown of CAVSA in 1970. 49 Allen stated Ogarrio
“had the assignment of complying with the labor law, which basi-
cally says that we had to pay each man 3 months plus 30 days for each
year worked for us, and getting approval from the labor department
and getting negotiations completed with the union to accept what-
ever plan was adopted.” 50 Also, because of a new labor law being
enacted, it was necessary for these negotiations to be completed prior
to mid-1970. Allen related, Ogarrio not only satisfactorily completed
his work prior to the enactment of the labor law, thereby saving the
company a substantial amount of money, but secured a settlement
for $250,000 less than the company’s reserve for the settlement. Ogar-
rio was to be compensated above his retainer for these services.
Allen stated the reason Ogarrio had not been paid earlier by CAVSA
was that the fee asked by Ogarrio was considered too high, and Diaz de
Leon, president of CAVSA, had requested Allen to speak with Ogarrio
personally. De Leon sent Allen a memorandum 51 to this effect which
is dated December 17, 1971. Allen also stated that on numerous occa-
sions De Leon had orally requested that Allen speak to Ogarrio. Allen
said because of bther pressing matters, March 21, 1972 was the first
opportunity he had to see Ogarrio.
Allen claimed that Ogarrio had been orally requesting a $250,000
fee, 52 even though he, Ogarrio, had submitted a bill to De Leon on
July 7, 1971 for $125, 000. 53 Allen explained that this $125,000 state-
ment was not a final bill but rather a negotiating document and that
despite its submittal Ogarrio was still discussing a $250,000 fee.
Ogarrio, Allen, and De Leon met immediately after Allen’s arrival
in Mexico City on the 21st. Allen related that they had a candid meet-
ing in which fees ranging from $250,000 amount downward to the
$125,000 bill and below were discussed. Allen said that no final settle-
ment was reached and that lie instructed Ogarrio “to go back and
47 Allen executive session, June 7, 1974, p, 51 ; if Allen planned to sell securities as he
stated, there would be no need for a Mexican bank, as he could negotiate the brokerage
firm’s checks into cash anywhere. Experienced fundraisers know, as Allen did when he men-
tioned it to Liedtke, that cash is the most anonymous way to contribute.
48 Allen executive session, June 7. 1974, p. 48. Allen later indicated that Stans had
answered him before he was able to talk with Haynes. Stans and Liedtke both testified the
opinion as to the propriety of the transaction was not given by Stans until April 8.
49 CAVSA ceased its mining operations in the late 1960’s but has continued to function on
a limited basis ever since.
50 Allen executive session, June 7, 1974. op. 16 and 17.
51 Allen executive session, June 7, 1974. The memorandum is a full page in length and
according to Allen, was personally typed by De Leon.
62 This figure represented the difference between the reserve and the amount actually
expended on the entire amount which Ogarrio says he saved CAVSA.
53 Allen executive session, June 7, 1974, Allen identified the handwriting as belonging
to De Leon. Creel was associated with Ogarrio in the practice of law in Mexico City.
516
sharpen his pencil.” When asked if there was any further discussion
concerning the amount of the bill Allen replied : “We left it in a very
cordial way, that he would communicate with Diaz de Leon and let
Peppy (De Leon) know what his bottom line was, and my clear indi-
cation to him was that we would pay it.” 54
Allen said he had no discussions with Ogarrio concerning this fee
subsequent to this meeting.
Allen and Ogarrio met again on the 24th, Allen’s last day in Mexico.
Allen said at this meeting, for the first time, he turned to the question
of raising money to make his contribution to FCRP. However, he
decided not to disclose to Ogarrio the intended purpose of the needed
money. Allen described this meeting with Ogarrio :
On that Friday or the last day that I was there I had
lunch with him and told him that I had a project that I was
contemplating pursuing, and that it -would require short term
financing or some short term financing ; and that I had con-
cluded that I wanted to arrange to obtain financing outside the
eastern area, and that I was undecided; I had not deter-
mined what the amount would be, but it would be no less than
$50,000 and no more than $100,000, and that I wanted his
advice on what sort of collateral he felt might be required
for such financing from a Mexican bank, pointing out to him
that I knew people in the banks there very well and having
done as much business as we have done, and that how long
did he think it would take. I explained to him, if I did not get
it done by April 1 1 was not going to pursue it.
His response was that was I aware Holy Week was coming
up and the banking community closes down in Mexico on
Holy Week, as most other businesses, and that that might
interfere with it. But he felt that there would be no problem.
He asked me what kind of collateral I might have available.
I told him I could put a substantial amount of money on
deposit as an example, or I could perhaps use stocks as
collateral, something of that nature.
And I told him that I might even be able to arrange
a guarantee from a TJ.S. bank if that was necessary. In other
words, w T e agreed that there was collateral. So that was the
nature of my explanation.
He said, well, that he was not — as I say, this was on Fri-
day, I believe — that he was not sure that it would be
possible to get it done before April 1. But maybe a few days
after that. Without telling him why, I just said April 1 was
my sort of personal deadline. I either had to do it by then or I
was not going to pursue that route. He said, well, if we are
only talking about for the short term financing. I said, no
more than 1 80 days.
He said, that should not take us more than a couple of
weeks to get it done anyway, even with the financing. When
are you coming back ? I said, 1 will be back again next week
or within the next 10 days.
He said, well, if there is any real problem and you really
are concerned about April 1, I will advance you the money
54 Allen executive session, June 7, 1974, p. 39.
517
you need. We talked about that a little bit. You know, first
I said I would not want you to do that. He said, well, T insist.
You know, the usual sort of things that particularly Mexican
businessmen or friends like he would say. So I said, well, in
that case if I decide to do it I will leave a note and I will
get right down to it and get it done. And that was the total
substance of our conversation. 55
Despite having told Ogarrio that he would be back in the next
week to 10 days when he would complete the transaction, Allen stated
that :
I went back to the office either that afternoon, or before I
left town, anyway, and typed up a very simple promissory
note, 50 one that was designed to indemnify or at least to pro-
tect, to protect Manuel if I got run over by a truck or some-
thing, and put it in an envelope, signed it, left the dates
blank, handed it to Diaz de Leon and told him I might want
him to take care of some business for me that had to do with
Manuel Ogarrio. and I’d be in touch. 57
The note prepared by Allen personally was for the amount of
$100,000, the higher of the two amounts, according to Allen, that
he had mentioned to Ogarrio.
Allen said he called Ogarrio after writing the note, but before
leaving town, and told him that either he or De Leon would be in
touch with him if he decided to go through with the project. On the
way out of Mexico, Allen said that De Leon “told me that Manuel
(Ogarrio) had called him and said that he was going to pare his
$125,000 bill by $25,000, but he was going to add back some ex-
penses.” 58 Win m Allen got back to Houston he told Arthur Urech,
vice president of finance, “that the matter with Ogarrio had been
settled and Diaz de Leon would be talking about it; and I thought the
settlement was $100,000 to go ahead and process it.” 59
On April ?>, 1972, Liedtke called Stans, because he had never re-
ceived an answer for Allen on the Mexican funds. Stans told Liedtke
to call back that afternoon, and he would have an answer. 69
Stans testified at public session :
On April 3 of last year, I received a telephone call from
Liedtke who was then our finance chairman for the State of
Texas. He said, “I have a U.S. citizen residing in Texas,
who is a prospective contributor for $100,000, but he wants
to give it in U.S. funds that are now in Mexico. Is this legal ?”
I said, “I am quite sure it is, but let me check again and I will
call you back.”
55 Allen executive session, June 7, 1974, pp. 49-51.
66 Allen executive session, June 7, 1974, exhibit 6, p. 54.
67 Allen executive session, June 7, 1974, p. 54.
58 Allen executive session, June 7, 1974, p. 70. _
150 Allen executive session. June 7. 1974, p. 70. Although, according to Allen, he had talked
to Ogarrio twice before leaving Mexico' City, a fee settlement was never again mentioned.
When first interviewed by committee investigators, on Sept. 4, 1973, Allen related that he
did not know the exact amount of the settlement or when it was paid. In a telephone
interview in June 1974, Urech said that Allen, upon returning from Mexico told him that a
settlement with Ogarrio was at hand and to check with De Leon. Urech did not think that
Allen mentioned how much the settlement was going to be.
80 Statement of William Liedtke Sept. 10, 1973, p. 10.
518
I checked with our counsel, found it was perfectly legal
for a U.S. citizen to give any foreign funds he wanted, and
called back to Liedtke and told him so. 61
Liedtke notified Allen it was all right to bring the funds up.
On April 3, apparently without further word from Ogarrio as to the
amount of the settlement, $100,000 was telephonically transferred from
Gulf Resources & Chemical Co. to the CAVSA account at the Banco
International. 62
According to Allen, this payment was received by CAVSA and
converted to a check to Ogarrio dated April 4, 1973. Allen testified that
on April 4 he was in New York, and he called De Leon from the air-
port there. Allen told De Leon to fill in the April 4 date on the note
also ; “I told him to deliver the envelope to Mr. Ogarrio, to assist him
in any way that he could, to take the proceeds of the note and to deliver
them to Mr. Winchester’s office at Pennzoil.” 63 Ogarrio had received
no further notice regarding the loan since he and Allen talked on
March 24. Allen also told De Leon to obtain cash from Ogarrio and
instructed him when the money had to be there.
In addition to the envelope which Allen says De Leon delivered
on the 4th, De Leon also took Ogarrio a CAVSA check for $100,000
in payment of Ogarrio’s bill. (A report by the accounting firm of
Arthur Anderson & Co. to the audit committee of Gulf Resources &
Chemical Co. dated May 4, 1973, notes that they were unable to locate
either an invoice or receipt in support of the $100,000 payment to
Ogarrio.)
Allen acknowledged that between speaking with Ogarrio on March
24, and the delivery of the note to him on April 4, he had not com-
municated with Ogarrio. He also acknowledged that there had been
no agreement as to an interest rate even though in typing the note he
stated an interest rate of 10 percent per annum. In fact, although Allen
said that he and Ogarrio were talking about a loan in the range of
$50,000 or $100,000, he proceeded to prepare the note for $100,000
without further raising the question with Ogarrio.
According to Allen, De Leon attempted to comply with his instruc-
tions. However, he encountered difficulties. De Leon called Allen
later on the 4th to inform him that they were not able to secure enough
cash. After some discussion, a combination of bank drafts and cash
were decided upon and the proceeds were given to De Leon.
Per Allen’s instructions, De Leon delivered $100,000 consisting of
four checks totaling $89,000 and $11,000 in cash to Winchester and
Liedtke at Pennzoil’s office in Houston on the afternoon of April 5.
As recounted by Liedtke and Winchester, De Leon asked for a receipt
but Liedtke related : “I told him that we didn’t want to give him a
receipt, that he could get a receipt from Washington, that we were
61 2 Hearings 699.
On Aug. 30, 1972, House Banking and Currency Committee investigators interviewed
Stans. According to that Committee’s report, Stans was asked three questions: (1) Have
you at any time authorized the transfer of campaign funds — through a foreign country?
(2) Have you participated in any way in plans to transfer campaign funds to Mexico or
any other nation and (3) Have you at any time been aware that any State or local finance
committee of the Republican Party at any level has been engaged in the transfer of funds to
Mexico or any other country? The report states that to each of these questions Stans gave
a one word answer, “no.”
82 Urech said that he was notified by De Leon on April 2 or 3 that a settlement had been
reached with Ogarrio and the $100,000 was needed. When asked if either De Leon or Allen
had expressed an interest in transferring the money immediately, Urech said Allen had not,
but he could not recall whether De Leon had or had not.
63 Allen executive session, June 7, 1974, p. 61.
519
merely agreeing to transmit the funds to Washington * * *” Do Leon
did not mention the source of the funds.
The $100,000 was placed in a suitcase which already contained some
$600,000 raised by six other ad hoc members. Late that afternoon
Winchester and another Pennzoil employee flew to Washington by a
Pennzoil Co. jet. At 10 pan. on the evening of April 5, Winchester
delivered the $700,000 to Hugh Sloan at FCRP headquarters in Wash-
ington, D.C. The following day Winchester went back to FCRP head-
quarters to give an accounting of the funds. With regard to the $100,-
000 raised in Mexico, Winchester said he listed Allen as the person who
raised the money. Asked why he did not list Ogarrio as the donor of the
$89,000, Winchester and Liedtke said they knew that Ogarrio was
not the donor. Asked further how they could be sure of this, they
replied, “We just kneAv.” 64
Sloan testified that he received the four Mexican checks from Win-
chester, 65 but was unsure how they were to be handled. He checked
with Stans, and out of this conversation, it was decided to seek the
advice of committee counsel G. Gordon Liddy. It was decided that
Liddy would take care of the checks.
Liddy took the five checks to Florida where he asked Bernard Barker
to cash them. Barker returned the proceeds to Liddy some weeks later.
Liddy then placed the funds, less $2,500 for “processing,” in a safe in
Stans’ office where they were commingled with other cash funds.
On or about July 7, after it was discovered that the Mexican checks
had gone through Barker’s bank account, Frederick La Rue, an FCRP
official, called Roy Winchester to ascertain the source of the funds.
Winchester put La Rue in touch with Allen. La Rue warned Allen
that the FBI would be contacting him and Ogarrio. Allen, in turn, con-
tacted Ogarrio through He Leon to alert him of an impending visit.
According to an FBI report, when interviewed by agents on July 10,
1972, Ogarrio advised them that :
“* * * he was given a check for $100,000 which he negotiated
into the foregoing four bank drafts and cash * * * as a favor
to an American client for 20 years standing who he refused to
identify other than as a reliable American company with
operations in Mexico, continuing he said, he signed the
checks making them negotiable and turned them and the re-
maining $11,000 cash over to his client * * * and he believed
the purpose of the transaction was to convey the money to the
Republican Party anonymously.” 66
Subsequent to the La Rue-Alien telephone conversation, Allen,
Winchester, and La Rue met in Pennzoil’s apartment in the Water-
gate complex. Allen said he told La Rue “unless this can be straight-
ened out right away, we just want the money back.” 67 La Rue said he
never discussed the return of money with Allen.
Allen appeared before a grand jury in Houston, Tex., on Septem-
ber 7, 1972. According to an FBI account, he told the jurors that the
$100,000 contribution was a personal contribution by him. Allen con-
64 Report by the House Banking and Currency Committee ; Sept. 12, 1972.
65 Sloan, 2 Hearings 574.
60 From FBI memorandum dated July 18. 1972. from an interview with Ogarrio on July 10,
1972. Ogarrio has refused to make himself available to committee investigators. Likewise,
De Leon would not permit himself to be interviewed.
07 Allen executive session, June 7, 1974, p. 91.
520
ceded to the committee that in his testimony he did not refer to the
existence of the promissory note, which was the only physical evidence
documenting the $100,000 loan to him by Ogarrio. Allen said he was
not asked for the note nor did he voluntarily submit it.
Throughout the fall, Allen said he continued to have discussions
with Stans, Parkinson, LaRue, and others. Allen explained :
That, plus on numerous occasions I have said that the way
I think this can be solved best is just give me my money back ;
agonizing with them about the timing — you know, what sort
of publicity would come out about it ; quite candidly I was as
worried about doing anything at all that would interfere with
the election. I was finance chairman for the State of Texas.
There was a certain amount — there certainly, perhaps, would
have been a negative kind of indication to the people that I
was trying to get contributions at that time, if I in fact had
asked for money or had gotten it back. At the same time, of
course, I was spending practically every day trying to ward
off the press, who were making the most God-awful assump-
tions about the whole matter. You dream of them, they made
them. 68
In addition to Allen, his attorney, Haynes had conversations with
Parkinson and LaRue that concerned Allen’s contribution. When
asked to disclose the nature of these conversations, attorney-client
privilege was again invoked, even though these conversations were
between Haynes and third parties who were not his clients. The promis-
sory note came payable on October 2, 1972. Allen said that he told
De Leon to “tell Manuel Ogarrio that I am ready to do something.”
According to Allen :
By this time Ogarrio was in such terrible straits about the
way he was being pillaried and maligned by the press in Mex-
ico, his view was, look, let’s just do nothing until we see this
whole thing through. I know precisely what the situation is,
and we both feel uncomfortable about it. So I would say, by
his request, or mutual agreement, it was decided that I would
not pay the note until sometime he felt comfortable about it. 69
Six weeks later on November 16, 1972, Allen sent Ogarrio a per-
sonal check for $100,000. The funds used by Allen to cover his check
were obtained by borrowing $100,000 from a commercial bank. The
loan was a standard bank loan for 90 days.
It was not until December 15, 1972, that Allen paid the interest owed
on the Ogarrio note. He explained that “Ogarrio was suggesting per-
haps a substantial or meaningful fee ought to be tacked onto this
as a result of his considerable, because of the inconvenience, let’s say,
that he experienced, and perhaps the damage to his reputation, the
time spent, and so on.” 70 No such charge was ever levied.
Allen wrote to Stans on January 23, 1972, asking that his $100,000
be returned. In the last paragraph of Lis letter Allen states : “In addi-
tion to the above, there are personal reasons why I must request that
my contribution be returned.” A $100,000 check was drawn on the
68 Allen executive session, .Tune 7, 1974, p. 95.
69 Allen executive session, Tune 7, 1974, pp, 103-104.
70 Allen executive session, Tune 7, 1974, p. 105.
521
account of the Media Committee to Re-Elect the President and was
given the following day.
Three days later, on January 26, 1973, Allen issued a check payable
to the Republic National Bank of Houston to repay his $100,000
loan, which had been used to repay the Ogarrio loan.
When asked about his net worth. Allen indicated it was between
$1 million and $1.6 million, depending on the stock market. How-
ever, on a balance sheet supplied by Allen to the Republic National
Bank on October 31, 1972 by Allen, he lists his net worth at $782,000.
Thus, the $100,000 represented a contribution of 12.7 percent of his
net worth to President Nixon’s reelection campaign.
In deciding on the amount of his contribution Allen testified:
“It was not related to my net worth, really. It related to what I
thought would be a meaningful size contribution in relation to what
I would do for the next 4 years or maybe longer.” 71
The question of the Mexican checks surfaced again in the edited
transcripts of Presidential conversations. According to the transcripts
on March 13, 1973, John Dean and the President discussed the Allen
contribution :
Dean. Anyway, I don’t care about that. What happened
to this Texas guy that gets his money back? Was he — all hell
broke loose for him that week. This Allen.
President. No, no. Allen
Dean. Allen, not Duncan nor [unintelligible]. All hell
broke loose for Allen for this reason : He — the money appar-
ently originally came out of a subsidiary of one of Allen’s cor-
porations down in Mexico. It went to a la wyer in Mexico who
put it down as a fee billed to the subsidiary, and then the law-
yer sent it back into the States, and it came back up here. But
the weakness of it is that the, Mexican lawyer: 1. Didn’t have
a legitimate fee ; 2. It could be a corporate contribution. So Al-
len had personally put a note up with the corporation to cover
it. Allen, meanwhile, is having problems with his wife, and a
divorce is pending. And tax problems
President. [Inaudible] Watergate
Dean. I don’t know what that went in the letter. It wasn’t
used for the Watergate. That is the interesting thing.
President. It wasn’t?
Dean. No it was not. What happened is that these Mexican
checks came in. They were given to Gordon Licldy, and said,
“why don't you get these cashed?” Gordv Biddy, in turn, put
them down to this fellow Barker in Florida, who said he could
cash these Mexican checks, and put them with your Barker’s
bank account in here. They could have been just as easily
cashed at the Riggs Bank. There was nothing wrong with the
checks. Why all that rigmarole? It is just like a lot of other
things that happened over there. God knows what [why] it
was all done. It was totally unnecessary and it was not directly
invol ved in the Watergate. It wasn’t a wash operation to get
money back to Biddy and the like. 72
71 Allen executive session; .Tune 7, 1974. n. 111.
72 Presidential transcripts, March 13, 1973 ; pp. 137-138.
522
When asked by the committee staff about the basis for his statement
to the President, Dean said that he had no specific information con-
cerning the source of Allen’s contribution and was speculating.
During his committee executive session, Allen was asked about the
alleged corporate source of the contributions :
Dorsen. As a conclusory question, Mr. Allen, was there any
connection between the payment of a fee to Ogarrio for and
your obtaining $100,000 from Ogarrio as a means to make a
contribution to the President’s reelection campaign ?
Allen. None. 73
VI. NATIONAL HISPANIC FINANCE COMMITTEE-
BENJAMIN FERNANDEZ AND JOHN PRIESTES
One aspect of the Hispanic campaign effort was presented in pub-
lic hearings on November 7 and 8, 1973 through the testimony of
John Priestes, a Miami, Fla. builder, and Benjamin Fernandez, chair-
man of the National Hispanic Finance Committee (NHFC), an arm
of the Finance Committee To Re-Elect the President. In February
1972, Fernandez formulated the idea of a Hispanic finance committee
to solicit funds from Spanish-speaking citizens and presented it to
Maurice Stans, who gave it his approval. With an original goal of
$1,000,000, Fernandez managed to raise only about one-third of that
total. 74
Priestes’ potential as a contributor came to Fernandez’ attention in
late February 1972 at a cocktail party in Florida. According to Fer-
nandez, Carlos Nunez, a former associate of Priestes’, told him, after
ho had been introduced as chairman of the National Hispanic Finance
Committee, that a potential contributor was John Priestes. Priestes,
although not Spanish- American, was well known in that community
and had been active as an FHA contractor, building large numbers of
federally insured low-cost housing in Dade County, Fla. 75 At that
time, Priestes was receiving considerable publicity in the Miami
Herald which was describing an intense investigation of Priestes into
charges of FHA fraud and his imminent suspension by the FHA.
Nunez provided the committee with an affidavit describing his con-
versation with Fernandez, which included his statement to Fernandez
that “with all the problems at that time, I didn’t know if he (Priestes)
would be in the position to make any contribution.” 76
Fernandez decided to pursue the lead. He called Priestes and ar-
ranged to meet him the next day. As recounted by Priestes, he and
Fernandez discussed his problems with the FHA, and Fernandez
indicated that he knew of Priestes’ problems and was in a position to
73 Allen executive session, June 7, 1974, p. 128.
7 * 13 Hearings 5362-64, 5401. Although Fernandez stressed that he was engaged in a
selfless effort to work for the twin goals of enhancing the future of the President and
Spanish-speaking Americans, it appears that Fernandez’ own future was occasionally on his
mind. Thus, Fernandez did not dispute Priestes’ testimony that in their talks Fernandez
mentioned his interest in becoming Secretary of Commerce, but indicated that he had
received no promises from Stans and that his success as a fundraiser was not relevant to
his personal future. As Fernandez said, regarding his conversation with potential con-
tributors and supporters : “Inevitably, the conversation would lead to my own future, but
it was brought about by people who saw me in action during the campaign, who saw me on
television, who heard me on radio, who read about me in newspapers, and speculation ran
wild throughout the country among Spanish-speaking people that perhaps I would be the
first Spanish-speaking member of a Presidential Cabinet.” (13 Hearings 5363.)
75 13 Hearings 5366.
70 13 Hearings 5371, 5736.
523
help solve them. In return for his help, Fernandez wanted Priestes to
contribute $100,000 to the NHFC by cash or cashier’s check. After an
initial payment of $ 25 , 000 , Fernandez would introduce Priestes to
Maurice Stans, the former Secretary of Commerce, who had just taken
over as chairman of the FCRP. At- that time, according to Priestes, he
would be expected to contribute a second $ 25 , 000 , and Stans would, in
Priestes’ presence, call HUD Secretary George Romney. The balance
of $ 50,000 would be due when Priestes’ FHA suspension was lifted.
Priestes agreed to make the contribution by cashier’s check. Fernandez
advised Priestes to bring with him, when he was to see Stans, the press
clippings that Priestes had shown Fernandez which outlined his FHA
problems. 77
Fernandez’ account differs significantly, although he confirms that
Priestes was prepared to make a large contribution, that he listened to
Priestes’ story and that he agreed to arrange for Priestes to tell his
story to Stans. First, Fernandez testified that- the figure of $100,000
was never mentioned in the conversation; rather, he sought $50,000,
and Priestes indicated that he would be willing to contribute $25,000. 78
Second, cash was never mentioned. 79 Third, there was no discussion of
the problems Priestes was having until after the discussion of the con-
tribution had been completed, and then Priestes was concerned princi-
pally with the bad publicity and not the HUD investigation of him. 80
Fourth, according to Fernandez, Priestes maintained that he was inno-
cent and interested only in a fair hearing, and Fernandez said that
Priestes could address his concern for fair treatment to Stans. In addi-
tion, Fernandez testified that at no time did he have any contacts with
the FHA on behalf of Priestes or anyone else. 81
Priestes was supposed to deliver $25,000 to Fernandez on March 4,
but had not yet raised the money by that date. When he met briefly
with Fernandez at a charity ball on "the evening of March 4, and told
him this, they agreed that Priestes would bring the money with him
when he came to Washington to meet with Stans. 82
Priestes next met with Fernandez in the latter’s hotel room at the
Hay Adams Hotel on the evening of March 12, the day before the
scheduled meeting with Stans, for the purpose of getting last minute
77 13 Hearings 5329-30. 5335, 5349. Priestes testified that after the meeting he checked
with William Pelski, at the time the Director of the local FHA office. Pelski told Priestes
that Fernandez was “legitimate,’' which to Priestes apparently meant just the opposite, and
that “the job was going to be done.” (13 Hearings 5352) At the time of his testimony,
Priestes, who appeared voluntarily and without immunity, had pleaded guilty to making a
false statement to the IRS and FHA in connection with his FHA problems. The balance of
the charges against Priestes were dropped, although he was not protected from a prosecu-
tion for perjury before the Committee in case he lied. Pelski subsequently pleaded guilty to
conspiring to defraud the United States under U.S.C. § 371, in connection with the same
FHA investigation. Priestes informed the Select Committee that special favors received
from Pelski were responsible for his companies climbing from 19th to second among Dade
County, Fla., builders.
78 13 Hearings 5361, 5367-69.
76 13 Hearings 5361, 5369.
80 Fernandez also denied being told by Priestes’ former associate that Priestes had prob-
lems with the FHA and, while wealthy, might not be wdlling to make a contribution to
President Nixon’s reelection effort. Fernandez said he did not think it strange that a person
with Priestes’ problems was looking to make a large contribution. (13 Hearings 5370.)
81 13 Hearings 5367, 5369, 5383. When asked about a Miami Herald story dated Sept. 3
1972, purporting to quote Fernandez as saying that he was going to dig into Priestes’ FHA
problems, Fernandez claimed that the story misquoted him, (13 Hearings 5401.)
In addition, in a staff interview, Antonio F. Rodriguez, a White House consultant from
1971 to 1973, stated that he recalled that at some point in 1972, Fernandez came to him and
said that there -was a Cuban builder in Florida who w r as in trouble. Fernandez asked
Rodriguez if he might be able to help the man, because he was a potential contributor.
Rodriguez said that he refused to become involved.
82 13 Hearings 5331, 5372. Priestes was accompanied to the ball by a friend, Rosemarie
Jayne. In an affidavit submitted to the Select Committee, Ms. Jayne states that in late
February or early March 1972, Priestes told her that he was planning to make a $100,000
contribution and that the contribution would assist him in his problems with the FHA.
524
directions. Also present were Fernando Oaxaca, treasurer of the
NHFC, and J ose Manuel Casanova, Florida chairman of the NHFC.
As described by Priestes, there was some consternation in the group
because of the very recent disclosures concerning the $200,000 con-
tribution by ITT to the President’s reelection effort. ''“A s recounted
by Priestes, he objected to the fact that ITT, one of the country’s
largest corporations, was contributing $200,000 while he, a relatively
small builder, was being asked for $100,000: it was agreed to reduce
his anticipated contribution to a total of $50,000: $25,000 then, and
$25,000 when his suspension was lifted. Priestes presented the check
he had brought with him, which he had obtained as a loan from a
friend. It was made payable to the Republican National Committee
and Fernandez became upset, because, in no event, could it be used
by the NHFC or FCRP. 83
In his public testimony, Fernandez stated that: “There were no
discussions in that room with respect to Mr. Priestes’ donation. There
were no discussions with him with respect to the I.T. & T. matter, to
which he (Priestes) testified yesterday. None whatsoever.” 84
The meeting with Maurice Stans took place the following morning,
having been scheduled on March 8 by Fernandez and Hugh W. Sloan,
Jr., who at the time was treasurer of the FCRP. Sloan described the
circumstances of arranging the interview as follows :
About early March 1972 Mr. Fernandez indicated that he
wanted a big kickoff for the Hispanic Finance Committee
and said that he would start off with the potential contribu-
tors from Florida and mentioned that ho hoped that he had a
couple of contributors in the $100,000 class, including John
Priestes, whom he wanted Stans to meet. 85
Sloan advised Stans of Fernandez’ request, and Stans agreed to the
meeting.
Priestes arrived at the meeting with the $25,000 check and his port-
folio of press clippings. Priestes and Fernandez were ushered into
Stans’ office, where Priestes turned over the $25,000 check to Stans.
Again, there was concern over the check, both because it was not made
payable to FCRP or NHFC or some other arm of the campaign, but
to the Republican National Committee, and because the check was for
$25,000 and made Priestes subject to a gift tax. Priestes testified that
there was a discussion of substituting either a number of $3,000 checks
made payable to a reelection committee or cash for the $25,000 check. 86
In addition, Priestes presented Stans with his press clippings that
described his FHA problems. While Stans looked at them, Priestes
described his problems with the FHA. 87 According to Priestes’ testi-
mony, after he gave Stans the check and Stans made no effort to tele-
phone HUD Secretary Romney on his behalf, Priestes said that he had
been promised that Stans would call Romney. Priestes says he also
asked : “Do I have any reassurance here that I am going to get any-
83 13 Hearings 5332-34, 5351.
84 13 Hearings 5361, 5374-75. Casanova, in an affidavit (13 Hearings 5737), said the
meeting was brief and casual. In addition, however, he advised the committee that Fernan-
dez had mentioned the possibility that Priestes would contribute a total of $100,000. Oaxaca,
another associate of Fernandez, advised the committee staff that he could not recall the
substance of the hotel room conversation, but that Priestes was nervous and said that “he
needed action in a hurry.”
85 13 Hearings 5380, 5740.
86 13 Hearings 5336, 5342.
87 13 Hearings 5335.
525
thing for my money?” Stans told Priestes, “I will make a call and see
what we can do. If we cannot do anything for you we will return the
money.” 88
Fernandez denied that Priestes asked Stans to “pick up the tele-
phone and contact George Romney”. Rather, Fernandez recalled, Stans
quickly reviewed Priestes’ clippings and “probed as to the difficulties”
Priestes was having in Florida, which Priestes described as “minor
technical difficulties.” Stans then indicated that he was not knowledge-
able about Priests’ problems and indicated that he wanted to take a
look into his personal background, adding that, “If we find that you
are indeed in difficulties of a serious nature, we want nothing to do
with you and we want you to know this.” Fernandez quotes Stans as
saying, “Ben, do not deposit this man’s check until you hear from
me.” Fernandez testified that at no time was there discussion about
Stans making a telephone call to anybody. 89
Stans’ unsworn statement to the committee makes no mention of
any request by Priestes to telephone Secretary Romney and focuses
on two concerns of Priestes : first, that he was an unfair victim of the
Miami Hearld ; and, second, that he was afraid that HUD or FHA
would take action against him on the basis of the publicity and that
he wanted to be treated fairly. Stans’ statement reads:
7. I flipped through the file of newspaper clippings in his
presence and promised to read them later. I also told him that
I could not evaluate the situation without knowing FHA’s at-
titude toward him and his transactions ; that I would have to
check with FTUD. I returned the check either to Fernandez or
Priestes to hold until I had been able to do so. 90
At the conclusion of the meeting, Stans expressed his evaluation
of the meeting to Sloan, who described it to the committee in the
following language :
After the meeting, Mr. Stans was upset and expressed his
displeasure with the meeting to me, stating that the contri-
bution was not in the $100,000 class as he had been led to be-
lieve and further that he was concerned about Mr. Priestes
personally. Mr. Stans told me that we would have to have
better clearance of potential contributors who wanted to meet
him. 91
Following the meeting, Stans checked with both HUD and the
White House concerning Priestes. Stans was advised by both sources
to have nothing further to do with Priestes, since he was “unreliable
and undesirable.” 92 As related by Fernandez, Stans told him, “Much
as I hate to return this money to this man, we had better return it
because he is in trouble up to the ears and it will make us all look bad
if we accept his donation.” 98
Meanwhile, Priestes, upon returning to Miami, learned that, as he
had anticipated, his suspension had been announced on March 13,
1972. As testified to by Priestes, lie made repeated calls to Fernandez
8S 13 Hearings 5335-36. 5344.
® 18 Hearings 5361, 5378-79.
80 13 Hearings 5346-47. 5706-12.
81 13 Hearings 5380, 5740.
03 13 Hearings 5347.
03 13 Hearings 5381.
526
in California to ascertain what efforts were being made on his problem,
and Fernandez stated that he was working on it. 94 Fernandez, in his
testimony, said that he could not recall whether he had telephone con-
versations with Priestes after the March 13 meeting. 95
A few Weeks later, as recounted by Priestes, a representative of
Fernandez — whom Fernandez said he was unable to name — returned
the $25,000 check to Priestes and indicated that perhaps something
could be done for cash. When Priestes insisted that Stans witness
the transfer of the cash, the representative balked, and the matter was
dropped. 96
Thereafter, Priestes called Fernandez and discussed the above
contact with him. Fernandez said that he would make some telephone
calls and get back to Priestes. In what Priestes described as a complete
turnabout, Fernandez solicited $5,000 and said : “We never promised
you anything,” when Priestes asked about what benefit he would get
"from contributing. Priestes protested and became indignant, say-
ing “What was I doing in Washington with a $25,000 check; I’m not
even a Republican,” but Fernandez reiterated what he had said.
Fernandez testified that he could not recall soliciting Priestes for
a $5,000 contribution, that it was improbable — but possible — that it
occurred. 97
Priestes frankly asserted that he was seeking a quid pro quo for
his contribution. The issue was summed up in the following exchange :
Mr. Dash. Mr. Priestes, when Mr. Fernandez first dis-
cussed what help he might be able to obtain for you, accord-
ing to your testimony, for your contribution, did he put it
on the basis that he could help you obtain a fair trial or fair
hearing ?
Mr. Priestes. No, sir, I expected to receive a fair trial
without paying any money. I mean it was not- — there was
nothing to do with a fair trial, a fair hearing.
Mr. Dash. That was not mentioned at all ?
Mr. Priestes. No, because I made it clear that was not what
I wanted. I said that I didn’t want to make a contribution.
I was not interested.
Senator Ervin. You were like one of my clients I had one
time. He asked me what I could do and I said I will try to
get you justice. He said, that is the last thing in the world
I want. 98
VII. COMMITTEE QUESTIONNAIRES
In attempting to gather evidence of illegal, improper, or unethical
activities in connection with the 1972 Presidential campaign, a written
questionnaire was sent to a selection of about 700 individual contrib-
utors, corporate officers, and union executives in the fall of 1973.
A. The Sample Canvassed
The names of individual contributors were obtained from GAO
lists of post-April 7 contributors. Inasmuch as extensive personal
04 IB Hearings 5337.
05 13 Hearings 5381.
e « 13 Hearings 5337-38, 5386,
67 13 Hearings 5338, 5382.
88 13 Hearings 5355.
527
interviews were conducted with the largest individual contributors as
well as the largest contributors of cash, an effort was made to sample
a different cjass of contributors. Taken from the GAO lists were names
of individuals who were listed as having given $3,000 to either a Demo-
cratic or Republican Presidential candidate. Whereas all the Republi-
can contributors selected gave to President Nixon’s campaign, the
sample of Democratic contributors included contributions to a number
of candidates. Approximately 110 Republican and about 50 Democratic
contributors were sent questionnaires. If the spouse of the contributor
gave $500 or more to a Presidential candidate, he or she also was asked
to provide the committee with a completed questionnaire. The $3,000
figure was selected in part because of the anticipation — a correct one,
it turned out — that proposed legislation would place a maximum of
$3,000 that could be contributed by an individual to any particular
Presidential candidate. A copy of the questionnaire sent to an indi-
vidual is attached hereto.
The corporate questionnaire was sent to officers of a selection of cor-
porations appearing on the “Fortune 500” list — the same list used for
a direct mailing under the Weed-Scott corporate solicitation pro-
gram." The list included oil, insurance, textile, milk, business machine
companies, trucking and automobile manufacturers, banking and
accounting firms, utility companies, electronic companies, and defense
contractors. Taken into account in the selection was the size of the com-
pany and geographical distribution of the companies, in an effort to
gain as much of a cross section as possible. No effort was made to create
a scientific sample. Once the names of the corporations were selected,
questionnaires were sent to the chief executive officer, the chief fiscal
officer, and the officer in charge of Government relations. Those per-
sons known to have made a substantial contribution to a Presidential
candidate or who were under investigation were deleted from the list.
Finally, officers from 136 different corporations were selected and a
copy of the attached corporate officer questionnaire was sent to each.
A third questionnaire was sent to the top officials in 70 unions. Selected
for his canvass were national and international unions — not locals —
with a membership of at least 50,000. A copy of the questionnaire sent
to union officials is attached.
B. Results or Questionnaire Survey
Of the more than 700 questionnaires sent to individuals, and corpo-
rate and union officials, the committee received a response from officers
of every corporation and officials from every one of the unions can-
vassed as well as from 80 percent of the unaffiliated individuals to
whom questionnaires were sent.
It appears that the corporate questionnaire may have been respon-
sible for uncovering two corporate contributions and evidence of a
third offense. Among the corporations selected were Carnation and
Diamond International. Counsel for Carnation delayed their response
to the committee’s questionnaire until after holding discussions with
the special prosecutor’s office and advising them of a corporate con-
tribution. In the case of Diamond International, officers of that cor-
poration answered the questionnaire detailing the circumstances of
99 See section on Corporate Oriented Solicitation.
35t687 0 - 74 - 35
528
the corporate contribution well before any public disclosure was made.
As discussed elsewhere in this report, both Diamond International and
Carnation have pleaded guilty to violations of section 610 of title 18.
A questionnaire sent to the corporate officers of RCA disclosed a pos-
sible violation of section 610 in connection with the activities of the
Hertz Corp., a subsidiary of RCA. The results of the committee’s
investigation into this situation is also discussed in the section on cor-
porate contributions.
Of the 334 people responding in connection with the corporate
survey, 164 individuals from 112 different corporations made a con-
tribution of $100 or more to a Presidential candidate in 1972. The sur-
vey demonstrates the disclosure law had an effect on contributions :
fewer people contributed larger amounts of money prior to the April 7,
1972, deadline than those contributing post- April 7.
The answers to the questionnaire sent to corporate officers revealed
that a total of $1,896,322 was contributed to Presidential races by the
chief executive officer, the chief fiscal officer, and the Washington
representative of the queried corporations. The amount contributed
prior to April 7 was nearly twice that contributed post- April 7 —
$1,225,556 to $670, 766. 1 Of this total, over 75 percent was contributed
to the Nixon reelection effort — $1,443,830. This amount was almost
evenly divided between pre-April 7 and post-April 7— $786,889 prior
to April 7 and $656,941 after the April 7 date. It should be noted that,
of the $452,492 contributed to Democratic candidates, all but $58,225
represents the contribution of a husband and wife to the campaign of
former New York City Mayor John Y. Lindsay. Thus, aside from this
large dual contribution to the Lindsay campaign, the responding cor-
porate executives as a group contributed more than 25 times as much
to the President’s reelection effort as they did to all the Democratic
candidates combined. Contributions to the Nixon campaign were more
than 100 times the contributions to the McGovern campaign. A break-
down of the contributions by the 164 corporate executive contribu-
tors is as follows :
C. Contributions by Corporate Executives
Pre-Apr. 7 Post-Apr. 7 Number
who gave
Number Number (pre-and Total Numbe-
. of con- of con- post- amount of of cons
Contributions tributors Contributions tributors Apr. 7) contributions tributionr
Nixon
Lindsay
$786,889
394. 267
61
2
$656,941
119
o
29
$1, 443, 830
394, 267
18,500
11, 350
10, 425
8,750
5,500
3,450
250
McCloskey
Mills
McGovern
— ~ 18,500
5, 750
3, 450
2 ..
4
2
5,600
6,975
0
3
0
0
1
o
Muskie
750
7 .
o
Jackson
5, 500
4
o
Humphrey
2,200
1
1,250
3
Hartke.......
'250
1
o
Total
1,225,556
84
670, 766
129
30
1, 896, 322
As noted above, responses were received from 100 percent of the
unions contacted by the committee. As in the case of corporations, the
survey attempted to uncover any evidence of illegal contributions out
1 As noted above, questionnaires were not sent to corporate executives who were scheduled
for personal interview which included many of the largest contributors to the campaigns.
529
of union funds, as well as contributions from the unions’ political action
arms and from the union officers as individuals. No evidence of illegal
union contribution activity was disclosed. Significantly, of the nearly
200 individuals responding to the questionnaire, only two, both officials
of the Teamsters Union, contributed more than $500 of their personal
funds to a Presidential candidate. One gave $4,000 and the other gave
$2,000.
The results reflecting activity by the unions’ political action arms
revealed a strong bias m favor of the Democratic candidates. Senator
.McGovern received a total of $678,782 from 19 separate unions. Sen-
ator Humphrey received $176,556 from 15 unions. Senator Hartlie
received $14,250 from six unions, and Senator Muskie received $5,736
from two unions. President Nixon received $44,500 from six unions.
It should be noted that these contributions represent donations from
only national or the international union. It does not include contribu-
tions that may have been made through either the individual confer-
ences, district councils or the locals of a particular union.
There were two cases in which the political action arms of the
unions made significant loans to Presidential candidacies. The Com-
munications Workers loaned $100,000, and the United Auto Workers
loaned $150,000, both to the Presidential campaign of Senator McGov-
ern. In both cases, only part of the loan was repaid, and the large
balance was subsequently treated as a donation to the McGovern cam-
paign ; in the case of the Communications Workers, $10,000 was repaid
and $90,000 was donated, and in the case of the Auto Workers, $82,000
was repaid and $68,000 was donated. The results of the union question-
naire are as follows :
530
D. Union Contributions to Presidential Candidates
UlsjON MCGOVERN HUMPHREY MU3KIE HA.RTK5
AFL - CIO
Associated Actors & -
Artists of America
Allied Industrial Workers
Automobile, Aerospace &
Agricultural Implement
Workers (U.A.W.) $128,000 $500.
Bakery & Confectionary
Workers
Barber* s. Hairdressers,
Cosmetologist^ & proprietors
Boilers makers. Iron Shipbuilders,
Blacksmiths, Forgers & Helpers
California State Employees Assn.
Carpenters & Joiners
Chemical Workers Union
$1,350.
$500.
Civil Service Employees Asbd.
Clothing Markers of Amer.
$50,7^6
$1,000
$250.
Comm. Workers of Amer.
$123,369
$7,566
$500.
Distributive Workers of f ; •
America'"
$8lVr
International Union of
Electrical Radio & Mach.
Workers ■
United Electrical, Radio &
Machine Workers of America
International Brotherhood of
Electrical Workers $5,522
Natl. Federation of Federal
Eorployees
International Association of
Fire Fighters
NIXON
Glass Bottle Bio vers
531
UNION
' MCGOVERN HUMPHREY MUSKIE KARTKE NIXON
Amer. Federation of
Government Employees
Hotel 8s Restaurant Employees
& Bartenders
Bridge Structural & Ornamental
Iron Workers
North America laborer's
ladies Garment Workers $66,792
Natl. Assn of Letter Carriers
Graphics Arts Industrial Union $16,090
International Longshoremens Assn.
longshoremens & Warehousemens
Machine Printers & Engravers
Machinists & Aerospace Workers $24,600
Maintenance of Way Employees
National Maritime Union
Meat Cutters 8 b Butcher Workmen $54,200
United Mine Workers
Molders 8e Allied Workers
American Fed. of Musicians $1,500
American Nurse’s Assn.
Office 8 b Professional Employees
Oil, Chemical 8: Atomic Workers $32,975 $2,225
Operating Engineers
Plasters' 8: Cement Masons
Plumbing & Pipe Fitting Industry
Fraternal Order of Police
American Postal Workers Union
Printing Pressman St Assistants
$ 25 ,OOOj
i
i ■
$2,000 j
$3,500
532
UNION
MCGOVERN
HUMPHREY
MUSKTE
HARTKE
itdcon ;
United Papersvorkers
Inti. Union
$3,000
Brotherhood of Railway
Carmen
Painters &- Allied Trades
Railway, Airlines & Steamship
Clerks, Freight Handlers, Express
$1,000
• ;>|
& Station Engiloyees
$5,000
$2,500
$10,000
$5,000
Retail, Wholesale & Depart-
ment Stove Union
Service Enrployees Intn.
Sheet Metal Workers
$1,500
$1,000
State, County & Municipal
Employees
$18,056
$600.
$5,236
$250
American Fed. of Teachers
$30,536
$100. .
Teamsters
Alliance of Independent
Telephone Unions
$6,000
United Textile Workers of Amer.
Textile Workers Union of Amer. $100. $250.
Theatrical Stage Enrployees
& Moving Picture Machine v - /
Operators ;
Amalgamated Transit Union
Transport Workers Union $15,575 $1,000
United Transportation Union $4,800 $3,000
International Typographical _
Union
International Union of
Upholsterers
International Woodworkers of
America
533
Unlpn
MCGOVERN HUMPHREY MUSKjE HAKEE
Retail clerks International
Assoc.
$74,802
$11,926
Rubber, Cork, Linoleum &
Plastic Workers
$16,41)2
$8,140
United Steelworkers of
America
$41,699
American Association of
University Professors
$ 618,782 $176,556 $5,736 $14,250
KDCOB
$44,500
534
SENATE SELECT COMMITTEE ON
PRESIDENTIAL CAMPAIGN ACTIVITIES
QUESTIONNAIRE REGARDING
POLITICAL CONTRIBUTIONS
IN 1972 PRESIDENTIAL CAMPAIGN
Name, address and telephone number.
(A) Name of spouse.
Names and addresses of employers between January 1, 1971 and
December 31, 1972 and positions held.
Did you contribute to a political party, a candidate or a
committee for a candidate in the Presidential Campaign of 1972
during the period of January 1, 1971 to December 31, 1972? _____
For each contribution, please list (A) the name and address of
the recipient, (B) the amount you contributed, (C) the date,
and (D) the type of contribution, i.e., cash, check, stock, bonds
services, goods, or others. If not cash or check, describe con-
tribution in detail. If not cash, attach copy of relevant docu-
ments.
Did your spouse or any other member of your immediate family
contribute to the Presidential Campaign as defined in question 3?
____________ If so, who?
Each such person should complete a copy of this form.
Did your employer or any agent of your employer solicit contri-
butions, directly or indirectly, from you or other members of
the company on behalf of any particular candidate, political part
or political committee during the period January 1, 1971 to
December 31, 1972?
(A) If so, list names, positions and addresses of such
solicitors.
535
- 2 -
(B) State full details of solicitations.
(C) Did you contribute as a result of this employer solicitation
If so, state amounts and dates.
(D) Names of other employees solicited.
6. Did anyone else solicit you in person or by telephone for a
contribution? If so, please give name of solicitor
and describe events of the solicitation.
7. Did anyone make a contribution covered by Question 3 in your
name or anyone in your immediate family? If so, explaii
circumstances in detail.
8. (A) Did your employer have any arrangement to reimburse you,
directly or indirectly, such as through the use of bonuses
or raises, for political contributions made by you or your
immediate family during the period of January 1, 1971 to
December 31, 1972? If so, state full details.
(B) Was the possibility of such reimbursement discussed by
you or to your knowledge, others at the place of your
employment? If so, state full details.
536
10 .
li.
12 .
Date
- 3 -
Did your employer furnish to any candidate, committee for a
candidate or firm or person on behalf of any candidate or politic
party, whether directly or indirectly, any monies, goods, service
or any other thing of value for the Presidential Campaign of 1972
during the period January 1, 1971 to December 31, 1972?
If so, state full details.
Lid you, or your immediate family or your employer receive from
any candidate or from anyone on behalf of any candidate, politic
party, any political committee or committee for a candidate any
information or instruction regarding the gift tax laws or the
April 7, 1972 Campaign Disclosure Law? If so, state de-
tails and enclose copy of any documents provided, if available.
During the period January 1, 1971 through December 31, 1972,
were you, any member of your immediate family or any business
or enterprise of which you were an officer, director, partner
or had an interest in excess of 5% involved in any negotiations,
litigations or contacts with the United States Government or
any agency or department thereof? If so, state
details.
Do you have any other information or comments regarding fund-
raising or financing in connection with the 1972 Presidential
Campaign?
Signature
(Attach additional sheets if necessary.)
537
QUESTIONNAIRE FOR
CORPORATE OFFICERS
1. Name, address and telephone number.
2. bid you or any member of your immediate family contri-
bute the sum of $500 or more to any political candidate,
committee or party in connection with the 1972 Presidential
election?
If so, please complete the attached questionnaire for
contributors to the 1972 Presidential Campaign,
3. (a) Please list the names and addresses of all companies
with which you were affiliated as an officer or director
between January 1, 1971 and December 31, 1972: (Note:
Hereinafter, when the phrase "your companies" is used, it
shall refer to companies listed in your answer to question
3-a. )
(b) For each of your companies during the period January 1,
1971 through December 31, 1972 please list the chief executi
officer, the chief fiscal officer and the Vice President or
other official responsible for relations or liaison with the
United States Government and its agencies and departments.
538
- 2 -
Were you contacted in person, by telephone or in a personal
letter for contributions in connection with the 1972
Presidential Election?
If so, state details, including person soliciting and
summary of conversation or communication. If you have
any written communication or record, please attach a copy
to your response.
Eid you participate in or attend or, to your knowledge,
did any other officers or directors of any of your companies
participate in or attend discussions concerning the use of
corporate funds or resources in connection with the 1972
Presidential Campaign? ___
If so, state full details.
Did any of your companies make any contribution out of
corporate funds, directly or indirectly, to any political
candidate, committee for a candidate, political party or
firm or person on behalf of any political candidate, committ
or party in the 1972 Presidential Campaign?
If so, state full details.
I* id any of your companies provide any goods or services,
including the supplying of personnel or facilities, to any
candidate, committee, or political party in connection with
the 1972 Presidential Campaign?
If so, state full details.
Did any of your companies pay any bills or obligations on
behalf of any candidate, political committee or political
party in connection with the 1972 Presidential Campaign?
If so, state full details.
539
- 3 -
9. Did any of your companies excuse or forgive or settle at
less than face value any bills or indebtedness of any candi-
date, political committee or political party in connection
with the 1972 Presidential Campaign?
If so, state full details.
10. lid any representative of any candidate, political coramittei
or political party in connection with the 1972 Presidential
Campaign, directly or indirectly, suggest or indicate to yo
or, to your knowledge, any other officer or director of any
of your companies that for the receipt of a campaign con-
tribution that some benefit would accrue in any fashion to
you or to any of your companies?
If so, state full details.
11. kid any representative of any candidate, political committee
or political party in connection with the 1972 Presidential
Campaign, directly or indirectly, suggest or indicate to yoi
or, to your knowledge, any other officer or director of any
of your companies that any action would or might be taken
against you or any of your companies if you failed to make
a contribution to the 1972 Presidential Campaign?
If so, state full details.
12, Do you have any other information or comments regarding
fund-raising or financing in connection with the 1972
Presidential Campaign?
Date Signature
(Attach additional sheets if necessary.)
540
SENATE SELECT COMMITTEE ON
PRESIDENTIAL CAMPAIGN ACTIVITIES
QUESTIONNAIRE FOR UNION OFFICIALS
1. Name, address and office telephone number.
2, Did you or your spouse contribute a total of $500 or more
to any political candidate, committee or party in connection
yjith the 1972 Presidential Election? If so, please
complete the attached questionnaire for contributors to the
1972 Presidential Campaign.
3. A. Please list the names and addresses of all unions with
which you were affiliated as an officer or agent between
January 1, 1971, and December 31, 1972. (Note: Hereinafter,
when the phrase "your union" is used, it shall refer to all
unions listed in your answer to Question 3A.)
B. For your union during the period January 1, 1971, through
December 31, 1972, please list the chief executive officer,
the chief fiscal officer and the official responsible for re-
lations or liaison with the United States Government and its
agencies and departments.
4. A. Please list the political action am(s) or political
education committee(s) affiliated with your union, if one
existed in 1972; and list the chief executive officer and
chief fiscal officer of the same committee(s) .
541
- 2 -
B. Please state the customary procedure followed by the
political action arm(s) or political education committee (s)
when they are soliciting donations for political campaigns.
C. Please include a copy of any audit or statement or memos
of disbursement of these funds for Presidential Candidates
in the 1972 election.
5. Were you contacted in person, by telephone or in a personal
letter for contributions in connection with the 1972 Presi-
dential Election? _____
If so, state details, including person soliciting and summary
of conversation or communication. If you have any written
communication or record, please attach a copy to your re-
sponse.
6. Did any representative of any candidate, political committee
or political party in connection with the 1972 Presidential
Campaign contact your union to solicit contributions from
union funds, to solicit the union's assistance in obtaining
contributions from members, or to suggest that you make a
personal contribution which would be reimbursed by the union?
If so, state full details.
7. Did your union make any contribution out of union funds,
directly or indirectly, to any political candidate, committee
for a candidate, political party or firm or person on behalf
of any political candidate, committee or party in the 1972
Presidential Campaign? If so, state full details.
542
-3-
8, Did your union effect, or attempt to effect, a plan for
making deductions from members' dues which would or did
inure, directly or indirectly, to the benefit of any candi-
date, political committee or political party in connection
with the 1972 Presidential Campaign? If so, state
full details.
9, Were the members of your union directly or indirectly asked,
encouraged or instructed to make contributions which would
or did, directly or indirectly, inure to the benefit of
any candidate, political committee or political party in
connection with the 1972 Presidential Campaign? If
so, state full details.
10. Did your union provide any goods or services, including the
supplying of personnel or facilities, to any candidate,
committee, or political party in connection with the 1972
Presidential Campaign? If so, state full details.
11, Did your union pay any bills, salaries or obligations on
behalf of any candidate, political committee or political
party in connection with the 1972 Presidential Campaign?
If so, state full details.
543
-4-
12. Did any representative of any candidate, political committee,
or political party in connection with the 1972 Presidential
Campaign, directly or indirectly, suggest or indicate to you
or, to your knowledge, any other officer or employee of your
union that any action would or might be brought against you,
your union or the employers of any members of your union if
your union failed to make a contribution to the 1972 Presi-
dential Campaign? If so, state full details.
13. Did any representative of any candidate, political committee
or political party in connection with the 1972 Presidential
Campaign, directly or indirectly, suggest or indicate to
you or, to your knowledge, any other officer or director of
your union that for the receipt of a campaign contribution
that some benefit would accrue in any fashion to you or to
your union? If so, state full details.
14. Did you solicit funds from your membership on behalf of a
1972 Presidential Candidate? If so, state full details.
15. Do you have any other information or comments regarding fund-
raising in connection with the 1972 Presidential Campaign?
Note : Attach additional sheets if necessary in responding fully
to all questions.
35-687 0 - 74 - 36
544
VIII. CORPORATE ORIENTED SOLICITATION
The Finance Committee To Re-Elect the President engaged in
systematic solicitation of campaign contributions from corporate ex-
ecutives and middle management salaried employees. It engaged in
this solicitation through principally two programs. First, what was
varyingly called the “corporate conduit program,” or the “corporate
group solicitation program” (hereinafter referred to as CGSP”)
whose purpose was according to the persons in charge of it, FCRP,
Vice Chairmen Newell P. Weed, Jr., and Harold B. Scott, “to generate
substantial funds by encouraging individual corporations to stimulate
their employees to contribute * * *. The rationale behind the idea was
that individual companies could more effectively reach principal top-
management and middle-management personnel than was possible by
traditional fundraising programs.” la
CGSP was first conceived in March 1972, but it was not until June
that the structure of the program was set and it was put to operation.
The program ultimately reached executives from 1893 corporations
and included two major mailings to corporate executives.
The second major element was the industry-by-industry campaign
headed by Buckley M. Byers which concentrated on 60 major in-
dustries and involved some duplication of the Weed-Scott effort.
A third solicitation method approved, but not stressed by FCRP,
involved organized employee “good government” committees.
A. The Corporate Conduit Program
1. THE plan
There were two important features to this program. First, the CGSP
was aimed at companies and certain groups of people within com-
panies who would most likely contribute to the Republican candidate
for President, including top-management and middle-management
levels.
With this expectation in mind, it was decided to send a “bipartisan”
appeal to this select group for funds and expect a large return in
favor of the FCRP. Moreover, in some cases the program was imple-
mented in a firm on an outwardly bipartisan basis, with the “implicit
understanding that the Chief Executive would work toward a result
heavily weighted in favor of the President.” 2
Thus, the December Weed-Scott report, apparently directed to
Stans, stated :
Our target was to develop a large number of smaller gifts
rather than major gifts from a few donors. The law of num-
bers would make this program successful as it does the “in-
plant” solicitations now conducted by most corporations for
united Fund and other charitable organizations. A typical
corporate goal would be to solicit a group of 500 employees
and receive an 80 percent response with an average gift of
$100 which would provide a combined donation of $40,000. A
continuing base of only 500 firms nationwide with this average
la Report dated December 1972 by Weed and Scott, pp. 2, 17 — hereinafter Weed-Scott
Report.
3 Weed-Scott Report, p. 18.
545
result would produce a national total of $20 million and this
is a most practical goal if organized properly over the next
few years. 3
The second important aspect of the CSP was that it was so con-
structed as to circumvent the necessity of an individual company hav-
ing to file disclosure forms as a political committee under the Federal
Election Campaign Act of 1071 (FECA) by having the checks made
out directly to the candidate, but mailed to FCRP together. Following
this procedure, there would be no public record of contributions clas-
sified by the company of the donor while there would be such a record
at FCRP.
An informal opinion by the Department of Justice issued on Septem-
ber 15, 1972, although late in the campaign, gave credence to the FCRP
viewpoint that CSP was legal. The opinion made two significant
points regarding corporate involvement in political campaigns:
a. Bona fide bipartisan corporate solicitation programs,
even where the corporation is a defense contractor, are legal
under sections 610 and 611 of title 18, United States Code.
b. Under a “conduit system” whereby the employee is mak-
ing his contribution directly to a candidate or committee of
the candidate (even though utilizing a middleman) instead
of to a corporate fund or officer, a corporation’s participation
is not such as to require it to register as a political committee. 4
2. THE EXECUTION OF THE PLAN
Originally begun with the “Fortune 500,” this list was expanded to
1,000 and, ultimately 1,893 corporations, which included the “For-
tune 1,000” plus “top insurance companies, financial institutions, and
service companies.” These companies constituted the “blue ribbon” list.
Developed during the summer of 1972, 5 the program generated a total
of $2,791,134 according to Weed and Scott.
In an interview by committee staff, Harold Scott provided to the
committee a description of the operational mechanics of the Weed-
Scott program. The country was divided into two — then further di-
vided into regions — each region having a director. The regional direc-
tors were usually prestigious businessmen from the area. An organiza-
tional meeting was called in the region with the administration figure
as speaker. At the meeting attended by corporate business leaders from
the region, Scott or Weed would explain the corporate group solicita-
tion program, and, after the explanation, they would then distribute
a conduit system “kit,” describing the program. Personal contact was
relied upon heavily.
8 Weed-Scott Report, p. 2. This amount is approximately equal to the expenditure limita-
tion in S. 3044 of the campaign financing reform bill that passed the Senate in 1974.
4 The opinion was solicited by Richard D. Godown, general counsel of the National
Association of Manufacturers (NAM), in a letter dated September 13, 1972, to the Depart-
ment of Justice.
5 Even though the Weed-Scott program was not formally instituted until June 1972,
FCRP was keeping a record of individuals and corporations who received recognition for
their contributions. A memorandum from Weed to Hugh Sloan, Jr., dated March 31. 1972,
reads : “We will be receiving other gifts from other officers of Pullman, so we should keep
a record of them both individually and under corporate grouping.”
“This [$1,000 check] was delivered by Bill Speers, Washington representative of Standard
Oil, so while it should be acknowledged and listed as an individual gift, it should also be
listed under the Standard Oil group.”
546
It appears that problems developed because the internal conflict
over the “partisan” vs. “bipartisan” approach and the idea of “maxi-
mizing recognition,” since central to the approach was the emphasis on
associating the contribution with the corporation of the contributors,
and FCRP stressed the importance of contributors receiving recogni-
tion for their contributions. In a letter mailed to over 150,000 cor-
porate officers, Maurice Stans stated : “Our committee’s records of the
combined contributions from you and your associates will maximize
recognition of your group’s support of the President.”
One of the selling points of the conduit system was that corporate
executives could legally contribute in what in the aggregate constituted
a large contribution. 6 And the aggregate contribution from the com-
pany would not go unnoticed.
As noted in an untitled memorandum prepared in December 1972
by Weed and Scott, which appears to have been intended for Stans,
the question of the “concept” — partisan versus bipartisan — was
discussed :
Belated to the legal questions (discussed below), this issue
plagued the corporate conduit program from the beginning.
The program was conceived by a partisan group and its design
naturally included heavy overtones of partisanship. It soon
became apparent, however, that chief executives who might
themselves be solidly in the Republican ranks were often
hesitant to make a partisan approach to employees. Many
employers flatly refused to do anything which had
any overtones of pressuring the employees in an area
outside the firm’s principal activities.
In addition, the law (Federal Election Campaign Act of
1971) left some doubt as to the conditions under which a firm
could legally engage in partisan and/or bipartisan political
activities and also questions about the extent of activities
allowed. As a result the program was prompted on both par-
tisan and bipartisan basis. In instances where a partisan
approach was untenable, the bipartisan was trotted out. In
some cases the program was implemented in a firm on an out-
wardly bipartisan basis, with the implicit understanding that
the chief executive would work toward a result heavily
weighted in favor of the President. In other cases the roster of
employees approached was restricted to the management
group and other white collar workers, in hopes (well founded,
as it turned out) , that this group would be largely predisposed
in favor of the President.
Apparently typical of the objections raised by some businessmen
was a letter dated July 14, 1972, to Stans from the president of a New
Jersey company. After noting that he “strongly supported the policies
of President Nixon,” the writer continued :
I think this is a most unfortunate approach to the solicita-
tion of contributions.
I would strongly object to any pressures, no matter how
subtle, imposed upon me by our corporate officers, as I would
8 A number of letters sent out to executives suggested contributions of l%-2% of their
salaries.
547
expect the people in my division to object to any pressures
exerted by me.
In addition, your reference to the use of committee records
on organization contributions to maximize recognition of sup-
port appears to substantiate the Democratic charge of recog-
nition of special interest groups. This certainly highlights the
opportunities of the oil interests, as an example, to make a
substantial contribution in order to buy further administra-
tion support for unfair oil depletion allowances, which are
eventually paid for by the taxpayer.
Frankly, my feeling is that your approach is going to have
a negative, rather than a positive, effect on the overall support
of President Nixon and his forthcoming campaign.
FCRP aide Robert L. Krattli responded :
Former Secretary Stans has asked that I reply to your
letter which objects to the solicitation of contributions from
employees of companies.
The program being utilized by this committee is similar
to programs used within many of the major corporations in
this country, that is an employee-directed system of political
fundraising. We believe that the chief executive of a company
should have the option to conduct a fundraising campaign as
he sees fit, but we do provide him with the option of making
each gift totally anonymous and thereby affording complete
protection to the employees.
Despite this position, which stressed the availability of anonymous
contributions, the post-campaign Weed-Seott report advised the aboli-
tion of this procedure. In a section under “Solicitation Materials —
Problem Areas and Recommendations,” the report states :
A key problem was the reference to our first set of mate-
rials — on the “How To Do It” card — that suggested the
“double envelope” system used to return the contributions
if privacy was desired. It became apparent that employees
returning a contribution to their CEO or other senior officer
would respond far better in terms of dollar amount of the gift
if they did not use the anonymity of the sealed, double-
envelope svstem. Comparative results by those corporations
using the double envelope and those that did not make it ex-
tremely clear that the latter method should be used. Our
“How To Do It” card and our suggested procedures were
changed in the latter part of the campaign to eliminate any
reference to the double-envelope system. It is not a require-
ment of the law that this anonymity or privacy be maintained,
and as all gifts are a matter of public record anyhow with
the disclosure provisions of the new law it is strongly recom-
mended that in the future the “conduit” system include this
change in emphasis.
3. CGSP DIRECT MAIL PROGRAM
The success of the CGSP “blue ribbon” solicitation program may
be contrasted with a direct mail solicitation to businessmen. The direct
548
mail solicitation letter was drafted by Maurice Stans and mailed on
about July 4, 1972, to approximately 150,000 businessmen listed in
Dun & Bradstreet. The letter was followed up by calls and another
letter. According to FCRP, confirmed with the direct mail concern
that sent out the solicitations, only $14,000 was profited from the
direct mail program which cost $53,000. Approximately 200 com-
panies constituted conduit programs as a result of the direct mail
effort and about $25,000 was received from these 20 companies. So, at
most, this first mailing raised $39,000.
A second direct mail letter was sent in late August and early Sep-
tember to 35,000 firms listed in Dun & Bradstreet. This letter was a
higher quality piece than the first, and as a result, a larger percentage
of firms agreed to institute a conduit system than those in the first
mailing. The cost of this mailing was $21,000 with only about 600
actual respondents.
The direct mail results were not as expected. The response from
the “money-in-the-envelope” response was negligible — about 1 per-
cent, according to FCRP.
In fact, the conclusions of FCRP about the direct mail effort reveal
its limitations as a fundraising technique. The Weed-Scott report
concluded that “the direct mail portion of the corporate conduit pro-
gram’s effort was not effective by any standards.” (p. 24.) In fact,
FCRP concluded that, “No direct mail should be sent to major poten-
tial contributors including all officers of the 2,000 largest corpora-
tions”; while it was recognized that this would entail considerable
effort, it was concluded that “the cost is not excessive in terms of
potential benefit.” (Weed-Scott report, p. 16.) Thus, it was concluded
that it was worth considerable time, effort, and money not to send
mailings to these corporate officers.
B. Industry-by-Industry Program
The industry-by-industry solicitation program provided double cov-
erage of most of the corporations covered by the Weed-Scott program
and the individual FCRP State chairmen. However, this duplication
was acknowledged as a means to insure a good return from solicitation
under the total corporate solicitation program. 7
The logic of the program was summarized by Buckley M. Byers,
director of the industry-by-industry effort, in an October 23, i972,
memorandum to Stans :
In some 60 industries, we have had a leader in each indus-
try who personally knows his counterparts who are the chief
executive officers in that industry. He also knows what the
specific problems of the industry are, what President Nixon
has done to help his industry and also what the alternatives
would be for the industry. 8
In his memorandum to Stans on November 27, 1972, reviewing the
performance of the industry efforts, Byers would usually begin with
a statement on the effectiveness of the coordination of the industry.
Comments such as that a coordinator “did not perform to expecta-
7 Weed-Scott Report, p. 10.
8 Byers, in a staff interview, stated that only half of the 60 industries on which he
focused as intended participants actually participated.
549
tions,” or “was a disappointment after considerable optimistic talk,”
were balanced by evaluations that a coordinator “did a first-class
job.” Some who seemingly put forth their best efforts apparently
were simply the wrong person for the job. Byers felt that the coor-
dinator should be from an individual company and not from a re-
lated trade association. Although on occasion industry coordinators
instructed their respective industry counterparts to send their con-
tributions directly to FCRP, Byers wanted the individual coordinator
to receive the donations first so that an accounting of the total indus-
try’s contribution would be readily available.
This report described the homebuilders industry, which raised $334,-
059, as “productive and well organized.” Twenty days after the elec-
tion, Byers stated that: “This group, in my opinion, could still be
pressured into giving some more if absolutely necessary.” No further
contact was made, according to the industry chairman who told the
committee staff that there never was any pressure exerted on him or
the industry to contribute.
The organization of the agribusiness industries suggests the com-
prehensiveness of the industry-by-industry program. Within this
general industrial classification were dozens of different types of busi-
nesses and concerns, each with a subchairman. For instance, the agri-
business committee not only included soybean and beef production
but, also farm implement dealers, florists, cottonseed crushers, and —
according to the FCRP industry-by-industry files — 35 other subclas-
sifications. The November 27, 1972, Byers report attributes contribu-
tions of $209,457 to the agribusiness industry.
Although the industry-iby-industry program started relatively late
in the campaign, the program appears to have generated at least $7
million in contributions, according to Byers’ “preliminary final report”
which, he conceded, required updating. 0
The largest industry contributors, according to Byers’ November 27,
1972, report were: Pharmaceutical, $885,000; petroleum products,
$809,600; investment banking, $690,812; trucking, $674,504; textile,
$600,000 ; carpet, $375,000 ; automobile manufacturers, $353,900 ; home-
builders, $334,059 ; and insurance, $319,000.
It appears from memorandums obtained from FCRP files that some
corporate officers — especially those whose companies’ business heavily
rely on Government contracts — balked at the idea of the industry being
the contribution spotlight and not the company. Thus, a memorandum
from Buckley Byers dated July 17, 1972, re the aerospace industry,
states :
Vern told me in no uncertain terms that such an effort would
not be successful in this industry. The reason being that they
are so heavily dependent on Government contracts that in-
dividuals in any one of the top seven companies would not
want a representatives of any of the other companies to get
credit for raising this kind of money.
9 For example, no figure appears in the Byers’ report for the airlines industry ; and upon
a check by the committee of four national food chain stores, it was learned that officers of
just four companies contributed $6,400 to FCRP — while Byers’ report lists a total of $1,000.
Also, the staff of Rep. Les Aspin researched the Clerk of the House and GAO reports and
found that oil related corporation officers contributed approximately $5.7 million to Richard
Nixon’s campaign ( see Congressional Record, January 22, 23, 24, 1974). The Byers’ report
attributes an aggregate amount of $820,600 (Petroleum Products & Pipeline) from the oil
industry.
560
A July 26, 1972, Byers memorandum raised the same problem in the
case of the airline industry, pointing out that one industry figure noted
that “all of the airlines are exceptionally jealous of each other.”
Apparently, the industry -hy-industry program sought to acquaint
itself with the problems of the solicited industries. While the commit-
tee has developed no specific evidence that the FCRP industry-by-
industry program influenced Government action, it apparently re-
viewed industry problems and forwarded the industry’s concern to the
interested officials. Byers’ November 27, 1972, memorandum summa-
rizes his views :
We have a good nucleus of people to work with now and we
must keep most of them actively involved. In this connection,
I would recommend that many of our industry chairmen be
asked to serve as appointed members of the Republican Na-
tional Finance Committee. We are also going to have to do
what we can to help our industry chairmen with problems of
their industry and see to it that they get proper attention from
the administration. Only in this way will they become con-
vinced that our relationship is not “a one-way street.”
Another Byers memorandum regarding nonferrous metals noted
that “there would be absolutely no question” about FCRP’s choice
“accepting and doing an outstanding job ... if we could give some
reasonable assurance that we would render whatever assistance possible
to the industry.” There is no evidence that any efforts were made on
behalf of the industry by FCRP, though the industry was credited
with $55,600 by Byers.
Byers’ view of the potential of the program was summarized in his
October 23, 1972, memorandum to Stans :
While there was an industry-by-industrv effort in 1968, it
was admittedly, “too little and too late.” The effort this year
could also have been far more successful had it been in effect
much earlier. Now that we have a reasonably good organiza-
tional nucleus, I would urge that it be kept alive, strengthened
and enlarged. Such an effort could be invaluable in the sena-
torial and congressional races in 1974, as well as in any
special election that might come up in the meantime. If it is
continued, it could, in my opinion, prove to be “the answer”
in 1976.
C. Separate Segregated Funds: Corporate Good Government
Committees
The Federal Election Campaign Act of 1971 permitted a corporation
to provide for “the establishment, administration, and solicitation of
contributions to a separate segregated fund — commonly named ‘good
government committees’ — to be utilized for political purposes.” The
corporation need insure only that the money was not obtained through
force or threat of employment reprisals, or “in any commercial trans-
action.” The provision in the 1971 act for a separate fund basically
codifies the decision of the Supreme Court in Pipefitters Local 562 v.
United States. 407 TT.S. 385 (1972). There, the Court sanctioned the
common practice of separate funds for political purposes set up by
551
labor unions — and by analogy, corporations — governed by the older
Corrupt Practices Act, so long as the persons contributing to the fund
were fully aware that their contributions were voluntary.
It is in this area of voluntary funding that the 1971 Campaign Act
may be unclear and possibly subject to abuse. The act specifies that the
use or threat of physical force, job discrimination or financial reprisals
will render a contribution involuntary, and the Supreme Court has
said that under the previous legislation contributors had to be aware
that their donations were strictly voluntary.
One area of potential abuse is the situation where the employer —
perhaps through another high echelon corporate officer — asks his
employees to participate in a good government committee by making
donations. In this situation it is more difficult to differentiate between
coercion and implied pressure on the one hand and a legitimate appeal
asking for involvement in a citizenship program on the other.
Unions effectively utilized separate segregated political funds by
raising substantial amounts of money from their membership, most
of which went to Democratic candidates for President. However, cor-
porate related segregated political committees, though not as com-
monly known to the public as union, also provide a substantial per-
centage of contributions to campaigns. From reports filed with the
Clerk of the House and the GAO, it appears that hundreds of thou-
sands of dollars went to the Committee To Re-Elect the President prior
to the April 7 deadline in 1972. Post- April 7, according to GAO
records, five corporate-related committees reported that $138,556 went
to the Finance Committee To Re-Elect the President; from the same
committees, $20,650 went to Senator McGovern’s campaign and $650
went to one other Democratic candidate for President.
Many corporations already had in existence corporate good govern-
ment committees prior to the advent of the 1972 Presidential campaign
and readily utilized them for the campaign. Some of these corporations
ended their good government committees just prior to April 7, 1972,
because of the legal uncertainties arising from the questions of inter-
preting sections 610 and 611 of title 18, United States Code. And, still
other companies instituted new segregated political committees fol-
lowing the guidelines of the new law.
Concern existed not only over the legality of “good government”
committees, but over appearances. Although making use of these com-
mittees was part of the 1972 Presidential campaign effort by FCRP,
they were aware of possible criticism. Thus, a February 28, 1972
memorandum from White House consultant Jack A. Gleason to David
Wilson, assistant to John Dean, noted under the heading “Public
Relations” that : “Historically, virtually all corporate political struc-
tures have been subjected to illogical criticism by the press for their
activities. * * * Further, their activities have not been especially use-
ful or effective.”
Gleason’s plan to make the committees more “useful” and “effective”
appears in the memo’s next paragraph :
Whatever section 610 permits, any major corporation mak-
ing a major effort by itself will be subjected to additional
press criticism. The only way I can see to offset this pos-
sibility is to establish a committee of prominent business-
552
men to see that their corporations and others that they ap-
proach jointly announce that “these corporations (say, a
hypothetical minimum of 30 major corporations) have chosen
to exercise their ‘responsibility’ to good government by estab-
lishing a 610 committee as provided for under the new law.”
Such a leadership committee can be stacked with pro-Nixon
men, but should also include a creep [sic] or two like J. Irwin
Miller to avoid any blatant pro-Nixon appearance. Addi-
tionally, such a committee should be made up principally of
five or six real clout businessmen who can pass as reason-
ably non-partisan and must be prepared to devote a considera-
able amount of time to the project.
The committee investigated a number of corporate good Government
committees and found two companies which had programs that war-
rant presentation : Gould, Inc. and Tennessee Eastman Co.
1. GOULD, INC.
Gould, Inc., a large Government contractor which has a multiyear
contract to manufacture torpedo parts started Better Government As-
sociation (BGA) in 1969 as an outgrowth of the Gould, Inc.’s, phi-
losophy of taking an active part in politics.
The fund was divided into two types of employees: the salaried
exempt and the salaried nonexempt. The salaried exempt employees
were the 100 senior officers of the corporation. In 1972 and 1973, ap-
proximately 90 officers contributed to the fund. From the 5,000 salaried
nonexempt employees solicited in the same time period, approximately
350 contributed to the fund. Employees were theoretically able to
specify to the recipients of their individual contributions and make
suggestions as to who should receive contributions from the discre-
tionary fund, which was the money not allocated by individual con-
tributors. BGA was administered by three officials of Gould, Inc. :
William Ylvisaker, president and chairman of the board of Gould,
Elmore Wyatt, and Roger Moreley, two other company officials.
In February 1972, Ylvisaker was approached at a breakfast in
Chicago by Stans, a personal friend of his. Stans stated, according
to Ylvisaker, that, “we’ve got you down for $50,000.” After the break-
fast Ylvisaker met with Moreley and Wyatt to discuss a contribution
from BGA. All agreed that $50,000 was an unrealistic figure and
decided that $20,000 was more within the ballpark. Since BGA had
about $9,000 in the BGA account, it was decided that a personal loan
to BGA would have to be made. Ylvisaker decided to make the loan
personally on two conditions: (1) That BGA pay the interest on the
loan; and (2) that he would exert no immediate pressure to be repaid.
Thus, on April 3, 1972, Ylvisaker went to the National Security Bank
of Chicago and secured a note for $20,000 and made the loan to BGA.
Only the three above-mentioned officers of Gould, Inc., had knowl-
edge of the loan to BGA and also knowledge of the subsequent con-
tribution to CRP. No one else was told about the contribution until
shortly before the election in 1972. Not one of the salaried nonexempt
employees of Gould, Inc., knew about the contribution until the fact
was reported in the newspapers in the fall of 1972.
553
Over a year after the actual contribution was made to CRP, the
loan was repaid. The funds to repay Ylvisaker came to BGA as a
result of a massive solicitation effort within Gould, Inc., in the spring
and summer of 1973 in which Gould employees were solicited for non-
allocated contributions.
2. TENNESSEE EASTMAN CO.
The Tennessee Eastman Co., located in Kingsport, Tenn., main-
tained a plan: Volunteers for Better Government (VBG), which
involved centralized control under three trustees, two corporate offi-
cers and a local lawyer.
The payroll deduction authorization was for a deduction of 1 per-
cent of the employee’s gross salary ; there was no option on the amount,
of deduction. The average contribution was about $300 per employee.
The VBG organizers were empowered with the right to terminate the
payroll deduction at any time they felt that they had enough funds on
hand and then reinstate the deductions whenever they wanted more
funds without taking the matter up with the individual contributor.
There was no option on the part of the participant to designate the
candidate of his choice. No reports were made to contributors, and
employees were not advised of the identity of the recipients of VBG’s
contributions. No evidence of coercion was found, although one em-
ployee stated that he had participated because he wanted to be a team
player.
VBG stopped the payroll deductions as of November 1, 1972, and
has not reinstated them as of this date. The reason given was that the
committee had on hand funds amounting to approximately $28,000,
and there was no campaign or candidate to support. The report filed
with the Secretary of the Senate reveals that the receipts of VBG for
the year 1972 was $30,442.37. The only donation to a Presidential
campaign in 1972 was $30,000 which was given to FCRP. Cash on hand
as of December 1972 amounted to $28,161.89.
IX. COMPROMISE OF CAMPAIGN DEBTS
Investigation by the Select Committee has developed evidence that
at the same time as the Presidential campaign committees of Demo-
cratic candidate Senator George McGovern were settling bills with
creditors, including corporations, at 50 percent of their face value,
these Presidential committees were making substantial transfers of
funds to McGovern senatorial committees in anticipation of a 1974
contest for his reelection to his Senate seat.
The transfer of funds was first revealed by the McGovern Finance
Committee December 31, 1972 report furnished to GAO (Government
Accounting Office) . As disclosed in this report, $25,000 was transferred
from the “Citizens for McGovern” Presidential Campaign Commit-
tee to the “Citizens for McGovern” U.S. Senatorial Campaign Com-
mittee on November 20, 1972. By transfer of these funds and others,
Senator McGovern has been able to supplement the resources of his
Senatorial Citizens for McGovern Committee in the total amount of
$340,416.96. Following is a list of McGovern Presidential commit-
tees that transferred funds to “Citizens for McGovern— U.S. Senate.”
554
Citizens For McGovern (Presidential), 1019 19th Street, NW, Wash-
ington, D.C. :
Date : Amount
Nov. 20, 1972 $25,000
Jan. 9, 1973 25,000
Feb. 14, 1973 25, 000
Mar. 12, 1973 100, 000
May 17, 1973 50, 000
June 23, 1973 20, 000
Aug. 3, 1973 10, 000
Aug. 10, 1973 30, 000
Dec. 30, 1973 7, 054
Total 292, 054
McGovern For President, 721 Milwaukee, Box 3201, Milwaukee, Wise. :
Date : May 24, 1973 1, 000
Total 1, 000
Michigan McGovern for President Committee, 18647 Livemois Ave-
nue, Detroit, Mich. : Date : Aug. 20, 1973 21, 500
Total 21, 500
McGovern Committee, 6400G Goldsboro Road, No. 301, Bethesda,
Md.: Date: Sept. 29, 1973 25,400
Total 25,400
Alameda County Educators For McGovern, 2140 Shattuck Avenue,
c/o .Ernest McCoy, Esq., Berkeley, Calif. : Date : Dec. 19, 1973 462. 96
Total 462. 96
Grand total 340, 416. 96
During this period, over the signature of Marian Pearlman.
McGovern national treasurer, letters were sent to creditors to get them
to agree to settle debts owed to them for less than the full amount.
Thus, a letter dated December 15, 1972 by Ms. Pearlman to Mrs.
Martha Keys, 2339 Chris Drive, Manhattan, Kans., reads :
Henry is out of town and I have your letter of December 3.
First of all, the newspaper reports of the postelection financial
condition of the McGovern for President Committee were
inaccurate. We do not at this time have enough money to pay
all our debts. I am hopeful that we will be able to obtain settle-
ments from our creditors at less than the full amount owed.
All State committees are expected to settle their financial
affairs themselves. We are not assuming any State obligations.
*****
555
I would imagine that once you get all your accounts settled,
the Topeka printer would be willing to settle for some pay-
ment on the account as payment in full. We are writing to
our trade creditors asking them to settle for 50 percent of
the amount owed.
The committee investigation reveals that McGovern for President,
Inc. (a Presidential committee) has succeeded, by way of payment
at less than the full amount or no payment at all, in reducing obliga-
tions to business creditors — virtually all of them corporations 10 —
in the amount of $35,322.32. Initially, goods and services furnished
by IBM, for which payment was made at less than the full amount,
came to the attention of committee investigators, and IBM advised
the committee by letter dated February 14, 1974, that they had dealt
with approximately 45 political committees during the Presidential
campaign of 1972 and had billed for goods and services provided in
the amount of $952,000. Responding through their corporate counsel,
IBM furnished information concerning the current status of their
billing, which revealed that, as of February 14, 1974, they had current
billings of $3,142.64, a delinquent billing of $6,979.13, and bills written
off as uncollectible in the amount of $1,575.27. The $1,575.27 figure was
for goods and services provided to McGovern for President committees.
The committee investigation also reveals that $9,606.02 was written
off by Xerox as an “uncollectible” from the McGovern Presidential
campaign.
A document furnished to committee investigators by Marian Pearl-
man entitled “Schedule of forgiven debts in excess of $100” listed 46
companies, not including IBM and Xerox, that were offered the op-
portunity to accept settlement for 50 percent of the amount owed,
which was $36,061.37. A check with these companies disclosed that 11
had eventually been paid in full.
Following is a list of 37 companies which held indebtedness in
excess of $100 for the McGovern Presidential campaign of 1972, for a
total of $35,322.32, which, according to committee investigation, was
not paid :
^Section 610 of title 18, United States Code, prohibits contributions by corporations (see
section on Corporate Contributions), and certain corporations settled obligations at less
than face value. However, there is no evidence that: (1) Officials in Senator McGovern’s
campaign directed their settlement efforts at corporations as opposed to other creditors ;
(Z) sucn a settlement was contemplated b.y the campaign officials during the time the goods
and services were contracted for ; and (3) the corporations had any intention to make a
^ n FiS: lltion ih fact, had knowledge of actual or anticipated assets of the campaign or
that the creditors and campaign dealt with each other than at arm’s length. It does
not appear that section 610 has ever been applied to the situation described herein.
556
Schedule of forgiven debts in excess of $100
Creditor : forgiven
IBM Armonk, N.Y $1, 575. 27
Xerox Corp., Rochester, N.Y 9, 606. 02
Sumart Press & Envelope Co., Post Office Box 85, Beltsville, Md.__ 135. 60
Transion Air Freight, O’Hare International Airport, 5201 North
Rose St., Chicago, 111 423.61
Wire Service Supply Co., 220 East 42d St., New York, N.Y 117. 04
Electronic Center, 5258 Reisterstown Rd., Baltimore, Md 125. 00
Winnipesaukee Aviation, Inc., Post Office Box 165, Lakeport, N.Y 399. 50
Yankee Trails, Third Avenue Extension, Rensselaer, N.Y 284. 00
Airport Motor Inn, Post Office Box 12422, Houston, Tex 310. 60
Audio Visual Innovations, Inc., 152 West 42d St., New York, N.Y — 326. 83
Avis Grand Rent-A-Car, 1207 West Third St., Los Angeles, Calif— 123. 53
Radisson South, 7800 Normandale Blvd., Minneapolis, Minn 191. 94
Bush Hill Transportation Co., 109 Norfolk St., Dorchester, Maine- 192. 70
Budget Rent-A-Car, 7195 South Bay Rd., North Syracuse, N.Y — 150. 00-
Chateau Inn, Box 506, Chidress, Tex 141. 85
Cherry Hill Inn, Cherry Hill, N.J 218.06
H. F. Rental, Learing Inc., Route 230, Highspire, Pa 519. 74
St. Anthony Hotel, Post Office Box 2411, Houston, Tex 1, 068. 71
Sheraton Ohio Motels, 210 North Main Street, Dayton, Ohio 1, 013. 10
Pawtuxent Valley Bus Lines, 76 Industrial Lane, West Warwich,
R.I 173. 25
Color Film Corp., Post Office Box 5003, Stamford, Conn 268. 60
Eastshore Lines Charter Service, 55 Townsend Court, San Fran-
cisco, Calif 297. 00
Haines and Co., 8050 Freedom Avenue, N.W., North Canton,
Ohio 684. 26
Hayes Motor Hotel, Jackson, Miss 161. 30
Holiday Inn of Houston-NASA, 1300 Nasa Boulevard, Houston,
Tex. 453. 05
Hollenden Tavern, Inc., East Sixth and Superior Avenue, Cleve-
land, Ohio 128. 71
Imperial Air Freight Service, Inc., 151 Oliver Street, Newark,
N.J. 411.27
Yellow Cab Co., Inc., 816 Eye Street, NW., Washington, D.C 120. 00
Welch Catering Co., 1226 Folsom Street, San Francisco, Calif 165. 90
Airportransit, 10053 International Road, Los Angeles, Calif 142. 50
Quadrangle Books, Inc., 330 Madison Avenue, New York, N.Y 307. 17
Ramada Inn, 2151 South Hotel Circle, San Diego, Calif 102. 66
Sherman House, Randolph Clark, LaSalle Street, Chicago 111 2, 327. 88
Robolith, 45-35 Van Dam Street, Long Island City, N.Y 4, 173. 32
Union Dining Service, Room 110, Union Building, Box 7036, Uni-
versity Station, Austin, Tex 207. 16
Uptowner Inn, Inc., 1415 Fourth Avenue, Huntington, W.Va 288. 75
Total 35,322.32
In a letter to Senator Ervin, Senator McGovern commented on the
practice of his Presidential campaign settling certain obligations at
less than their face amount :
First, when these debts were settled, there was every reason
to believe that the McGovern campaign would not have
enough money to cover all remaining obligations in full.
At the beginning of January, 1973, when the letter sug-
gesting a settlement to creditors was sent out, the McGovern
for President Committee had debts totaling some $800,000
and cash on hand of about $460,000. It was in part through
settlements, both of personal loans to the campaign and of
these few bills owing to corporations, that the deficit was
worked down. By the end of February we werfe down to
557
roughly $100,000 in the red. Over time, with the payment of
such bills owed to the campaign as press payments for air
transportation, we ended up with a net surplus in terms of
bills currently due. However, we were still obliged to hold re-
serves against such potential obligations as a workmen’s
compensation suit in Oregon and a large tax claim. As re-
cently as March 7, 1974, the treasurer of my campaign, Henry
Kimmelman, advised me that our possible liabilities still ex-
ceeded our assets, even including in those assets earnings
since the campaign from interest and rental of the mailing
list.
It may be argued that the feature distinguishing my cam-
paign from other campaigns which have settled debts to
corporations at less than their fall value is the fact that pend-
ing disposition of remaining claims, there is at the moment
a net balance remaining from my 1972 effort. But the fact is
that at the time these settlements were made we were con-
fronted with a sizable deficit, which was eliminated only be-
cause a number of creditors were willing to extinguish our
obligations in exchange for less than the total due.
It is, of course, possible to look back from some 15 months
later and conclude that we could have paid more of the obliga-
tions than were settled, and perhaps even to make a value
judgment that in doing that we should have given a priority
to corporate debts as opposed to individual loans and staff
salaries and expenses which were in arrears because of a
post facto conclusion that corporate settlements, although
wholly at arms length, are nonetheless akin to corporate con-
tributions. But I suggest that charging us to foresee in Jan-
uary of 1971 how the books would ultimately balance out sets
a requirement for superhuman foresight. Indeed, we cannot
even foresee that for certain now. With liabilities greatly in
excess of our firm assets, the only prudent thing to do at
the time was to contact all creditors and suggest a settlement
of the debts. That is precisely what we did. And as individual
creditors responded, we made the agreed partial payments to
extinguish the individual debt.
With respect to the campaign’s transferring certain funds to Sena
tor McGovern’s reelection campaign, he had the following comment
Funds were transferred from the Citizens for McGovern
Committee, a Presidential campaign committee, to my Senate
campaign committee during the time when these debts were
being settled. There is, of course, no prohibition against such
transfers, even if it had been money raised at the national
level.
But in fact, these funds were not available for use in paying
off debts incurred by the national McGovern campaign.
Part of the funds transferred during the period when debts
were being settled came: from State and local McGovern com-
mittees, which had money remaining after the campaign.
Those were funds raised on their own by autonomous commit-
tees working on behalf of my campaign. And the money was
558
sent in to Washington after the election with the explicit
understanding that it would be used in my 1974 campaign for
re-election to the Senate. These groups had authority to
dispose of their remaining funds in any way they saw fit, and
they chose to support my South Dakota campaign. Appli-
cation of their money to debts incurred by the national Mc-
Govern campaign — debts which were not the responsibility
of those State and local groups — would have violated the
choice they had every right to make in regard to the dis-
posal of whatever balances they had on hand when the cam-
paign was over. 11
Like our national campaign committees, these various com-
mittees around the country were also reporting to the General
Accounting Office. After consulting with legal counsel and
with the Democratic Senatorial Campaign Committee, we
temporarily deposited these funds in the account of the Citi-
zens for McGovern Presidential Committee, to assure that
the GAO records would show both ends of the transaction.
This also had the advantage of simplifying our own book-
keeping operations.
In addition, after the Presidential campaign was over, we
received a number of individual contributions from around
the country for my Senate campaign. Those funds, too, were
deposited temporarily in the Citizens for McGovern account.
X. CASH CONTRIBUTIONS BY CONTRACTORS
Because of the withdrawal by Presidential candidate John V. Lind-
say, then mayor of New York City, prior to April 7, 1972, the Lind-
say campaign committee did not file a Federal report concerning their
campaign finances. However, the receipt of cash contributions and
the use of a safe deposit box after April 7, 1972, became the subject
of a committee inquiry. Two $5,000 contributions in cash by officers
of companies doing business with New York City are the focus of this
discussion.
In early 1972, David W. Keiper, then deputy commissioner for the
department of highways in the city of New York, solicited campaign
contributions to assist the Lindsay campaign. Keiper stated that
though not asked by anyone to solicit campaign contributions for can-
didate Lindsay, his actions were prompted by reading a newspaper
article which related that Lindsay had sustained a $100,000 debt with
the conclusion of the Florida primary. Prompted by this concern,
Keiper contacted Peter Jordan, a subordinate who was general super-
visor of the New York City Highway Department, Queens Plant,
located in Flushing, N.Y. Keiper stated that he advised Jordan of
the need for funds on the part of the Lindsay campaign and asked
Jordan whether he might be able to be of some help. Keiper stated
that he believed that he and Jordan, in their conversation, mutually
arrived at a plan to seek campaign contributions, but denied that there
was any specific mention of soliciting contractors or suppliers of goods
to the city of New York. This conversation took place at Keiper’s office.
11 There Is no claim by the McGovern Presidential campaign that the individuals who
actually contributed to the State and local Presidential committees were consulted about
the use of their contributions in the senatorial campaign.
559
Keiper stated that approximately a week after his initial conversa-
tion with Jordan, he met Jordan for lunch at a restaurant, and at that
meeting Jordan furnished to him an envelope containing $10,000
in $20 bills. Keiper stated that Jordan did not tell him from whom the
contributions were obtained but indicated to him that the names of
the contributors were included with the cash in the envelope. Keiper
advised the committee staff that he did not count the money to assure
himself that, in fact, $10,000 was there, but only delivered the en-
velope to the Lindsay Lexington Avenue headquarters where he per-
sonally handed it to Richard Aurelio, a former deputy mayor of New
York City, and at that time Lindsay’s campaign manager. Keiper
stated that Aurelio accepted the contribution, glanced at the contents
of the envelope and then delivered the envelope to a third person
and told him to count it and list it according to the names of the con-
tributors. Keiper stated that he had no conversation with candidate
Lindsay with regard to this cash contribution and denied that he
knew that the $10,000 contribution was obtained from two contrac-
tors who did business with the city of New York until a later time
when lie was questioned by a New York City investigator. On this
occasion he learned that $5,000 was contributed by Frank Licourti,
owner of the Mascali Construction Corp., and $5,000 by Frank Casta-
gleoni, a partner of the Jet Asphalt Corp. with Lou and Fred Durante.
On November 6, 1973, in a staff interview, Jordan confirmed that he
had had a conversation with his former supervisor, Keiper, relating
to the financial needs of the Lindsay campaign. (Keiper had formerly
exercized supervision over the Queens Highway Department Plant
which provided about one-third of the New York City asphalt pro-
duction.) Jordan generally affirmed the information furnished by Kei-
per and related that in response to Keiper’s request for contributions to
assist the Lindsay campaign, he did, in fact, contact Castagleoni and
Lou Durante, whose corporation is a substantial supplier of asphalt to
the Queens Plant. Jordan mentioned to Castagleoni and Durante his
desire to obtain funds for the financially overextended Lindsay cam-
paign and, though not being able to recall specifically, he stated that
he may have mentioned an amount of money that he was seeking.
On the same day, Jordan talked to Licourti, of the Mascali Corp.,
which is located near the Jet Asphalt Corp. in Flushing, N.Y. About
a week later, while on one of his daily visits to the Jet Asphalt Corp.
and the Mascali Corp., he inquired of the owners what they were going
to do concerning the contributions he had requested. Jordan stated
that he received a $5,000 contribution from Licourti and a $5,000 joint-
contribution from the coowners of the Jet Asphalt Corp. Jordan
stated that, though the money was furnished to him in cash, he did
not make a request for cash: and he had no recollection that in his
discussions with Keiper that cash contributions were mentioned.
Subsequent to obtaining the contributions from the officers of these
two corporations, Jordan met Keiper at the Amber Lantern Restau-
rant in Flushing, N.Y., and handed Keiper an envelope which con-
tained the $10,000 in cash. Jordan stated Keiper told him at that time —
and later confirmed it — that lie would take the money directly to
Lindsay headquarters and give it to Aurelio.
560
On November 5, 1973, in staff interview, Castagleoni advised the
committee that he had, in fact, furnished a $5,000 contribution, one-
third of which was given by each partner of the Jet Asphalt Corp. He
related that the solicitation and contribution were consummated in
late May or early J une of 1972, and he confirmed that the solicitation
was from Jordan, whom Castagleoni knew to be active in politics.
Castagleoni stated that he understood that the money he was furnishing
Jordan was for the Lindsay campaign. However, he denied that the
contribution was in any way related to the awarding of contracts to
his company by the city of New York.
The committee uncovered evidence that the Jet Asphalt Corp. and
the Mascali Corp. did, as a joint venture, make a bid and was awarded
a contract in about July 1972 in the gross amount of $1,700,000, to
provide asphalt to the city of New York for the period from July 1,
1972 to July 25, 1973. Castagleoni denied that he saw anything wrong
with the contribution he had furnished to Jordan with the qualifica-
tion added — “so long as the funds were personal and not corporate.”
Richard Aurelio, interviewed by the committee staff on October 17,
1973, stated that he was the senior official of the Lindsay campaign and
functioned as campaign manager from December 1971 until early
April 1972, when Lindsay withdrew from the race. Prior to Decem-
ber 1971, Aurelio had been deputy mayor of New York City and served
in that capacity for 2 years. In response to inquiry concerning
Aurelio’s recollection of any cash contributions in excess of $1,000
received by the Lindsay campaign. Aurelio stated that he could recall
only one situation which involved the receipt of two contributions in
cash of $5,000 each. He explained that a short time after the Lindsay
withdrawal, a New York City official delivered either one or two
envelopes containing the two $5,000 contributions. He acknowledged
that the money was contributed by two Queens contractors, but denied
knowing either the names of the contractors or the city official who
delivered these contributions. Aurelio acknowledged some awareness
of a contribution to the Lindsay campaign from Mrs. John Loeb and a
second contribution through Mrs. Loeb from Dwayne Andreas. How-
ever, he disavowed any knowledge that cash was furnished in these
transactions.
Aurelio stated that he was aware that the Lindsay campaign had a
bank safe-deposit box available for its use. However, he denied any
knowledge of the location of the safe-deposit box. He stated that
Fergus Reid III was the senior financial official with the Lindsay
campaign and the individual who would have custody and control,
as well as knowledge of those items maintained in the safe-deposit
box. Aurelio, when pressed for further details, advised that it was
his belief that the cash contributed by the two Queens contractors had
been placed in a safety deposit box and that he had later learned of
a disbursement from these funds for the payment of a polling bill.
On September 21, 1973, Fergus Reid III advised the committee
staff that he served as the treasurer for Lindsay’s 1972 Presidential
campaign from December 1, 1971, until Lindsay withdrew after the
Wisconsin primary. Reid described his responsibilities as receiving,
maintaining, disbursing, and accounting for Lindsay’s funds. He
stated that he did not have any responsibility for fundraising — that
is, the actual solicitation — but he was on several occasions the recipient
561
of contributions to the campaign. Reid identified Steve McDonald
as the finance director for the Lindsay campaign, who had responsi-
bility for fundraising efforts.
Reid furnished to the committee the names of the Lindsay campaign
committees in whose names checking accounts were maintained at the
Chemical Bank of New York City. He identified these committees:
“The Elect John Lindsay Committee,” the “Lindsay in 1972 Commit-
tee,” and the “Aurelio Testimonial Committee.” In addition, Reid
confirmed that the Lindsay campaign did have a safe-deposit box
which, though at the time of this interview Reid believed to be at
the Chemical Bank, he later provided information that the safe-
deposit box was located in the First National City Bank at 111 Wall
Street, New York City. In response to questions concerning cash
contributions to the Lindsay campaign, Reid advised the committee
staff that he could personally recall three persons who contributed
sums in cash. One was John Loeb, and the other two were building
contractors in Queens, the last two having contributed $5,000 each.
Reid denied any knowledge of the circumstances surrounding the
contributions furnished by the Queens contractors and specifically
stated that he had no knowledge with regard to the reasons for which
the contractors made these contributions in cash. In a subsequent in-
terview on October 2, 1973, Reid advised the committee staff that
he had determined that the safe-deposit box served to provide a ready
source of cash disbursement to advance men and petty cash reimburse-
ments to campaign workers. Though conceding that he had access to
the safe-deposit box along with Steve McDonald, the Lindsay finance
director, Reid denied that he had ever used the box and stated that, to
the best of his recollection, the most cash ever in the box was approxi-
mately $15,000.
Steve McDonald, finance director for Lindsay’s principal cam-
paign committee, “Lindsay in 72”, began his duties in December 1971
and concluded his full-time paid employment on April 10, 1972.
McDonald told the committee staff, on September 24, 1973, that he
did not know of any solicitation activity to obtain political contribu-
tions in cash and further stated that he had no knowledge that others
connected with the Lindsay campaign solicited cash. He stated that he
had knowledge of some cash contributions in excess of $1,000 and
noted that he personally received a $10,000 cash contribution from
Mrs. John Loeb, which he obtained from a secretary in John Loeb’s
office. He stated that he had no recollection of discussing this par-
ticular contribution with Lindsay and could offer no explanation as
to why this contribution was in the form of cash. McDonald stated
that he delivered this cash contribution to Reid’s office where, to the
best of his recollection, he gave the money to Mrs. Elaine Wallenstein.
McDonald stated that, he believes the $10,000 cash contribution was
put in a safe-deposit box, but he claims no knowledge as to the use
made of these funds. McDonald related that at a subsequent time,
possibly 'before the Florida primary, Mi's. Loeb gave to him an addi-
tional $5,000 cash contribution which she told him was from Dwayne
O. Andreas. Again McDonald transmitted this cash contribution to
Reid’s office. McDonald recalled that there was another cash con-
tribution received by the Lindsay committee and that contribution
was from a New York architect. McDonald denied knowledge of any
562
cash contributions coming from contractors doing business with the
city of New York and further stated that he had no knowledge of
the use of cash to pay for any goods and services in excess of $500.
Mrs. Elaine Wallenstein was interviewed by the committee staff
on October 26, 1973. She advised that she handled the bookkeeping
duties which included the recording and the deposit of contributions
received .by the Lindsay campaign. She noted that the Lindsay cam-
paign treasurer's office was located at 110 Wall Street. Mrs. Wallen-
stein advised the committee that, at the direction of her supervisor,
Reid, she had leased a safe-deposit box from the First National City
Bank of New York City in late December of 1971 or early January of
1972. She noted that the signatories for the box were, in addition to
herself, Reid and McDonald and that, for the sake of convenience,
the box had been leased in her name rather than in the name of the
Lindsay campaign. At the time the bank deposit box was opened, Mrs.
Wallenstein stated that she recalled a conversation with Reid during
which she believed he told her that Aurelio had requested that a safe-
deposit box be opened. She stated that in January of 1972, at about
the same time the bank safe-deposit box was opened, she received a
sealed envelope from the Lindsay Madison Avenue headquarters and
was instructed to put the envelope in the safe deposit box, which she
did. She stated that she cannot recall any marking on the envelope,
nor can she explain her belief that the envelope contained an unknown
amount of cash. She recalled that approximately a week later she was
instructed to take the envelope out of the box and have, it delivered
to the Madison Avenue headquarters. She kept no record of the receipt
or return of the envelope to the Lindsay headquarters and stated
that she has no knowledge of what was done with the package after
delivery. Mrs. Wallenstein stated that in July 1972 she received a
phone call from Reid asking that she pick up a package for him at
Aurelio’s home. She stated that she followed these instructions and
obtained from Aurelio an envelope which she later opened. She stated
that the envelope contained $20,090 in cash, but she has no recollection
as to the denomination of the bills. She placed this money in the safe-
deposit. box and informed Reid of her actions on this matter. He then
instructed her to bring all or part of the cash (she cannot remember)
in the envelope to the finance office. Upon receiving these instructions,
she took the envelope out, of the box and delivered it to Ms. Emily
Aurelio. She recalled that Reid had told her that some bills would be
paid with these moneys.
Mrs. Wallenstein advised the staff that the only other occasion she
could recall using the bank box was in late April 1972 and at that time
McDonald had delivered to her an unsealed envelope which contained
cash. She stated that she did not count the money and, on the following
day, upon receiving instructions from Reid, she removed the envelope
and delivered it to the Lindsay headquarters. Though she stated she
did not know to whom she was delivering these various amounts of
cash, it was her belief that these moneys were going to Aurelio. In
addition. Mrs. Wallenstein stated that no records of receipt or deposit
to the safe-deposit box relating to the contents were ever made.
Mrs. Wallenstein advised that she had no knowledge that cash con-
tributions had been received from John Loeb, Dwayne Andreas, Frank
Castagleoni, or anyone else. She related that any such cash contribu-
563
tions could represent the deposits she made to the safe-deposit box;
but she said that, this was speculation on her part.
Ms. Emily Aurelia advised the committee that she worked in the
capacity of clerk/typist from January 1972 to October 1972 for the
Lindsay campaign. She stated that she could only remember three
instances wherein she handled cash contributions in excess of $1,000
and recalled that on one occasion in January 1972 she picked up
$2,400 at the Madison Avenue headquarters and deposited this money
in the campaign account “Aurelio Testimonial Account.” This account
was located in the Chemical Bank of New York. She noted that, so far
as she knew, this cash represented the sale of dinner tickets. Ms.
Aurelia recalled that in July or August of 1972, at the request of Mrs.
Wallenstein, she typed two receipts in the total amount of $7,800 to two
business concerns. In the second case, when she counted the cash in the
presence of Mrs. Wallenstein, they found that they were $100 short, so
she accompanied Mrs. Wallenstein across the street to the First Na-
tional City Bank where she withdrew additional funds from the safe-
deposit box. Ms. Aurelia stated that this was her first knowledge of
the existence of a safe-deposit box, and the only time she had occasion
to go to the box.
XI. CAMPAIGN FINANCING EECOMMENDATIONS
Introduction
In making its legislative recommendations the Select Committee
has made a number of proposals that it believes will reduce the likeli-
hood of future abuses. In so doing, it wishes to emphasize two points.
First, full disclosure of contributions and expenditures as well as of
governmental action affecting contributors is the critical minimum of
campaign financing reform. But- for even this minimum to be an effec-
tive tool, the data must, be accessible and reviewed by those with an
interest in the Government process, including candidates and the press.
Second, the temptation to overregulate must be viewed in terms that
such action would have on the willingness of citizens to participate
voluntarily in the electoral process. For example, the committee con-
sidered a proposal to require the registration of campaign fund solici-
tors since, arguably, it made little sense to identify the passive treas-
urer of a political committee but not the active fundraiser. It was felt,
however, that whatever benefits woul d flow from requiring fund-
raisers such as Herbert W. Kalmbach to register under some penalty
for failure to comply would be offset by the chilling effect such a re-
quirement might have on speakers at local political meetings or on
door-to-door canvassers. Since many fundraisers do not actually
handle the contribution they may have solicited, it was concluded that
it was not feasible to use a cutoff amount below which registration
would not be required. This is not to say, however, that the idea has
no merit-. 12
A further word should be said about the timing of the enactment
of the effective date of any corrective legislation. One of the most
18 The independent Federal Flections Commission recommended this report could, of
course, investigate particular alleged abuses.
564
bizarre aspects of the 1972 Presidential campaign was at the time
frantic effort on the part of the Finance Committee To Re-Elect the
President to obtain large contributions prior to April 7, 1972, so that
they would not have to be reported under the then prevalent inter-
pretation of the Corrupt Practices Act. In the weeks prior to the
April 7 deadline, according to Kalmbach and others, FCRP solicitors
were seeking large contributions from individuals with the induce-
ment that the contributions would remain confidential while later
contributions would have to be publicly revealed.
Sloan testified that the committee collected “an avalanche” of con-
tributions during the last 5 days before April 7 and that he handled
$6 million in contributions in the 2 days before April 7. In addition,
in an effort to reduce the reported cash on hand as of April 7, 1972,
as required by the Federal Elections Campaign Act of 1971, the
FCRP prepaid for services that would not be provided until after
April 7. According to Paul Barrick, Sloan’s successor as treasurer of
FCRP, the total of $3,787,480 was prepaid in this fashion. A simi lar
influx of pre- April 7 contributions was found in certain Democratic
campaigns.
With the arrival of April 7, there was a substantial reorganization
of FCRP, including the setting up of new committees and adapting
the structures to the new law. It appears, however, that in a number
of cases, there was a spillover to post- April 7.
Any significant change in the law with respect to campaign financ-
ing late in the campaign creates the potential for abuses such as oc-
curred in the 1972 Presidential election.
Thus it is important that any relevant changes in the law with
respect to contributions or expenditures which are enacted should be
done so early in the campaign and made effective upon the signing of
the bill into law by the President in order to avoid a last minute rush
for contributions.
1. The committee recommends that the Congress enact legisla-
tion to establish an independent, nonpartisan Federal Elections
Commission which would replace the present tripartite adminis-
tration of the Clerk of the House, Secretary of the Senate, and
GAO Office of Federal Elections and would have certain enforce-
ment powers.
Probably the most significant reform that could emerge from the
Watergate scandal is the creation of an independent nonpartisan agen-
cy to supervise the enforcement of the laws relating to the conduct
of elections. Such a body — given substantial investigatory and en-
forcement powers — could not only help insure that misconduct would
be prevented in the future, but that investigations of alleged wrong-
doing would be vigorous and conducted with the confidence of the
public.
The present system of administration of the Federal election and
disclosure laws consists of a tripartite system of administration by the
Clerk of the House, the Secretary of the Senate, and the GAO Office
of Federal Elections. These three bodies are responsible for receiving
and monitoring the reports filed by candidates for Federal Office and
their political committees. Criminal violations discovered by these
three bodies must be reported to the Justice Department for prosecu-
tion. Because the three administrative bodies are not vested with
565
subpena or investigative powers, the difficulty of discovering and in-
vestigating apparent violations is magnified under the present system.
In addition there is no central repository of information relating to all
Federal candidates. 13 Each of the three bodies has developed its own
rules as to monitoring the reports and making them available to the
public. Separate administration makes equal treatment difficult to
achieve.
In addition to the administrative problems of the present system,
the independence of the administrators can be questioned. As noted
in a recent speech by the head of GAO, Comptroller General Elmer
Staats, confidence in impartiality is weakened in a situation where the
administrator comes up for appointment every 2 years by the employ-
ers he is required to police.
With the exceptions noted below, the committee adopts sections 308
and 309 of S. 3044 which would create a Federal Elections Commission
and vest in it certain enumerated powers.
Under the Senate bill, the Commission would be composed of seven
members appointed by the President with the advice and consent of
the Senafe who would serve 7-year terms. Not more than four of the
commissioners would be members of the same political party. Of the
seven, two members would be appointed by the President from among
individuals recommended by the President pro tempore of the Senate
upon recommendations of the majority leader of the Senate and the
minority leader of the Senate and two members would be appointed by
the President from among individuals recommended by the Speaker
of the House of Representatives upon the recommendations of the
majority leader of the House and the minority leader of the House.
With respect to the first members chosen to serve on the Commission,
the committee recommends that terms be staggered in the manner
provided for in section 308 (a) (3) of S. 3044.
The Commission would elect a chairman and vice chairman from
among its members for a 2-year term. The Select Committee consid-
ered and rejected the proposal (contained in H.R. 7612) that the Presi-
dent appoint the chairman and vice chairman of the Commission. The
chairman and the vice chairman would not be members of the same
political party. The Select Committee’s recommendations as to the
appointment of the Commission members are designed to promote and
insure the independence and nonpartisan character of the Commission.
The provisions of section 7324 of title 5, United States Code (Hatch
Act) would apply to members of the Commission.
At the end of each fiscal year the Commission would report to the
Congress and the President concerning the action it had taken, the
names, salaries, and duties of its employees, and the money it had dis-
bursed. In addition, the Commission would make such recommenda-
tions for legislation as it deemed necessary.
The Commission would appoint an executive director and a general
counsel to serve at the pleasure of the Commission. The Select Com-
mittee recommends that the executive director be responsible for the
administrative operations of the Commission and that lie perform
13 -A- n Important ^function of the Commission could be to act as a repository for informa-
ona documents that would have historical interest. Further, candidates could agree to
utilize this aspect of the Commission — which might be called The Library of Political
comment to file copies of their itineraries and campaign literature so as to reduce the
temptation to employ spies to learn of the activities of opposition candidates.
566
such duties as may be delegated to him by regulations or other orders
of the Commission. Because the committee believes that the Commis-
sion should not be permitted to delegate to the executive director or the
general counsel the power or responsibility of making any of the Com-
mission’s regulations, it does not adopt the wording of section 309(h)
of H.R. 7612 and section 308(f) of S. 3044 which provide that the
Commission shall not delegate to the executive director the making of
regulations regarding elections. Presumably, this section permits the
Commission to delegate to the executive director the responsibility for
making some regulations. Although it is unclear what responsibilities
the executive director would have under this section, the committee
suggests that the nature of the Commission’s responsibilities would
not best be served by granting to one person the ultimate power to
regulate either the procedure or the administration of Federal
elections.
To insure that the Commission is responsive to the Congress as well
as to the President, the committee supports certain other provisions of
S. 3044. Thus, whenever the Commission submits any budget estimate
or request to the President or the Office of Management and Budget,
it should be required concurrently to transmit a copy of that estimate
or request to the Congress. The committee recommends enactment of
section 308 (k) (1) of S. 3044 which proposes that whenever the Com-
mission submits any legislative recommendations, or testimony or com-
ments on legislation requested by the Congress or by any Member of
Congress to the President or to OMB, that it shall concurrently trans-
mit a copy thereof to the Congress or to the Member requesting the
information.
The committee also supports that part of section 308 (k) (1) which
proposes that no officer or agency of the United States shall have any
authority to require the Commission to submit its legislative recom-
mendations or testimony, or comments on legislation to any officer or
agency of the United States for approval, comments, or review, prior
to the submission of such recommendations, testimony, or comments
to the Congress. In addition, the committee recommends that no officer
or agency of the United States have authority to require the Commis-
sion to submit its regulations to any officer or agency of the United
States before such regulations are adopted by the Commission.
The committee recommends that the Commission be vested with all
the powers included in section 309 of S. 3044. Specifically, the Com-
mission would have the power to require any person to submit writ-
ten reports and answers to questions as the Commission may prescribe.
The Commission would have the power to administer oaths and to
require by subpena the attendance and testimony of witnesses and
the production of all documentary and other evidence relating to the
execution of its duties. In addition, the Commission would have the
power to order testimony to be taken by deposition and to initiate,
prosecute, defend and appeal, through its General Counsel, any civil
action in the nam e of the Commission.
In order to give the Commission primary jurisdiction over enforce-
ment of statutes regulating Federal elections and campaigns the
Committee supports section 309(d) of S. 3044. This section provides
that, notwithstanding any other provision of law, the Commission
would be the primary civil enforcement agency for violations of the
567
provisions of S. 3044 and sections 602, 608 and 610-617 of title 18,
United States Code, While S. 3044 provides that any violation of such
provision shall be prosecuted by the Attorney General or Department
of Justice personnel after consultation with, and obtaining the consent
of, the Commission, the Select Committee recommends in accordance
with its other recommendations that the Commission refer apparent
criminal violations to the Permanent Office of Public Attorney when
appropriate.
The present statutory framework is deficient in failing to provide
a civil penalty. There are numerous provisions of present and pro-
posed law which, if violated, would best be handled on a civil rather
than a criminal basis. For example, the late filing of required cam-
paign financing reports traditionally have gone unpunished because
the violation of law did not appear to merit the imposition of a crimi-
nal penalty. Imposing a civil fine would be an appropriate means of
enforcing this statute in nonflagrant cases.
Consequently, the committee recommends adoption of section 309
(e)(1) of S. 3044 providing for a civil penalty of up to $10,000 for
each violation of the provisions of S. 3044 and of sections 602, 608
and 610 through 617 of title 18, United States Code. Civil penalties
would be assessed by the Commission only after the person charged
with a violation had been given an opportunity for a hearing.
The committee also supports section 309(f) of S. 3044 which pro-
vides a mechanism by which the Commission may provide advisory
opinions. The Commission would issue sucli opinions, within a rea-
sonable time, as to whether any specific transaction or activity inquired
of constitutes a violation of S. 3044 or of any provision of title 18,
United States Code, over the Commission has primary jurisdiction. 14
2. The committee recommends enactment of a statute prohib-
iting cash contributions and expenditures in excess of $100 in
connection with any campaign for nomination or election for
Federal office.
Although the reporting and disclosure requirements of the Federal
Election Campaign Act minimize the availability of unaccounted for
campaign funds, there is presently no Federal statute regulating the
use of cash during political campaigns. The difficulties of tracing the
use of cash contributions and expenditures during a campaign are
apparent. The committee’s investigations showed the abuses of cash
funding during the 1972 campaign. Cash contributions from corpora-
tions as well as individuals and cash expenditures by political com-
mittees w^ere commonplace.
Corporate funds were illegally laundered through foreign banks
and subsidiaries and then contributed in cash form to political com-
mittees which reported neither the source nor the ultimate use of the
money. The exact amount of cash collected during the campaign can-
not accurately be determined. However, in testimony before the Select
Committee, Hugh Sloan testified that of the $20 million collected by
14 Another function of the Commission could be to publicize the relevant laws and the
importance of citizen participation in politics, whether by expending time and effort in a
contest or making a small contribution. For example, importance of this activity in gen-
erating small contributions is demonstrated by the quadrupling of the use of the income
tax check-off following its being moved to page 1 of IRS Form 1040 and the simultaneous
publicity given to it.
568
the campaign prior to April 7, 1972, $1.7 or $1.8 million was in cash, 15
and cash contributions to Democratic candidates totaled hundreds of
thousands of dollars. A prohibition on cash contributions in excess of
$100, coupled with the disclosure requirements of the 1971 Act, would
be a deterrent against unreported cash contributions from individuals
and corporations. In this regard, the committee supports section 616
of S. 3044 which prohibits political contributions in the aggregate over
$100 unless the contribution is made by a written instrument, such as a
check, identifying the person making the contribution.
The committee also supports section 311(b) of the bill which pro-
hibits a political committee from expending in excess of $100 in cash
in connection with a single purchase or transaction. In this regard,
there may be instances where larger amounts of cash may have to be
expended — for example, buying meals for campaign workers— and it
may be desirable for the commission to have the power to make limited
exceptions by regulation and require certain recordkeeping or the
like.
3. The committee recommends enactment of statute requiring
each candidate for the office of President or Vice President to
designate one political committee as his central campaign com-
mittee with one or more banks as his campaign depositories.
Under the present system of campaign disclosures every political
committee supporting a Presidential candidate must file periodic re-
ports with the Office of Federal Elections of the General Accounting
Office. 16 There is no present requirement, however, that a Presidential
candidate consolidate the records of contributions and expenditures of
political committees made for his benefit or on his behalf, thereby
partially undermining the law’s disclosure requirements. During the
1972 campaign, contributions and expenditures for particular can-
didates were made into and out of hundreds of committees.
In the interest of establishing more uniform accounting and report-
ing procedure, the Select Committee recommends the adoption of
sections 310 and 311 of S. 3044. 17 Section 310 requires each candidate 18
to designate one political committee as a central campaign committee
and permits each candidate for the office of President to designate
one political committee in each State as his State campaign committee
for that State. Central campaign committees would be required to
file statements and reports with the Federal Elections Commission.
Other political committees which are not central campaign committees
15 2 Hearings 535.
Section 304(a) of the Federal Election Campaign Act of 1971 provides in part :
Each treasurer of a political committee supporting a candidate or candidates for election
to Federal office, and each candidate for election to such office, shall file with the appropriate
supervisory officer reports of receipts and expenditures on forms to be prescribed or
approved bv him. Such reports shall be filed on the 10th day of March, June, and Septem-
ber, in each year, and on the 15th and 5th days next preceding the date on which an
election is held, and also by the 31st day of January.
17 These provisions are virtually identical to sections 310 and 311 of S. 372 which passed
the Senate on July 30, 1973.
18 Section 301 of the Federal Election Campaign Act of 1971 defines the term “candidate”
as follows :
... an individual who seeks nomination for election, or election, to Federal office,
whether or not such individual is elected, and, for purposes of this paragraph, an individual
shall be deemed to seek nomination for election, or election, if he has (1) taken the action
necessary under the law of a State to qualify himself for nomination for election, or elec-
tion, to Federal office or (2) received contributions or made expenditures, or has given his
consent, for any other person to receive contributions or make expenditures, with a view to
bringing about his nomination for election, or election, to such office.
569
of the candidate would be required to file their statements and reports
with the central campaign committee instead of the Commission.
Laundering of funds is often accomplished by contributing and
transferring funds from committee to committee so as to obscure the
original source and make it impossible to trace the money to the in-
tended beneficiary or use. The Select Committee believes that the
requirements of a central campaign committee and a designated de-
pository increase the traceability of campaign funds by putting the
responsibility for collecting and reporting campaign financial in-
formation in a centralized place.
4. The committee recommends enactment of a statutory limi-
tation on overall campaign expenditures of Presidential candi-
dates. The committee proposes a limit on expenditures of 12 cents
times the voting age population during a general election.
Present law permits unlimited spending for Presidential campaigns.
As a result, the cost of Presidential campaigns has been rising at an
astounding rate. In 1956 President Eisenhower’s campaign for re-
election cost approximately $8 million. The 1972 Presidential cam-
paign cost oyer $100 million. If Presidential candidates are permitted
to raise unlimited amounts of money, campaign spending will con-
tinue to soar leading to uneven access to the electorate and surpluses
in the hands of certain candidates.
The Select Committee believes that a limit on contributions by
source must be accompanied by an overall limit on expenditures.
Since a $3,000 limitation on campaign contributions (recommended
below) is an advantage to incumbent candidates — -who are able to
obtain, moderate-sized contributions from a large number of individ-
uals — an overall limit on campaign expenditures is needed to minimize
the disparity in campaign spending between incumbents and
challengers. 19
The committee recommends the adoption of the limitation provided
for in section 614 of S. 3044 as passed by the Senate. As reported by
the Senate Committee on Rules and Administration the bill called
for an overall limitation of 15 cents times the voting age population of
the United States. 20 The full Senate, however, adopted an amendment
introduced by Senator James Allen (D-Ala.) to reduce to 12 cents the
multiplier applied to the voting age population to obtain the overall
limitation. The bill also provides that expenditures made by or on
behalf of a. Vice Presidential candidate are, for purposes of the ex-
penditure limitation, considered to be made by the Presidential candi-
dates with whom he is running.
The Select Committee further recommends a limitation on expendi-
tures of Presidential candidates in primary elections. In this regard,
the committee recommends adoption of the limitation provided for in
section 504(a) (2) (A) of S. 3044. This section provides for an expendi-
“There may be a constitutional argument against limiting campaign expenditures —
that the Government cannot deprive a candidate of the right to address voters or the
right of the voters to be exposed to the issues in a campaign. See Election Reform : Basic
References, U.S. Senate Select Committee on Presidential Campaign Activities, Committee
Print, November 1973. pp. 57-88. 271-336, 421-516, 627-61. Of course there are considera-
tions that support reasonable limitations and it is believed that a limitation such as
appears in S. 3044 would be acceptable to the courts.
20 The term “Voting Age Population” is defined in Section 504(g) of S. 3044 as: “resi-
dent population, 18 years of age or older.”
570
ture limit of “two times the amount which a candidate for nomination
for election to the office of Senator from that State may expend in
that State in connection with his primary election campaign.”
While the imposition of a realistic ceiling is an important and nec-
essary reform, caution should be exercised lest a ceiling be placed so
low as virtually to insure the renomination and reelection of incum-
bents. Since an incumbent is generally better known and begins with
a substantial built-in advantage, to limit challengers unduly would
prevent their getting known and instituting a serious challenge. Fur-
thermore, it should be recognized that it costs a considerable amount
of money to raise small and medium-size contributions. It costs very
little to solicit more than $10 million in contributions in $100,000
increments ; on the other hand, many direct mail campaigns designed
to raise large numbers of small contributions actually lose money. 21 In-
flationary factors should be taken into account in any ceiling to permit
an upward adjustment. The committee recommends that any overall
limit on campaign expenditures be evaluated following the first elec-
tion in which it applies to make certain that it is neither too low nor
too high.
5. The committee recommends enactment of a statutory limi-
tation of $3,000 on political contributions by any individuals to
the campaign of each Presidential candidate during the prenomi-
nation period and a separate $3,000 limitation during the post-
nomination period. A contribution to a Vice-Presidential candidate
of a party would be considered, for purposes of the limitation, a
contribution to that party’s Presidential candidate.
The basic purpose of a limit on contributions from any one source
is to minimize the potential influence or appearance of impropriety
which might result from large contributions. An additional objective
of the limit is to broaden the base of candidates’ financial support by
appealing to larger numbers of voters. However, the limit must not be
set so low as to make private financing of elections impractical. In
addition, the limitation must meet the apparent first amendment re-
quirement that restrictions on political contributions be limited to the
minimum regulation necessary to serve a compelling need. 22 Al though
present law does not limit the amount of contributions to Presidential
candidates (18 IT.S.C. 608), the Federal Corrupt Practices Act, which
was repealed by the Federal Election Campaign Act of 1971, did pro-
hibit contributions in excess of $5,000. Fraught with ambiguity and
loopholes, this limitation proved to be totally ineffective, in part be-
cause there was no recommendation of single committee responsibility.
Any statutory prohibition should be drafted so as to avoid the problems
of the earlier statute. 23
21 According to a study prepared for the committee by GAO, a large portion of the con-
tributions to the Presidential campaigns would have been lost if there was a limit of
$3,000. GAO estimates that the candidates would have lost the following proportion of
their total receipts : Nixon — 52% ; McGovern — 27% ; Humphrey — 69% ; Muskie — 33%.
22 See generally, Election Reform : Basic References, U.S. Senate Select Committee on
Presidential Campaign Activities, Committee Print, supra.
23 During the 1972 campaign many large contributions were made in the form of stock.
Much of this stock had appreciated in value and it appears that no tax was paid on the
appreciated value. No illegality was detected in connection with these transactions. How-
571
The committee believes that a separate $3,000 contribution limitation
is reasonable as applied to Presidential campaigns. Thus, an individual
could contribute $3,000 to candidate A and a separate $3,000 to candi-
date B during the prenomination period. If candidate A becomes the
nominee of his party, this individual would be allowed to give an
additional $3,000 to candidate A’s campaign during the general elec-
tion. While any limitation is somewhat arbitrary, the committee con-
siders President Nixon’s proposal of a $15,000 limitation for each
campaign primary, runoff, and general election to be too high. 24 Under
S. 3044 as passed by the Senate, the $3,000 limitation does not apply
separately to the primary and the general election period. 25
A necessary corollary to a limit on contributions to Presidential
candidates is a limitation on independent expenditures on behalf of a
candidate without his authorization. 26 Such expenditures, if unre-
stricted, could be used to avoid and thereby undermine any limitation
on contributions. F or example, a person might purchase a series of full-
page newspaper advertisements on behalf of- a candidate. 27 On the
other hand, there are serious constitutional arguments against an out-
right prohibition on independent campaign expenditures in view of
the right of expression guaranteed by the first amendment. 28 A reason-
able solution seems to be the adoption of a rule to the effect that if an
individual acted on his own, and not at the suggestion or request of
the candidate, he could expend a separate $1,000 on behalf of one or
more candidates during the prenomination and general election pe-
riods and would have the responsibility for reporting expenditures
aggregating over $100 on behalf of any candidate; such independent
expenditures on behalf of a candidate would not count toward the
overall expenditure limit of the candidate. The committee believes
that this limitation is a constitutional balance between the competing
interests of free speech and the governmental interest in campaign
regulation. 29
ever, some inequity seems to have resulted from this practice : thus, the donor of a gift of
appreciated property to a private charity must pay a capital gains tax and there seems to
be no reason why a contribution to a political party or candidate should be favored. Con-
tributors of stock should be required to make their contributions in after-tax dollars just as
other contributors. Although the adoption of a contribution limit reduces the scope of this
inequity, it does not eliminate it. While the Internal Revenue Service has, by regulation,
resolved this problem, it is believed a more permanent solution is required. Therefore, the
appropriate Congressional committees should direct themselves to this question.
24 In view of the fact that in 1972 there were 21 primaries plus the general election, a
$15,000 limit per contest would have permitted a contributor to have given $330,000 to a
candidate who entered all primaries and was the party’s nominee. Such a provision could
hardly be viewed as a major improvement over present law.
25 The original version of the bill reported by the Senate Rules Committee applied the
$3,000 limitation separately to each primary and primary runoff and the general election.
Under this proposal one person could have contributed $3,000 to each of several primary
campaigns of one candidate, up to a total of $25,000.
26 An expenditure made on behalf of a candidate with express authorization of the candb
date must be considered a contribution to the candidate and, therefore, covered by the limi-
tation on contributions to Presidential candidates.
27 This method was engaged in on a substantial basis by Stewart R. Mott who supported
Senator McGovern’s candidacy.
2fl See American Civil Liberties Union v. Jennings, 366 F. Supp. 1041 (D.D.C. 1973),
probable jurisdiction noted, June 10, 1974. 42 U.S.L. Week 3678, where a three-judge dis-
trict court held section 104(a) of the Federal Elections Campaign Act of 1971 unconstitu-
tional. That section prohibited the media from accepting campaign advertising unless the
candidate or his representative certified that the expenditure would not exceed the can-
didate’s statutory limit. A substantial portion of the responsibility for ascertaining the
facts was placed on the media.
29 See, for example. Senate Committee on Rules and Administration. S. Rep. No. 93-689,
93d Cong., 2d Sess. 18-19 (1974).
572
6. The committee recommends that the Internal Revenue Code
be amended to provide a credit in a substantial amount on indi-
vidual and joint Federal income tax returns for any contribution
made in a calendar year to a political party or any candidate
seeking election to any public office, Federal, State, or local.
In light of the fact that strict limitations on the form and amount
of contributions are likely to create a shortage in the availability of
campaign funds, the committee recommends the adoption of an effec-
tive new incentive to encourage an adequate number of small con-
tributions.
The incentive which the committee suggests is a 100-percent tax
credit for contributions up to a certain level, for example, $25 for an
individual return and $50 for a joint return. The present law provides
that a taxpayer may claim a 50-percent tax credit for a contribution
up to $12.50 or a tax deduction up to $50; the amount is double in
the case of a joint return.
The basic argument in favor of a 100-percent tax credit is that it
provides a substantial amount of encouragement to the individual —
particularly when combined with an educational campaign— to exer-
cise his option to contribute to the candidate of his choice without the
Government becoming involved directly in using tax funds for partisan
campaign purposes. Certain other points may be made about the 100-
percent credit : first, it draws on previous experience with a 50-percent
tax credit and does not involve a wholesale reorganization of the
present system with the risk that new problems will unexpectedly
emerge; second, it is essentially a selfgenerating system which does
not require a substantial machinery to administer; and third, it in-
volves a uniform approach to primaries and elections and deals with
the difficult problems of defining the desired level of support, if any,
when there is a large number of fringe candidates, old parties that
seem to have lost their following and new ones that appeal to a large
number of voters. It should be noted that the proposal basically ties
Government support to the support that the candidate has among the
electorate and not to the support he may have among contributors.
This is the case because, aside from the few months delay before a
citizen can offset his tax credit against his taxes, a contribution below
the credit ceiling costs a tax-paying contributor nothing.
7. The committee recommends against the adoption of any
form of public financing in which tax moneys are collected and
allocated to political candidates by the Federal Government.
The Select Committee opposes the various proposals which have been
offered in the Congress to provide mandatory public financing of
campaigns for Federal office. While recognizing the basis of support
for the concept of public financing and the potential difficulty in ade-
quately funding campaigns in the midst of strict limitations on the
form and amount of contributions, the committee takes issue with the
contention that public financing affords either an effective or appro-
priate solution. Thomas Jefferson believed “to compel a man to furnish
contributions of money for the propagation of opinions which he dis-
believes and abhors, is sinful and tyrannical.”
573
The committee’s opposition is based like Jefferson’s upon the funda-
mental need to protect the voluntary right of individual citizens to
express themselves politically as guaranteed by the first amendment.
Furthermore, we find inherent dangers in authorizing the Federal
bureaucracy to fund and excessively regulate political campaigns.
The abuses experienced during the 1972 campaign and unearthed by
the Select Committee were perpetrated in the absence of any effective
regulation of the source, form, or amount of campaign contributions.
In fact, despite the progress made by the Federal Elections Cam-
paign Act of 1971, in requiring full public disclosure of contributions,
the 1972 campaign still was funded through a system of essentially
unrestricted, private financing.
What now seems appropriate is not the abandonment of private
financing, but rather the reform of that system in an effort to vastly
expand the voluntary participation of individual citizens while avoid-
ing the abuses of earlier campaigns.
8. The committee recommends enactment of a statute pro-
hibiting the solicitation or receipt of campaign contributions from
foreign nationals.
Under present law (18 U.S.C. 613) it is a felony to solicit, accept or
receive a political contribution from a foreign principal or an agent of
a foreign principal. 30 Section 613 also prohibits an agent of a foreign
principal from making a political contribution on behalf of his prin-
cipal or in his capacity as agent of the principal. The legality of politi-
cal contributions by foreign nationals, then, hinges on the definition of
the term “foreign principal.” The Department of Justice has expressed
the opinion that the term “foreign principal” as used in the section
613 does not have the same meaning as “foreign national.” Since the
term “principal” connotes the existence of an agency relationship, it is
the Department’s view that a foreign national is a foreign principal
within the meaning of section 613 only if the principal has an agent
within the United States. Therefore, in the opinion of the Depart-
ment, it is not a violation of the statute to accept a direct political con-
tribution from a foreign national who does not have an agent within
the United States. 31
As used in the prohibiting statute, the term “foreign principal,”
includes governments of foreign countries, foreign political parties,
persons outside the United States who are not U.S. citizens and part-
nerships, associations, corporations, organizations or other combina-
tions of persons organized under the laws of or having its principal
place of business in a foreign country.
The legislative history of 18 U.S.C. 613 explains why
the statute sanctions direct contributions by foreign nationals
while prohibiting contributions by their agents. The statute was en-
30 18 U.S.C. 613 provides : Whoever, being an agent of a foreign principal, directly or
through any person, either for or on behalf of such foreign principal or otherwise in his
capacity as an agent of such foreign principal, knowingly makes any contribution of money
or other thing of value, or promises expressedly or impliedly to make any such contribution,
in connection with an election to any political office or in connection with any primary
election, convention, or caucus held to select candidates for any political office, or whoever
knowingly solicits, accepts, or receives any such contribution from any such agent of a
foreign principal or from such foreign principal — shall be fined not more than $5,000 or
imprisoned not more than five years or both.
31 Letter from L. Fred Thompson, Director of the Office of Federal Elections, General
Accounting Office, printed in 93d Cong. Rec. March 28, 1974.
574
acted into law as a part of the Foreign Agents Registration Act
Amendments of 1966. 32 The thrust of the 1966 amendments was to
require disclosure of the political activity of foreign agents within the
United States. The committee report of the Senate Foreign Relations
Committee states :
The act is intended to protect the interests of the United
States by requiring complete public disclosure by persons
acting for or in the interests of foreign principals where their
activities are political in nature or border on the political.
Such public disclosures as required by the act will permit the
Government and the people of the United States to be in-
formed as to the identities and activities of such persons and
so be better able to appraise them and the purposes for which
they act.
The Congress did not consider the issue of direct political contribu-
tions by foreign nationals when it enacted the Foreign Agents Registra-
tion Act or its 1966 amendments. Furthermore, none of the other
major acts of Congress dealing with political campaigns and elec-
tions — the Corrupt Practices Act, the Hatch Act and the Federal
Election Campaign Act of 1971 — has amended Federal law to prohibit
direct contributions by foreign nationals.
Thus, the present statute permits political contributions from indi-
viduals who neither reside in the United States nor have the right to
vote in elections within the United States. Investigations by the Select
Committee have revealed that a number of political contributions — in-
cluding loans to US. citizens — were in fact made by foreign nationals
who were associated with or employed by firms doing busi-
ness in the United States. Presumably, these contributors were
motivated by a desire to support candidates whom they expected to
create or maintain a favorable atmosphere for the business commu-
nity or their specific economic interest. Other foreign nationals indi-
cated to the committee that their contributions were motivated by a
general interest in American Presidential politics and world leader-
ship.
In addition to direct contributions by foreign nationals during
1972, hundreds of thousands of dollars, including illegal contributions
from corporate funds, were laundered through foreign banks and
foreign companies. These abuses illustrate that the present statute,
which sanctions direct contributions by foreign nationals, undercuts
other election laws such as the disclosure requirements and the prohi-
bition on corporate contributions. Furthermore, since foreign banks
generally are not subject to U.S. law and enforcement process, laun-
dered funds are difficult to trace.
The proposed statute would prohibit political contributions by
foreign nationals whether or not they have agents within the United
States. An exception to the general prohibition should be made to
permit contributions by resident immigrants who intend to reside in
the United States on a permanent basis who have a legitimate interest
in Presidential elections. In addition, because of the limited interest
on the part of foreign nationals who reside in the United States dur-
32 The original Foreign Agents Registration Act was enacted in 1938 “to identify agents
of foreign principals who might engage in subversive acts or in spreading foreign propa-
ganda, and to require them to make public record of the nature of their employment.”
Viereck v. United States , 318 U.S. 236, 241 (1943).
575
ing a substantial part of the year — even though they lack permanent
residence status- — in the affairs of this country, some attention should
be given to permit some political contribution activity on the part of
these persons such as by authorizing contributions in reduced amounts.
The proposed prohibition on contributions by foreign nationals is
based on the belief that those who cannot vote in American elections
should not be permitted to influence elections in this country by mak-
ing contributions to political campaigns. The argument is bolstered
by the notion that foreign nationals do not have a stake in our electoral
process ; their loyalties are to their own countries and their own gov-
ernments. The prohibition, then, helps protect the integrity of our
campaign financing system without depriving any citizen or perma-
nent resident of the right to contribute to campaigns. 33 The recom-
mended prohibition should be implemented by placing responsibility
on the candidates or the candidates’ political committees to refuse
donations proffered by foreign nationals. Present disclosure and re-
porting laws require the name of the donor, his mailing address, occu-
pation, and principal place of business on all contributions over $10.
Therefore, the responsibility to refuse prohibited foreign contribu-
tions would not impose an undue burden on candidates or their
committees.
9. The committee recommends that no Government official
whose appointment required confirmation by the Senate or who
was on the payroll of the Executive Office of the President be per-
mitted to participate in the solicitation or receipt of campaign
contributions during his or her period of service and for a period
of 1 year thereafter.
During the 1972 campaign there was a widespread transfer of key
administration officials from the White House and from departments
and agencies to high positions in the campaign effort. In certain cases,
these officials or their assistants went to the very persons, over whom
they previously wielded regulatory or other power to solicit campaign
contributions. Particularly in view of the likelihood that many of
these officials would return to the Government, solicitation by them
may well have had undesirable coercive aspects. While the entire
practice of carving the campaign force out of the administration on a
temporary basis seems highly questionable, the committee recommends
as a minimum step that high administration officials who leave to enter
the campaign be barred from engaging in fundraising activities for a
period of 1 year.
10. The committee recommends that stringent limitations be
imposed on the right of organizations to contribute to Presidential
campaigns.
One of the major abuses investigated by the Select Committee was
the apparent attempt on the part of the several large dairy cooperatives
to utilize their contribution potential of millions of dollars to influence
33 During debate of S. S044, it stated that, according to the State Department, 1 ,750,000
TJ.S. citizens are living abroad, exclusive of military and tourists. When an amendment to
S. 3044 was offered to prohibit political contributions in the form of written instruments on
a foreign bank, concern was expressed that American citizens living abroad would be duly
inconvenienced. Further study appears warranted to explore the feasibility of prohibiting
contributions by a U.S. citizen living abroad.
35-687 0 - 74-38
576
administration decisions. The ability of associations and organiza-
tions — whether they be composed of individuals, corporations, or un-
ions — to band together and pool their contributions has given rise to
enormous contributions. At the p resent time, a number of organizations
have hundreds of thousands, or even millions, of dollars ready to be
mobilized for a particular candidate or cause.
In a proposed system which limits the size of individual contribu-
tions and campaign expenditures it would be intolerable if organiza-
tions could continue to offer and contribute huge amounts of money.
Whether it is desirable or, in view of the first amendment right to free
speech and assembly, constitutional to ban outright the ability of in-
dividuals or entities to pool their resources is open to question. In any
case, a limit must be placed on the right of organizations to make con-
tributions. In the context of a Presidential race it appears that a limit
of $6,000 — the figure contained in S. 3044 — would tend to avoid the
problem of undue influence by organizations while providing them an
opportunity to participate in the political process.
In the event that organizations are permitted to make contributions
to Presidential campaigns, certain procedural reforms should be en-
acted for union or corporate committees covered by sections 610 and
611 of title 18: First, that individual members of any organization
which solicits contributions be permitted to designate the ultimate
recipient of the contribution. Second, that organization officials who
are given the power to allocate funds not designated by the members
be democratically elected. Third, that the organization make periodic
audited financial reports to the persons participating. Fourth, that
members of organizations be given the option to contribute directly
to the candidate of their choice without the knowledge of their
superiors.
11. The committee recommends that violations of the major
provisions of the campaign financing law, such as participating in
a corporate or union contribution or a contribution in excess of
the statutory limit, and making a foreign contribution, shall
constitute a felony.
At the present time, violation of the law prohibiting contributions
by corporations or labor unions is punishable by up to 1 year in prison
or 2 years if the violation was “willful” (section 610 of title 18). On
the other hand, contributions by a foreign national in violation of
section 613 of title 18 or by a Government contractor in violation of
section 611 of title 18 are punishable up to 5 years imprisonment and
there is no provision for a nonwillful misdemeanor charge.
The committee believes that, in view of the seriousness that attaches
to any contribution from sources prohibited by law, violation of all
of the above provisions relating to corporate or union contribution
should be treated the same as sections 611 and 612. It further believes
that the provision which creates a “nonwillful” violation of section
610 should be removed and that conduct that might be covered by such
a provision, for example, the negligent participation in a corporate
contribution by the comptroller of a company, should be treated as a
civil violation.
In the past year the availability of the misdemeanor provision in
section 610 has permitted the Special Prosecutor to encourage the
577
voluntary disclosure of illegal corporate contributions. Public testi-
mony from, and private interviews of, corporate executives reflected
both an ignorance of the provisions of section 610 and the belief that
violation of this provision was merely a “technical” violation of law. 34
In view of recent events, including the committee’s public hearings,
it appears proper to consider the giving of an illegal corporate con-
tribution for what it is, namely, the illegal diversion of money held
in trust, and to treat it with the seriousness it deserves— as a felony.
84 Although a number of corporate officials indicated a lack of awareness of the provi-
sions of 18 XJ.S.C. 610, it appears that there have been 17 prosecutions under the statute
between May of 1968 and December of 1971 alone. Based on information supplied to the
committee by the Department of Justice, it appears that there were convictions in 11 of
the cases. With the exception of the prosecution of William (Tony) Boyle where there
was a jail sentence imposed of 5 years and another case involving the Pipe Fitters Local
Union No. 562, St. Louis, Mo., where a one-year prison term was reversed by the Supreme
Court, all convictions resulted in fines which ranged from $2,500 to $50,000.
CHAPTER 5
Milk Fund
INTRODUCTION
National attention was first focused on the Nation’s leading dairy
cooperatives in 1971 when it was discovered that the administration’s
decision to raise the level of Federal milk price support subsidies for
dairy farmers was followed almost immediately by some contributions
which, within 6 months, amounted to more than $300,000 to Republican
committees, including about a quarter of a million dollars to President
Nixon’s reelection committees established especially for the “milk
money.” When the Select Committee undertook its investigation of the
alleged quid pro quo , it soon found that price supports were just one
item on the dairymen agenda. In fact, the milk producers, represent-
ing one of the wealthiest political funds in America and one of the
largest groups of contributors to the 1972 campaign, had actively
sought favorable action from the Nixon administration throughout
its first term on a number of matters of great financial importance to
dairy farmers at the same time that they were pledging hundreds of
thousands, and even millions, of dollars to President Nixon’s reelection
campaign — with the knowledge of the President himself and with
the encouragement of top Presidential aides and fundraisers.
The milk price support increase in 1971 granted by the President
was worth at least tens of millions of dollars to the milk producers,
and they spared no effort in seeking that favorable action. In 1970, the
co-op leaders had pledged $2 million “or more” to the President’s
campaign and, when called upon to reaffirm that pledge before the
President’s favorable decision was announced the following March,
the dairymen readily obliged.
Those involved in the March 1971 price support matter — the Presi-
dent, his key aides, including Haldeman, Ehrlichman, and Colson,
and dairy representatives — each deny that there was a quid pro quo
of dairy contributions in exchange for the Presidential increase. The
President has asserted that, instead, his action was influenced primarily
by Democratic congressional pressure (generated by the dairymen)
for an increase coupled with the President’s fear of losing dairymen
support in his 1972 reelection bid if he opposed them.
Much of what the President says is supported by the surrounding
events. The dairy lobbly had successfully gathered the support of about
a quarter of each House in support of bills to raise the support level.
But the President’s position does not take into account other key
facts uncovered by the Select Committee in the course of its investi-
gation which shed light on the type of potential “support” the dairy-
men represented. To be sure, there were economic arguments advanced
( 579 )
580
to support an increase. However, all of the President’s agricultural
economic experts opposed an increase on the merits. The crux of the
committee’s investigation was, thus, not whether it was the correct
decision but whether the President made that decision for the “wrong”
reason.
The President was well aware that at the time he considered the
price support matter the milk producers had pledged $2 million to
his campaign — but had not delivered one penny toward that, pledge.
In March 1971, at least some dairy leaders had considered boycotting
further Republican fundraising efforts because of the administra-
tion’s position on price supports. At the same time, the President’s
reelection campaign had just been organized and was seeking “early
money” toward a campaign goal of $40 million. What’s more, meet-
ing that goal was considered very important, because the President
faced a tough, even uphill fight for reelection — in one leading Presi-
dential poll at the time, the President trailed the. Democratic front-
runner, Senator Muskie, by a full 5 percentage points.
With that as the setting, the President on March 23, 1971, met
first with dairy leaders in the Cabinet Room and then later that day
with his top aides in the Oval Office where he announced his decision
which reversed the decision of the administration announced 11 days
earlier. At the conclusion of the second meeting, a Presidential aide
was instructed to “alert” the dairymen of the decision before its pub-
lic announcement.
The message to the dairymen carried an additional twist. The
committee has uncovered evidence to show that on the 23d the co-op
leaders were informed that an increase was a good possibility but not
certain. The second dimension to the message concerned dairy con-
tributions: A key dairy leader (Harold Nelson) was expected to re-
affirm the $2 million pledge at a late night meeting (arranged by Ehr-
lichman) prior to the public announcement with dairy lawyer (and
Nixon associate) Murray Chotiner, and Herbert Kalmbach, the Presi-
dent’s personal attorney and chief fundraiser. During the 24 hours
prior to the meeting, Nelson engaged in last-minute efforts to seek sub-
stantial commitments from his fellow dairy leaders, and, at the pre-
arranged meeting, Kalmbach was informed of the reaffirmation “in
view of” the price support increase which had been set for the next
day. The increase was announced as scheduled, and in the weeks and
months that followed the “milk money” flowed to the President’s cam-
paign.”
Other matters of importance to the milk producers included dairy
import quotas, Government cheese purchase and school milk programs,
and the approach taken by the. Antitrust Division of the Justice De-
partment toward certain practices of the dairy co-ops. At least some
of these matters were discussed time and again by dairy leaders and
Presidential aides at the very same time that large Presidential con-
tributions were also mentioned.
The tone of milk producer-Nixon administration contacts is ex-
emplified by other events in the President’s first term : In mid-1969,
the milk producers gave $100,000 cash to Kalmbach (later paid from
corporate funds) and promised $150,000 more that year directly in
exchange for the opportunity to meet with White House, aides to press
their case for higher price supports and meetings with the President
581
himself. In 1970, in the course of their subsequent dealings with Colson
on dairy problems, the milk producers stepped up their commitments
to at least $2 million, and Colson is reported to have replied : “This is
a $2 million package.” Colson subsequently informed the President of
the pledge. Several months later, a dairy lawyer (and friend of the
President) in a letter to the President referred to arrangements under-
way with Kalmbach for the $2 million contribution and then went on
to ask the President for favorable action on a pending dairy import
quota matter. In 1972, in the course of efforts by Kalmbach to raise
another $750,000 from the milk producers, a top dairy leader is alleged
to have overtly offered the money in exchange for White House help
in terminating an antitrust suit that had been filed by the Justice
Department against his co-op, but the offer was rejected and the law-
suit has proceeded. In all, the milk producers provided a total of some
$632,500 to the President’s reelection effort, including $245,000 fur-
nished to the campaign just prior to the election.
Whatever the legal significance of the circumstances of the 1971
price support increase and these and other matters, the milk producers
perceived some Nixon officials as having a dual role of both policy-
maker and fundraiser.
Whether or not these two roles were directly tied, they appeared to
the dairymen to be linked, and this had a significant impact on the ap-
proach taken by them. Nelson said they gave the first $100,000 in 1969
because “it appeared we were not going to get anyplace if we did
not.” And when called upon in March 1971 to reaffirm the $2 million
pledge, Nelson explained that he felt he had no choice :
We knew, and [Kalmbach] knew that we were interested
in matters other than just the price support decision. We
weren’t in any position to say, if you don’t do this we’re not
going to make the contribution.
sfc * jfs * sfc
I think they would have been fully justified in saying, “we
don’t want any more conversations with you about any-
thing.”
These matters are elaborated on in detail in the Milk Fund report
that follows. At the end of the report, a list of key persons and organi-
zations, a chronology of the events detailed in the report and selected
documents are presentd as appendices A, B, and C, respectively. The
report represents the culmination of a 9-month investigation begun
in September 1973 and conducted jointly by the committee majority
and minority staff and involved interviews with over a hundred
persons who were present or former officials of the White House and
the Executive Office of the President, the Department of Agriculture,
the Justice Department, the Treasury Department, the Internal Rev-
enue Service, and the leading milk producer cooperatives. Execu-
tive session testimony, totaling several thousand pages, was taken from
over 30 witnesses most of which is printed, together with accompany-
ing exhibits, affidavits, and additional documents, in volumes 14
through 17 of the committee’s hearings.*
* Included in the volumes are materials on milk producer contributions to the Presidential
campaigns of Senator Humphrey and Congressman Mills, treated elsewhere in the com-
mittee’s report.
582
One key element — White House materials — has been consistently
denied by the President to the committee thereby limiting the com-
pleteness of the committee’s investigation. The committee made re-
peated requests to the White House for tapes and documents, and
finally subpenaed the President for them. Even though the President
did not assert executive privilege as to some of these materials (which,
in fact, had been handed over to private litigants in a lawsuit) , the
White House withheld everything from the committee. What’s more,
although the White House published its own account of the meeting
with the President in which he raised price supports, the President
asserted executive privilege preventing several of his aides present
at that meeting, including the Secretary of Agriculture, from testify-
ing about the discussions with the President.
Some, but by no means all, of these materials sought by the com-
mittee months ago was recently provided to the Judiciary Committee
of the House of Representatives considering impeachment of the
President. Although these materials were unavailable to the Select
Committee at the time this report w T as prepared, they have been
publicly released by the House committee and the principal additional
materials are included in appendix D to this report.
The committee’s milk fund investigation was conducted in such a
way so as to respect the rights of potential defendants. In fact, the
committee postponed its hearings on the milk fund at the request of
the U.S. attorney for the Southern District of New York because of
the pendency of the Yesco trial. Moreover, at the direct request of the
Special Prosecutor, the committee withdrew its application granted by
the court for use immunity for a key witness, Jake Jacobsen, involved
in aspects of the milk fund. In addition, Charles Colson was not
available to the committee sufficiently in advance of the preparation of
its report to permit his interrogation by the committee.
Nonetheless, the committee believes the Milk Fund report is a com-
prehensive presentation of the presently available evidence, much of
which was first uncovered by the committee, concerning the relation-
ship between the leading milk producer cooperatives and the President
in his 1972 reelection campaign.
I. BACKGROUND— THE THREE LEADING DAIRY CO-
OPERATIVES AND THEIR POLITICAL ARMS
Farmer cooperatives are not a new phenomenon. For many years
farmers, including dairy farmers, have been banding together in
cooperatives for the purpose of marketing their products for the mu-
tual benefit of their members. In the late 1960’s, however, the growth
of dairy farmer cooperatives took a dramatic turn. Under the leader-
ship of a few individuals, numerous cooperatives were merged into
three large dairy co-ops, combining over 60,000 dairy farmers and
covering essentially contiguous areas in the Southeast, Southwest,
and Midwest. Together the three co-ops account for about 25 percent
of all milk produced in this country.
One lawyer for the dairy co-ops testified before the Select Commit-
tee that their intention was to expand all the way up the Mississippi
Valley to the Canadian border. 1 One key dairy leader has even stated
1 Semer, 16 Hearings 7193. Throughout this Report, reference will be made whenever
possible, to specific pages of the testimony, taken by the Committee in executive sessions,
relating to the milk investigation. The transcripts of the testimony are printed in volumes
14 to 17 of the Committee’s hearings.
583
that he believed all dairy farmers in the country should belong to
one cooperative. 2
This emergence of the large, multi-State dairy co-op was also
marked by another event — the creation by each of the three co-ops of a
political arm consisting of thousands of farmer members, each contrib-
uting up to nearly $100 annually, for a total political chest of hun-
dreds of thousands, and even millions, of dollars each year. These huge
sums of money were placed at the disposal of one or two leaders of
each co-op. One of these leaders testified that he viewed the contribu-
tions to be made by these political arms as giving the dairy co-ops
“political poAver” and, at the very least, access to our governmental
leaders, including the President. 3
The formation, development, and activities of the three co-ops and
their political arms Avere, in many instances, coordinated. Before turn-
ing to their involvement, both joint and separate, in the 1972 Presi-
dential campaign, a brief description of the three co-ops, Associated
Milk Producers, Inc., Dairymen, Inc., and Mid-America Dairymen,
Inc., their political arms and principal officers is set forth below.
A. AssociATEn Milk Producers, Inc.
The largest and, in many Avays, most politically active dairy co-op
is Associated Milk Producers, Inc., knoivn by its acronym “AMPI.”
Its political action arm, until April 7, 1972, was Trust for Agricul-
tural Political Education, or TAPE. TAPE Avas replaced by CTAPE.
1. AMPI
AMPI consists of approximately 40,000 members in the Southwest
and central and upper Midwestern States. It was formed in late 1969,
from the merger of Milk Producers, Inc. (MPI), a co-op of farmers
primarily in the Southwest, and a number of other co-ops. It is head-
quartered in San Antonio, Tex.
AMPI is governed by a board of directors consisting of approxi-
mately 50 directors who are elected from the various geographic divi-
sions and regions of the co-op. HoAvever, full management authority is
vested in the general manager, Avho is the chief executive officer with
authority, among other matters, to hire and fire all corporate em-
ployees, attorneys, and consultants.
John Butterbrodt, a Wisconsin dairy farmer, has been the only
president of the board. The leaders of MPI were primarily responsible
for the formation of AMPI (and, indeed, the other two major co-ops) 4
and became its principal officers. Harold S. Nelson, a laAvyer and the
general manager of MPI, became general manager of AMPI. David
L. Parr, division manager for the Arkansas division of MPI, remained
in Little Bock under the new organization, but became special counsel
to the general manager.
Nelson testified that Parr was involved in all phases of AMPI ac-
tivities and that no one in the organization besides Parr and him had
such a broad range of responsibilities. 5 In a very practical, as Avell as
formal, sense, Nelson and Parr “ran” AMPI.
2 Deposition of David Parr, October 30, 1972, p. 86, United States v. Associated Millc
Producers , Inc. (Hereafter. United' States v. AMPI).
8 Parr, 15 Hearings 6786-87.
4 Nelson, 15 Hearings 6504.
6 Nelson, 15 Hearings 6504.
584
Nelson’s principal lieutenants included Bob A. Lilly and Robert O.
Isham. Lilly had been employed as a lobbyist by the Texas State Farm
Bureau in the 1960’s. One of his principal areas of responsibility for
AMPI, under Nelson, was lobbying and other political activity 6
mostly at the State level but also on some important national mat-
ters, such as Federal milk price supports. 7 Isham, a Texas CPA, was
the company’s comptroller.
On January 12, 1972, a change of management took place, when the
board replaced Nelson with Dr. George L. Mehren, a former Assist-
ant Secretary of Agriculture in the Johnson administration and later
an AMPI consultant. Parr and several other AMPI employees left
AMPI shortly after the January 1972 change.
2 . tape/otape
The idea of a political fund for dairy farmers was new to the co-op
leadership. Consequently, Nelson turned to others for advice and
guidance. One lawyer Nelson retained was Jake Jacobsen, who had
been in the Johnson White House and who has been a friend of John
Connally for 25 years. 8 Jacobsen advised Nelson and AMPI and spoke
at numerous meetings of the co-ops in 1969, 1970, and 1971 in an
apparent effort to strengthen their organizations. 9
In light of his political experience, it is not surprising that the milk
producers, through Jacobsen, would have sought out Connally for his
advice in connection with the formation of TAPE. Indeed, Connally
testified that Jacobsen and Nelson had informed him shortly after
his term as Texas Governor ended in 1969 that they wanted to form
the fund, and he advised them that there appeared to be no legal
impediments. 10
In February 1969, TAPE was formed as a trust to collect moneys
from its participant-donors — almost entirely dairy farmer members
and AMPI employees — and make political contributions on behalf of
State and Federal candidates for public office. Donations were made
by checkoffs — both from cooperative payments to its members for
the co-op’s sale of their milk and from employee paychecks. The
donations were limited by TAPE to just under $100 per year in order
to avoid the requirement to report publicly to the Clerk of the House
of Representatives the identity of contributors of $100 or more under
the then-applicable Corrupt Practices Act of 1925. 11 The use of
the technique of withholding, together with the amount withheld and
the large number of donors, resulted in a steady flow of substantial
amounts of money into the trust.
TAPE developed the “potential,” as an AMPI lawyer emphasized
to Republican fundraisers, of $1 million each year. 12 The trust fund
has exceeded its potential. In calendar year 1972, for example, it spent
nearly $1 million and still had nearly $900,000 cash on hand at year’s
end.
6 Parr, 15 Hearings 6756 : Parr exhibit No. 1, 15 Hearings 6907.
7 Nelson, 15 Hearings 6503.
8 Connally, 14 Hearings 6052 ; Jacobsen, 15 Hearings 6381.
& Jacobsen, 15 Hearings 6435-36 : Alagia, 16 Hearings 7062.
10 Connally, 14 Hearings 6051—52.
11 At first, the formula for donations by farmer members was % of 1 percent of the
farmer’s receipts from AMPI, up to $99.96. The formula was slightly revised from time to
time.
32 Semer, 16 Hearings 7192.
585
Isham was named the trustee of TAPE. Although the TAPE trust
agreement vested him with sole authority to expend TAPE funds,
the enormous TAPE resources were at the almost complete control
of one, or at most, two other individuals — Harold Nelson and, to a
more limited extent, David Parr. 13 Nelson stated that in practical
terms he made all policy decisions for TAPE. 14
In 1972, with the advent of new AMPI management and with the
effective date of the Federal Election Campaign Act of 1971, a new
entity was created to involve more persons in the decisionmaking proc-
ess for expending the political fund. The new organization, the Com-
mittee for Thorough Agricultural Political Education (CTAPE),
was formed in March 1972 with Mehren as treasurer and Lilly as
secretary, and by the end of that year, TAPE had transferred to
CTAPE substantially all its funds pursuant to authorizations solic-
ited from TAPE donors. From the effective date of the new law
(April 7, 1972) until the end of 1972, CTAPE was one of the wealth-
iest political funds of its kind in the country. 15
B. Dairymen, Inc.
The smallest of the three co-ops, with a membership of approxi-
mately 10, 000, 16 is Dairymen, Inc., or DI, which was formed in 1968.
Its formation and that of its political arm, Trust for Special Political
Agricultural Community Education (SPACE), were essentially con-
temporaneous with those of AMPI and TAPE.
1. DI
DI is a corporation based in Louisville, Ky., and its members con-
sist of dairy farmers in the Southeastern portion of the United States.
Its organizational structure is not dissimilar from that of AMPI ; in
practice, however, control of its policies do not appear to have resided
in one person to the same degree as was the case for AMPI.
John Moser was elected president of the DI board of directors. Paul
Alagia, a Louisville lawyer, served as its executive director from its
beginning until March 1971, when he returned to his law practice. 17
At that time, he was replaced by Ben F. Morgan, Jr., who currently
serves in that position.
One DI employee with responsibility in the area of legislation and
political matters is Joseph Westwater, currently vice president for
special projects. Westwater joined DI in 1969 but did not become
involved in SPACE activities until after Morgan replaced Alagia.
When Parr left AMPI in February 1972, he soon found employment
with another of the three co-ops — DI. Although, as is noted later in
this report, Parr did attend at least, one meeting thereafter in which
contributions to the President’s reelection campaign were discussed,
he testified he has not generally been involved at DI in matters relat-
ing to political contributions. 18
13 Lilly testified that Nelson and Parr made approximately 80 to 90 percent of all TAPE
contribution decisions. Lilly, 14 Hearings 5912. Nelson admitted that all 'TAPE contribu-
tions were made either pursuant to his express direction or based upon his previously
announced policies or preferences. Nelson, 15 Hearings 6505.
14 Nelson. 15 Hearings 6505.
15 According to reports filed with the GAO, CTAPE was among the top three funds in
receipts, expenditures, and cash on hand at the end of the year. See Congressional Quarterly
p. 568 (March 17, 1973).
16 Parr, 15 Hearings 6786.
17 Alagia. 16 Hearings 7059-60.
18 Parr, 15 Hearings 6900 ; see Section VII. A. 1.
586
2. SPACE
SPACE was formed in March 1969, at essentially the same time as
the formation of TAPE. 19 Since Nelson consulted with the 1)1 leader-
ship on the formation of SPACE, not surprisingly it was organized in
virtually the same way as TAPE : The co-op’s comptroller (Jim
Mueller) became the sole trustee for the trust funds ; funds were gen-
erated from regular checkoffs from farmer checks; checkoffs were
limited to a level just below $100; and practical control of the funds
rested with the DI leadership.
Although the SPACE membership was considerably smaller than
TAPE, its fund has been substantial. In 1972, for example, SPACE
receipts and expenditures each totaled nearly $300,000.
C. Mid-America Dairymen, Inc.
Mid-America Dairymen, Inc. (Mid-Am) is headquartered in
Springfield, Mo., covering portions of the Midwest.
1. MID-AM
Mid-Am was formed in 1968 along the same lines as DI and, later,
AMPI. It has a membership of approximately 20,000.
William Powell was elected president of the Mid-Am board. As
in the case of AMPI and DI, day-to-day control of the co-op rested
in top management. Its principal officer appears to have been Gary E.
Hanman. 20 Hanman has been with Mid-Am since its formation and
has held the position of senior vice president for the past several years.
2. ADEPT
With advice and encouragement from AMPI and DI, Mid-Am
formed its own political fund in the middle of 1970. Hanman re-
ceived advice from Nelson, Parr, Jacobsen, and another AMPI at-
torney, W. DeVier Pierson. 21 The result was a trust patterned along
the same lines as were TAPE and SPACE, called the Agricultural
and Dairy Educational Political Trust (ADEPT). 22 In July 1970,
shortly after ADEPT’S inception, TAPE loaned the fund $8,500 to
enable it to begin its contribution activity. 23
William A. Delano, the Mid-Am comptroller, was the ADEPT
trustee. However, Hanman apparently played substantially the same
role for ADEPT as Nelson did for TAPE : Hanman noted that De-
lano followed the recommendations of an ADEPT advisory commit-
tee which, in turn, apparently followed Hanman’s recommendations.
In fact, Hanman could not name anyone other than himself with sig-
nificant control of ADEPT’S activities. 24
Although ADEPT had a larger membership than SPACE, mem-
ber donations were smaller, so that each trust generated approxi-
mately the same level of funds. In 1972, ADEPT, like SPACE, col-
lected and spent approximately $300,000.
19 Alagia, 16 Hearings 7060.
20 Harrison, 14 Hearings 6273.
21 Hanman, 14 Hearings 5863.
22 Hanman, 14 Hearings 5864.
22 Ibid.
24 Hanman, 14 Hearings 5862.
587
II. $100,000 CASH CONTRIBUTION TO KALMBACH IN
1969— AMPI’S OBJECTIVES
By the time the dairy co-op movement coalesced in 1969, it found
itself faced with a new Republican administration. Any administra-
tion can have a tremendous impact on the welfare and livelihood of
dairy farmers — through its decision to set milk price support sub-
sidies, import controls of dairy products, purchases of cheese and
other dairy products, and other Federal programs. The leaders of
AMPI felt it was imperative for them, and the dairy industry as a
whole, to meet with, and win friends in, the new administration.
This presented a problem. Most of the AMPI leaders were Demo-
crats, and the dairy co-ops had given extensive financial and other
support of over $150,000 to Vice President Humphrey in his 1968
campaign. 25 Parr testified: “We didn’t know anybody in Nixon’s ad-
ministration ... We didn’t have any rapport wi th the Nixon admin-
istration.” 26
Nelson indicated what proved to be at the heart of their problem.
Although, in a civil deposition, Nelson stated that he did not, recall
ever having any great difficulty in gaining access to elected officials, 27
in his testimony before the Select Committee on December 18, 19i3,
Nelson was asked if this was true for the Nixon administration in 1969 :
Mr. Weitz. Would you care to say that that did not apply
to the administration in 1969 ?
Mr. Nelson. That is right. It did. not apply.
Mr. Weitz. It did not apply ?
Mr. Nelson. It did not apply . 28
The first step to gain access to the new administration and achieve
certain specific co-op goals was apparently a $100,000 cash contribu-
tion delivered to Herbert Kalmbach, the President’s personal lawyer
and chief fundraiser. This matter, including the method in which the
contribution was ultimately generated from AMPI corporate funds
through an elaborate and expensive laundering scheme, is discussed
in the following sections.
A. AMPI Contacts With Administration Officials and
Kalmbach Prior to the Contribution
1. JOHN MITCHELL, J ACK GLEASON AND REFERRAL TO HERBERT
KALMBACH
Nelson turned to Jacobsen for an entree to the new administration.
At that time, Jacobsen was a member of two law firms, Jacobsen and
Long in Austin, Tex. (which was already on retainer to MPI for
$2,500 per month), and Semer and Jacobsen 20 in Washington. Jacob-
sen reported to Nelson that his Washington partner, Milton Semer,
had previously had contact with John Mitchell and might be able to
pro vide assist ance.
23 See Report of Wright. Lindsey and Jennings to Board of Directors of Associated Milk
Producers. Inc., March 13. 1974 (hereafter “Wright Report”)* The Report was commis-
sioned in 1973 by the AMPI Board, after AMPI came under investigation by Watergate
investigators, and was furnished to the Board on March 13, 1974.
26 Parr, 15 Hearings 6758— 59. ^ „
27 See deposition of Harold S. Nelson, Nader v. Buts, at 4, February 7, 1973.
28 Nelson, 15 Hearings 6*523-24.
29 The firm later become Semer, White, and Jacobsen.
588
On or about March 21, 1969, Parr and probably Nelson met with
Jacobsen and Seiner in the Washington office to discuss the problem.
At about that time, the Semer and Jacobsen firm was also placed on
a $2,500 per month retainer to MPI.
There is a dispute in the testimony whether or not Semer contacted
John Mitchell in 1969 for AMPI and whether Mitchell then referred
Semer to Kalmbach. Both Semer 30 and Mitchell 31 have advised the
committee that they recall no such contact. However, several witnesses
state that Semer had said at the time that he had contacted, or
intended to contact, Mitchell for the milk producers in 1969. Kalmbach
said that Semer had told him that he had been referred by Mitchell,
and, following the first meeting, Kalmbach called Mitchell to verify
Semer’s account. 32 In addition, Nelson testified that he learned from
Jacobsen that Semer had contacted Mitchell who referred him to
Kalmbach. 33 Jacobsen, too, in his testimony in an earlier deposition
in a civil suit, had testified that Semer told him that he had been
referred to Kalmbach by Mitchell. After conferring with Semer
recently, however, Jacobsen, in testimony before the Select Committee
on December 11, 1973, stated that he does not believe that Semer told
him that he had been referred by Mitchell. 34
Semer has conceded to the committee that at his first meeting with
the AMPI representatives in March 1969 (and in his first meeting,
described below, in April, with Kalmbach) , he explained his previous
contacts with Mitchell and Maurice Stans in 1968 and earlier, 35 but
testified that he does not think he mentioned going to Mitchell to
establish contact with the administration for AMPI. Instead, he indi-
cated that he was going to contact Jack Gleason, who was then an
assistant to Stans at the Commerce Department, 36 and who became a
White House staff assistant to Harry Dent later in 1969.
Whatever Mitchell’s involvement in this effort, it is undisputed that
Semer did contact Gleason on or about March 25, 1969. Semer told
Gleason of his client’s dilemma and informed him of AMPI’s politi-
cal fund. According to Semer, Gleason expressed great interest at
that meeting (and in contacts with him in the subsequent months) in
the fund and its “potential” and referred him to Kalmbach. 37 As
discussed below, Kalmbach learned of Semer and a possible $100,000
contribution apparently on the same day Semer spoke to Gleason,
March 25, 1969. In an interview with the Select Committee staff, Glea-
son described his role as one of “massaging fat cats” and, while he
does not remember meeting with Semer in 1969 about this matter, he
said he would have referred all potential Presidential contributors to
Kalmbach.
Semer denied having discussed a specific contribution with Gleason
during their contacts in early 1969. However, in view of Gleason’s
30 Semer, 16 Hearings 7189. Semer gave his account of his contacts with Kalmbach,
Gleason and others to the Select. Committee in November, 1973 and again on February 5,
1974.
81 Mitchell Interview, January 14, 1974.
32 Kalmbach. 17 Hearings 7578, 7582.
33 Nelson. 15 Hearings 6511.
34 Jacobsen, 15 Hearings 6386-87.
33 Semer, while General Counsel for the Department of Housing and Urban Development
from 1961 to 1965, knew Mitchell who was a member of an advisory committee to the
General Counsel (Semer, 16 Hearings 7189). Semer also had contacted Mitchell, Maurice
Stans, and an assistant to Stans, Jack Gleason, in 1968 in connection with arranging for a
contribution by another client to the 1968 Nixon campaign.
38 Semer, 16 Hearings 7190.
37 Semer, 16 Hearings 7190-91.
589
interest in AMPI’s “potential,” and his sending Semer to Kalmbach, it
seems that Gleason at the very least believed that the efforts of AMPI
to gain access to the Republican administration would involve a con-
tribution. That is exactly what happened as a result of the subsequent
contacts between Seiner and Kalmbach.
2. CONTACTS WITH KALMBACH $100,000 IN CASH
Semer testified that he found Gleason’s referral of him to Kalmbach
understandable ; he explained that in previous administrations there
had often been lawyers outside the Government who served in advisory
capacities to the President. Semer believed that Kalmbach was such a
Presidential advisor who could provide him with an understanding of
the organizational structure of the Nixon White House. 38
Whatever Seiner’s perception, Kalmbach at that time was serving in
an important financial role for the White House in 1969. Kalmbach
testified that on or about January 14, 1969, Stans asked Kalmbach to
serve as trustee for the surplus funds from the 1968 Presidential cam-
paign. 39 Kalmbach agreed. He understood that he was to act under the
direction of Haldeman, to whom he reported on his activities in con-
nection with the fund. Haldeman did not dispute that Kalmbach re-
ported to him, although he noted that Kalmbach received instructions
from others, too, with respect to the fund. 40
Semer met with Kalmbach in Washington in early April and again
in early May. 41 Semer testified that in each instance he described his
client’s “potential” for making political contributions to both parties
and at all levels, including the President, although he claims there was
no discussion at that time of a specific contribution to the President. 42
He testified that Kalmbach was always interested in that “potential” —
which Semer described as $1 million per year — and that the “technique
of political contributions was constantly discussed right from the
start.” 43
Other evidence gathered by the Select Committee indicates, how-
ever, that at least at one of these meetings (and perhaps both) a
specific contribution was in fact discussed. Semer testified that he
regularly reported the results of his Kalmbach meetings to the client
and Jacobsen, 44 and both Nelson and Jacobsen testified that in those
reports they were advised that Kalmbach requested a contribution
of $100,000 in cash.
According to Nelson, Semer reported back from Kalmbach that:
“[I]f we want to go forward with the relationship, that we should
deliver $100,000 in cash.” 45 Jacobsen recalled that he was told by
Semer that, at the second meeting, Kalmbach suggested a cash con-
tribution of $100, 000. 46
Probably the most persuasive evidence that a specific contribution
was discussed at the outset was provided to the Select Committee by
38 Semer, 16 Hearings 7191.
39 Kalmbach, 17 Hearings 7577-78. Kalmbach administered the fund until 1972 when he
transferred the proceeds to Hugh Sloan for the President’s re-election campaign. A review of
Kalmbach’s administration of this fund is provided in another section of the Select
Committee’s report. See Chapter XV.
40 Haldeman, 16 Hearings 7158.
41 Semer. 16 Hearings 7191. According to Semer’s logs, they met on April 3, 1969 and
May 7, 1969.
42 Semer, 16 Hearings 7191-92.
43 Semer, 16 Hearings 7192, 7198.
44 Semer, 16 Hearings 7194.
43 Nelson. 15 Hearings 6514.
46 Jacobsen, 15 Hearings 6387-88.
590
Kalmbach on March 22, 1974, following his guilty plea to two Federal
violations. Kalmbach testified that Semer explained that they had
supported Senator Humphrey’s candidacy in 1968 and now “they were
without friends in the administration and this was the reason they
wanted to make a contribution.” 47
Kalmbach testified that at either the first meeting in April or some-
time later, Semer indicated the contribution would be $100,000. Ac-
cording to Kalmbach, Semer told him that, in fact, their goal was a
total of $250,000 by the end of the year. 48
The account that the $100,000 was discussed “right from the start”
is corroborated by Kalmbach’s contemporaneous entries in his logs. 49
On March 25, 1969 — the day Semer first contacted Gleason for the
milk producers — there is the following entry : “M. H. Stans. Seamer
[sic] $100,000.” 50
On April 2, 1969, the day before Semer met with him, Kalmbach
wrote in his logs : “Milton Seamer [sic] — Atty in Wash., D.C. $100,000
Milk Producers Assn.” 51
The suggestion that an additional $150,000 would be contributed
by the end of the year for a total of $250,000 is also supported by Kalm-
bach’s log entries. In June and July, 1969, there are several references,
in connection with Semer, to “100-250” including the following entry
for the week of June 30 : “MHS Semer 100-250 12/31.” 52
After a number of telephone calls with Kalmbach in June and July,
Semer, on July 10, 1969, flew to California and met Kalmbach in his
Newport Beach office. Semer acknowledged that in the course of their
telephone conversations and the July 10 meeting, he gained no further
information on the White House organization and possible contacts
for AMPI. 53
The only matter on which progress was made was that of a con-
tribution. On July 9, the day preceding his meeting with Kalmbach,
Semer stopped at the Executive Inn Hotel in Dallas and met with
Nelson, Parr and Jacobsen. Semer conceded that they discussed the
fact that nothing had resulted from the previous contacts with Kalm-
bach and that there may have been a discussion of making a con-
tribution. 54
Parr was more direct ; he testified that Semer related that Kalmbach
had already asked for $100,000 in cash and that at the July 9 meet-
ing there was a discussion of obtaining and delivering the money. 55
In fact, there was some suggestion that all four of them would meet
with Kalmbach. 56 However, it was decided that Semer would go alone,
since, according to Semer, Kalmbach preferred dealing with just him
and not a group. 57
At the July 10 meeting, which essentially reviewed previously dis-
cussed matters, Kalmbach reiterated the administration’s receptive-
47 Kalmbach, IT Hearings 7578.
48 Kalmbach, 17 Hearings 7581.
49 Kalmbach, who had not referred to such matters in civil depositions previously taken,
testified before the Select Committee on March 22, 1974, that his memory had been
refreshed by reviewing his contemporaneous notes from the 1969-1970 period, which he
produced to the Committee and other investigating authorities. See Kalmbach, 17 Hearings
7588.
60 Kalmbach affidavit, attachment A, 17 Hearings 7946.
51 Kalmbach affidavit, attachment. B, 17 Hearings 7947.
62 Kalmbach affidavit, attachment E, 17 Hearings 7950.
63 Semer, 16 Hearings 7194.
64 Semer, 16 Hearings 7195-96.
55 Parr, 15 Hearings 6761.
50 Parr, 15 Hearings 6762 ; Semer, 16 Hearings 7195.
67 Semer, 16 Hearings 7195.
591
ness to a contribution. 58 As to the question whether the contribution
would be reported, Semer’s and Kalmbach’s recollections differ; Se-
iner recalls a discussion of reporting requirements 59 while Kalmbach
says there was none — not then and not in any of the conversations
between the two. 60
In any event, it must have become increasingly clear to Semer — if
not on or before July 10, then shortly thereafter — that, Kalmbach had
no plans to report the cash contribution. Jacobsen and Nelson both
testified that they were told Kalmbach did not want the contribu-
tion reported. 61 Semer himself testified that Kalmbach “on more than
one occasion expressed a preference for cash,” 62 and that this so
disturbed him that he called Kalmbach between July 10 and the
delivery to ask if Kalmbach would accept the contribution in checks ;
again Kalmbach expressed a preference for cash. 63
Kalmbach disputes the evidence that he requested that the contribu-
tion be in cash. On the contrary, he testified that Semer told him it
would be made in cash. 64 However, Kalmbach admitted that no com-
mittees were yet in existence which could have him listed as receiving
the contribution so as to avoid violating the prohibition in the Corrupt
Practices Act against making a contribution in excess of $5,000 to any
one candidate or political committee. 65
As discussed in chapter 4 of the committee’s report on campaign
financing, the Select Committee found repeated instances in which
Kalmbach and other Presidential fundraisers received cash from con-
tributors to keep their fundraising efforts secret. Furthermore, as
explained in chapter 4, the 1968 surplus funds transferred to Kalm-
bach’s control were in two forms — several checking accounts and
cash in several safe deposit boxes. Kalmbach testified that Haldeman
had made clear to him that he should maintain the original nature
of the funds as much as possible — that is, try to maintain the original
balance in the cash and the checking account. However, in 1969 Kalm-
bach was already disbursing substantial amounts from the cash fund. 66
Therefore, in order to follow Haldeman’s instructions, Kalmbach
would have had to seek cash to replenish the fund.
As explained below the AMPI contribution was added to that fund.
3. PURPOSE OP THE CONTRIBUTION AMPl’s THREE “OBJECTIVES”
The Select Committee has obtained evidence that the purpose of
the $100,000 cash contribution was not merely to gain “access” to the
Nixon "White House, but also to lay the groundwork for favorable
treatment in certain specified ways by the administration for AMPI
and the dairy industry.
As noted above, the AMPI leadership understood that the con-
tribution was being suggested by Kalmbach as a first step to making
contact with the White House. Notwithstanding Semer’s insistence
that there was no direct connection between the contribution and
58 Semer Exhibit 1, 16 Hearings 7220.
69 Seiner, 16 Hearings 7197.
60 Kalmbach. 17 H earings 7581.
61 Jacobsen, 15 Hearings 6388-89 ; Nelson, 15 Hearings 6517.
02 Semer, 16 Hearings 7197.
03 Semer, 16 Hearings 7197-98.
04 Kalmbach, 17 Hearings 7579.
« Ibid.
00 Ibid.
35-687 O - 74 - 39
592
“access,” other evidence gathered by the Select Committee points the
other way.
In his testimony, Kalmbach was quite explicit. Although denying
he initiated the idea, Kalmbach did testify that he understood before
the contribution was made that in exchange for the contribution,
Semer and his clients would be granted the opportunity to meet with
White House officials. 67
According to Kalmbach, that was not all AMPI sought. He testi-
fied that AMPI, through Semer, made clear that in connection with
the contributions of up to $250,000 in 1969, it had three “objectives”
in mind and that Semer stated these to him both before and at the
time of the delivery of the $100,000.
Kalmbach wrote in his logs on August 2, 1969, the day he received
the $100,000 from Semer :
(a) 90 percent price supports for dairy farmers.
(h) President to address gathering in Kansas City, Mo.
(A meeting of dairy farmers’ cooperatives organized by Milk
Producers, Inc. (open date).)
( c ) Identification with the President — picturetaking, et
cetera. 68
At another point in his logs, for The week of June 10, 1969, also in
connection with the milk producers, Kalmbach had written the follow-
ing entry :
1. 90 percent of parity.
2. W.H. audience.
3. Farm speeches, visible identification. 69
And at still a third place in his logs, on June 13, 1969, he wrote: 70
“MHS objectives, Semer — 100-250.”
Kalmbach, in turn, informed top White House officials of these
matters. He testified that after the contribution was discussed but
before its delivery, he reported to Haldeman the pending contribution
and the three goals, and Haldeman authorized him to accept the con-
tribution. 71 Kalmbach’s logs indicate that he apparently discussed the
contribution and the milk producer objectives with Stans, too. 72 After
the receipt of the contribution, Kalmbach reported that fact and reiter-
ated the three goals to Haldeman. 73 Haldeman stated to the Select
Committee staff on January 31, 1974 :
I don’t recall that . . . That is something I may or may not
have known at the time . . . Kalmbach reported some things to
me, he generally kept me informed on what he was doing. 74
Kalmbach’s testimony that he reported the contribution and AMPI’s
interests to others in the White House and the administration, includ-
87 Kalmbach, 17 Hearings 7584 ; Semer, 16 Hearings 7207. Semer, when questioned in
executive session of the Select Committee, stated that he “would be very much surprised” if
Kalmbach “a very sophisticated attorney” would conclude that the contribution was related
to meeting with White House officials. Ibid.
68 Kalmbach affidavit, attachment G, 17 Hearings 7952.
Kalmbach affidavit, attachment C, 17 Hearings 7948. There are several additional
abbreviated words after item No. 1 ending with “S4%,” apparently referring to the then-
existing milk price support parity level.
70 Kalmbach affidavit, attachment D, 17 Hearings 7949.
71 Kalmbach, 17 Hearings 7582.
72 See Kalmbach affidavit, attachment D, 17 Hearings 7949.
73 Kalmbach, 17 Hearings 7582.
74 Haldeman, 16 Hearings 7155.
593
ing Ehrlichman, Peter Flanigan (who had some responsibility in the
area of dairy matters), Gleason, and Dent, is corroborated by other
evidence obtained by the Select Committee. 75 Kalmbacb’s logs reflect
notes of conversations with Ehrlichman and Stans about the milk pro-
ducers, tileir contribution and their objectives, and Ehrlichman told
the committee staff on February 8, 1974 (even before Kalmbach testi-
fied on such matters) that Kalmbach did in fact tell him of his contact
with Semer and of the contribution. 76
With respect to the substance of his communications on this matter
to White, House officials, Kalmbach testified :
I never at any time indicated to Mr. Haldeman, as I remem-
ber it, that the quid fro quo for the receipt of this contribution
would be the attainment of the three stated objectives.
Mr. Sanders. Did Mr. Haldeman ever give you any under-
standing that their objectives would be met ?
Mr. Kalmbach. No, he did not.
Mr. Sanders. Did Mr. Ehrlichman ever give you any under-
standing in advance of the Semer delivery that the objectives
would be met?
Mr. Kalmbach. No, other than Mr. Haldeman indicated
to me it would be — that the objective of Mr. Semer meeting
with various people within the White House would be met.
Mr. Sanders. But not that their ultimate objectives would
be.
Mr. Kalmbach. That is correct.
Mr. Sanders. Did any White House official give you an
understanding that their ultimate objectives would be met?
Mr. Kalmbach. No, sir. 77
However, Kalmbach did say there was an understanding with Semer
and White House officials that a benefit would accrue to the milk pro-
ducers in exchange for the contribution :
[I]n return for that contribution it would be possible for
me to arrange for several appointments with various people
within the "White House in order for Mr. Semer and the at-
torneys for the milk producers to meet with the White House
officials to present a case on their behalf. 78
Having reached an understanding, the milk producers next prepared
to deliver the money.
B. The Contribution : Preparation and Delivery
The $100,000 in cash was assembled by the milk producers in late
July 1969. On August 1, Bob Lilly delivered it to Semer and the next,
day, August 2, Semer delivered it to Kalmbach. Under the direction of
White House aides, Kalmbach used the money in part to fund the
73 Kalmbach, 17 Hearings 7583.
76 Ehrlichman, 16 Hearings 7373-74. Ehrlichman also said that Kalmbach informed him
that Semer was seeking a quid pro quo and that Ehrlichman told Kalmbach to terminate the
relationship. Ehrlichman, 16 Hearings 7374. Ehrlichman did not remember when this dis-
cussion occurred, although he believed it was in 1969. However, Kalm bach’s testimony,
together with other corroborative evidence, places the time of that discussion (and the
question of a quid pro quo) in 1972. It will be treated at greater length in connection with
Section VI dealing with the activities of the dairy co-ops in 1972.
77 Kalmbach, 17 Hearings 7811-12.
78 Kalmbach, 17 Hearings 7811.
594
undercover activities of Anthony Ulasewicz and the Democratic pri-
mary challenge to George Wallace in 1970. 79 As a result of the contri-
bution, dairy co-op leaders were then introduced to certain White
House officials.
At the time of the contribution, MPI and TAPE maintained sizable
accounts at the Citizen’s National Bank of Austin, of which Jacobsen
was chairman of the board. In an affidavit submitted to the Select
Committee, 80 Marvin Stetler, who was at that time president of the
bank, affirmed that in late July 1969, Jacobsen informed him that
$100,000 in cash was to be withdrawn from the TAPE account and
made available by a certain date, which proved to be August 1, 1969.
Jacobsen told him that the authorization for the withdrawal was to
be a debit memo and that Lilly was to receive the money.
Stetler states that he told Jacobsen that it would take several days
to accumulate that much currency. As recalled by Lilly, Stetler told
Lilly that he was assembling old bills. 81
Bob Lilly provided the committee with the details of the trans-
actions. 82 He says that on August 1, he went to Citizen’s National Bank
to receive the money. Stetler gave him the previously prepared debit
memo, Lilly signed it and Stetler gave him the money. According to
Lilly, Stetler first counted it ; Stetler says Lilly began to count it but
was in such a hurry that he merely raked the money into an empty case
and left.
The debit memo Lilly signed reads as follows : “Receipt of $100,000
cash acknowledged this 1st day of August, 1969 per instructions of Bob
Isham.” 83
After receiving the money, Lilly went to Dallas, and, in Semer’s
room in -the Executive Inn, delivered the money to him. Semer says he
had not previously known the actual amount to be contributed and
was surprised by the magnitude. 84 After Lilly left, Semer bought a
new flight bag to replace the attache case Lilly had used and placed
the money in it.
On Saturday, August 2, 1969, Semer again flew to California and
delivered the $100,000 to Kalmbach in his Newport Beach office. Kalm-
bach counted the money and, on the following Monday, August 4,
placed it in the safe deposit box in the Security Pacific National Bank,
Newport Center Branch, which he had opened in July for some of the
1968 surplus funds. 85
^Kalmbach, 17 Hearings 7580-81 ; depositions of Herbert W. Kalmbach, Common Cause
v. Finance Committee to Re-Elect the President f pp. 72-73 (December 12, 1973) and pp 4,
36-37 (December 13, 1973).
80 17 Hearings 7994-8000.
81 Lilly, 14 Hearings 5918.
83 Apparently, Lilly’s first contact with milk fund investigators was with the Select Com-
mittee staff in October, 1973. A hearsay account of Lilly’s role had previously been given to
the committee by Joseph Rose, a former AMPI attorney in 1973, who testified before the
committee in early October. Staff investigators had learned of Rose through another
attorney then representing non-AMPI farmers.
Subsequently, in informal staff interviews and executive session testimony principally in
October and November, Lilly provided an account — later corroborated — of a number of
Important matters uncovered by the staff investigation and discussed in this report, includ-
es the delivery of the $100,000 and the corporate payback scheme of that money, secret
efforts in 1971 to secure a price support increase, commitments of large contributions to
the Presidents campaign, and, in 1972, additional contributions in part to honor the previ-
suit commitmen * s an( * in P ar ^ t0 Sain favorable treatment in a Justice Department antitrust
83 Lilly Exhibit 1, 14 Hearings 5990. Based on an interview with Isham and the testimony
of Jacobsen 15 Hearings 6389, it appears that Nelson and Jacobsen acted without consult-
ing Isham, the sole trustee for TAPE.
84 Semer. 16 Hearings 7200, 7202-03.
85 Kalmbach, 17 Hearings 7582-83.
595
0. Disposition op the Contribution and Subsequent AMPI -White
House Contacts in 1969
1. DISPOSITION OP THE CONTRIBUTION
Neither Nelson nor Parr expressed to the Select Committee any
knowledge of, or for that matter, interest in what was done with the
$100,000 contribution. Semer says that he felt certain that the money
was going to congressional candidates in the 1970 election. Although
before the delivery of the money, Semer and Kalmbach discussed the
practice in prior administrations of “piggyback” contributions — con-
tributions solicited by the White House for congressional candidates —
there apparently was no discussion of the use of the contribution. 86
And it remains undisputed that no Republican congressional fund-
raising committee names were provided to Semer or anyone else con-
nected with AMPI at the time of the delivery or anytime thereafter in
1969.
In fact, the money was, according to Kalmbach, commingled with
the 1968 surplus funds, which eventually went to Sloan in 1972 for the
President’s reelection campaign. 87 Ehrlichman essentially confirmed
this. 88 In the meantime, part of the money was expended for such
unusual campaign purposes as the political investigative work of
Anthony Ulasewicz, detailed elsewhere in the committee’s report, and
the support of the candidacy of Alabama Governor Brewer in a 1970
State primary against George Wallace. 89
2. CONTACTS BET WREN AMPI AND WHITE HOUSE OFFICIALS IN 1969 AFTER
THE CONTRIBUTION
The contribution was made in connection with AMPI’s three goals,
including “access” to the White House. Whereas Semer had been in
contact with Kalmbach for approximately 4 months before the con-
tribution was made without apparent results, thereafter it only took
several days to arrange the first of a series of AMPI-White House
meetings. Kalmbach testified :
[I]t was clear in my mind that as a result of this con-
tribution * * * or further contributions by Mr. Semer and
his clients, that meetings would be arranged for Mr. Semer
and his clients to meet with certain people within the White
House to put forth his case on behalf of his clients."
In fact, in the same August 2 diary entry referring to the milk pro-
ducers’ objectives, Kalmbach also noted “Milt and clients to meet with
Harry Dent and Jack Gleason.” 91
On August 19, 1969, Nelson, Parr, and Semer met with Harry Dent
in his White House office. Semer testified that the purpose of the meet-
ing was twofold : to have the AMPI leadership get acquainted with
Dent and to invite the President to attend the annual meeting of the
Associated Dairymen, an association of the three dairy co-ops (AMPI,
80 Semer, 16 Hearings 7192.
87 Kalmbach, 17 Hearings 7580.
88 Ehrlichman, 16 Hearings 7378.
89 Kalmbach, 17 Hearings 7580-81 ; Kalmbach Depositions, supra, Common Cause v
Finance Committee to Re-Elect the President.
90 Kalmbach, 17 Hearings 7584.
01 Kalmbach affidavit, attachment G, 17 Hearings 7952.
596
DI, and Mid- Am) of which Nelson was manager.' 2 At the August 19
meeting, they presented a written memorandum to Dent elaborating
on the invitation. 93 Parr testified that they felt that the attendance of
the President at that annual meeting and at an A MPT convention
would increase the stature of dairy leaders — particularly the then cur-
rent leadership of Nelson and Parr. 94 In a staff interview, Dent stated
that he had no recollection of the meeting and that if such a meeting oc-
curred it would have been a routine “massage” session.®
Kalmbach testified that he talked to Semer three or four times after
August and perhaps contacted the White House to arrange Semer’s
subsequent meetings with White House officials. Kalmbach testified :
“I feel relatively certain that anyone who he met with, it was probably
the result of my making calls to arrange such meetings.” 96
Kalmbach said there was no prior understanding of any favorable
action that would necessarily result from such contacts. However, he
testified that the top administration officials were all made aware
that Semer represented a contributor. 97
No more money was delivered to Kalmbach by AMPI in 1969.
Kalmbach testified that he thinks the remaining $150,000 was not
forthcoming because of the dairy people’s dismay at not meeting with
more White House officials. Kalmbach says Semer told him that the
“response wasn’t really what we had hoped for.” 98
The following year, the milk producers stepped up their lobbying
efforts — and communicated their intention to raise the level of con-
tributions to “$1 million, $2 million, or even more.” 99
D. Corporate Funding op the $100,000 Contribution
Sometime before the end of 1969, the milk producers instituted an
elaborate scheme to conceal the $100,000 contribution delivered to
Kalmbach. The scheme, developed by top AMPI employees, involved
funneling several hundred thousand dollars through a number of
lawyers and consultants retained by AMPI and using the laundered
money to replenish the TAPE account from which the $100,000 was
originally withdrawn. As a result, TAPE never reported the contri-
bution, and Kalmbach and White House aides were free to use the
contribution without any public disclosure of its source or public
accounting for its disposition.
1. nelson-isham-pierson meeting
W. DeVier Pierson, a former White House aide in the Johnson
administration and a Washington attorney whose firm was retained
by AMPI beginning in early 1969, advised the AMPI leaders some-
92 Semer, 16 Hearings 7207.
93 Parr Exhibit 2, 15 Hearings 6907.
04 Parr, 15 Hearings 6800 ; see Semer, 16 Hearings 7209.
95 Semer also received increased attention regarding the dairy co-op from Gleason. Semer,
16 Hearings 7208 ; Semer Exhibits 2 and 3, 16 Hearings 7224, 7225.
98 Kalmbach, 17 Hearings 7585.
97 Kalmbach, 17 Hearings 7584-85. Kalmbach added that, in the case of at least Mitchell.
Haldeman and Stans, they knew Semer’s client had contributed that year. Kalmbach, 17
Hearings 7585. In a staff interview, Mitchell said that at some point Kalmbach told him
that he was receiving contributions from “milk producers," but he said that this informa-
tion made no impression on him and he could not recall the date. As is indicated below, this
represented only the beginning of what the Select Committee has found to be a continuing
involvement through 1972 by Mitchell and Haldeman in solicitations of and contributions
by the dairy trusts to the President’s re-election campaign.
98 Kalmbach, 17 Hearings 7585.
09 Nelson, 15 Hearings 6536.
597
time in the fall of that year that TAPE was required to make public
reports to the Clerk of the House of its contributions to candidates
for Federal office. According to Pierson, the AMPI people informed
him that he was “the only lawyer who has ever told us we have to
report.” 1
AMPI officials realized in late 1969 that they had a problem ; since
the. $100, 000 contribution exceeded the legal limitation of $5,000 to
any one candidate or committee, they could not report it in the form it
was made without admitting a violation of the Corrupt Practices Act. 2
Ivalmbach did not give them any committee names to permit lawful
reporting, apparently because, according to Nelson and Jacobsen,
he didn’t want the contribution reported at all. 3 Since the contribu-
tion could not be reported lawfully or recovered from Ivalmbach, 4
AMPI officials decided to engage in a coverup of the illegal contribu-
tion.
On December 8, 1969, Pierson flew to San Antonio and met that
night with Nelson and Isham in Nelson’s office. Pierson says that,
although he was not told of the specifics, he understood from Nelson
that TAPE had a reporting problem with respect to some contribu-
tion that either had already been made or was committed and was
going to be made, presumably prior to the end of the year. It was
decided that if it were possible to reimburse TAPE for the amount
of the contribution before the end of the year, TAPE would not have
to report the payment to Kalmbach. At the meeting, Nelson reportedly
concluded :
1 believe we ought to be able to call on friends of AMPI
to help defray the obligation. 5
Pierson says that Nelson then listed a number of attorneys and con-
sultants, some of whom Pierson knew, as the friends who would be
expected to participate.
According to notes taken by Isham at the meeting, the $100,000
was to be recouped in amounts of $10,000 each from the following
eight attorneys and consultants then retained by AMPI: Pierson,
Joe Long, Frank Masters, Stuart Russell, James Jones, Richard
Maguire, Clifford Carter and Ted Van Dyk. In addition, four AMPI
employees, Lilly, Parr, J. G. Anderson and Leo Suttle, were each to
give $5,000, for a total from all 12 of $100,000.®
The 12 were to recoup the money from AMPI in the following man-
ner : The eight outside conduits were each to bill AMPI $20,000 to cover
the $10,000 payment plus their excess income taxes incurred because
of the billing; the four employees were each to receive the $5,000 in
the form of an expense advance from AMPI. Thus, the scheme would
have cost AMPI approximately $180,000. Pierson himself agreed to
make a contribution and to contact Maguire and Van Dyk, and AMPI
people were to contact the others. Ultimately, the four employees did
1 Pierson Interview, November 21, 1973.
2 The applicable provision prohibited a contribution of more than $5,000 in any one
year to any one candidate or political committee. This limit was removed by the Federal
Election Campaign Act of 1971, which became effective on April 7, 1972.
3 See section II. A. 2., supra.
4 See section H.D.2., infra, and Isham Interview, November 9 and 10, 1973.
5 Pierson Interview, supra.
0 See Lilly Exhibit 2, 14 Hearings 5991. A ninth individual, who was an associate at that
time with the firm of Jacobsen and Long, was also included in the list of attorneys and
consultants with two question marks beside his name. Apparently, he did not participate in
the payback scheme.
598
not participate and, instead, as explained in detail below, the money
was paid back by the outside lawyers and consultants only, most of
whom, it should be noted, claim ignorance of the scheme.
The plan as formulated and executed involved the diversion of
corporate funds for political purposes. Nelson does not specifically
recall meeting with Pierson, but states that he authorized the plan
and takes full responsibility for it. 7
In the days following the meeting between Nelson, Pierson, and
Isham, the AMPI officials began to implement their plan.
2. $100,000 LOAN TO LILLY
Time was of the essence. Since TAPE was scheduled to file a report
with the Clerk of the House covering the calendar year of 1969, TAPE
had to be repaid the $100,000 by the end of the year. However, Pier-
son says that he told Nelson and Isham at their meeting that each con-
duit was permitted, under the $5,000-a-year contribution limitation, to
contribute to TAPE for the contribution in question only $5,000 in
1969 and a second $5,000 the following calendar year. However, this
would have resulted in reimbursing TAPE only half the $100,000 by
the end of the year. Therefore, it was decided at the December 8 meet-
ing or within a day or two thereafter that AMPI employee, Bob Lilly,
would borrow the entire $100,000 and repay TAPE before December
31, 1969, and that Lilly would then be repaid by the conduits over a
period of time stretching into the 1970 calendar year.
When Lilly was told of the plan, he protested to Nelson so vigorously
that he almost lost his job. He suggested that AMPI could get the
money back and recontribute it to 20 State Republican committees—
and thus comply with the $5,000 limitation— without the use of a con-
duit scheme. According to Lilly, Nelson ruled out that alternative
by telling him that the White House did not trust the regular Repub-
lican Party structure to transfer the money to Kalmbach. 8 Lilly finally
agreed to participate in the plan and borrow the money.
On December 17, 1969, Lilly completed a loan application and bor-
rowed $100,000 from Citizens National Bank in Austin, executing a
60-day note at an interest rate of 8% percent, 9 Jacobsen, who was chair-
man of the board, and two other members of the bank’s loan discount
committee, Morgan E. Pierce and Walter Donald Roberts, approved
the loan. 10 The loan was secured by a $100,000 certificate of deposit
of AMPI and pledged by Lilly who signed a security agreement on
the 17th. 11 Stetler, the bank president, says he does' not remember
whether Lilly had the authority to use co-op funds to secure a personal
loan to himself ; 12 in fact, there is no evidence that any such authority
existed.
Lilly deposited the proceeds of the loan into the TAPE account on
the same day. 13 However, to replace the apparently defective pledge
by Lilly of a corporate certificate of deposit, Isham, in his capacity
as T APE trustee, wrote a TAPE check, dated December 19, 14 to the
7 Nelson, 15 Hearings 6526, 6527, 6689. „
8 Lilly, 14 Hearings 6135. Isham said in a staff interview before Lilly testified that he
made a similar suggestion to Nelson, who told him that was impossible.
» See Jacobsen Exhibit 2. 15 Hearings 6481 : Lilly Exhibit 3. 14 Hearings 5992-94.
*> See Jacobsen Exhibit 2. 15 Hearings 6481 ; Jacobsen. 15 Hearings 6392
11 See Lilly Exhibit 4. 14 Hearings 5995-96. The CD was registered in the name of Milk
Producers, Inc. — apparently issued to AMPI’s predecessor sever.al months previously, before
the formation of AMPI.
12 Stetler affidavit. 17 Hearings 7996.
13 See Stetler affidavit, exhibit E, 17 Hearings 7998.
14 See Stetler affidavit, exhibit F, 17 Hearings 7999.
599
bank to purchase a $100,000 certificate of deposit for TAPE, and then,
in a second security agreement (apparently backdated to December
17), 15 pledged that TAPE certificate of deposit (in lieu of that of
AMPI) to secure the loan to Lilly. Thus the transaction had gone
full circle : Lilly had borrowed $100,000 and had repaid TAPE, which
in turn had used the money to pledge a $100,000 certificate of deposit
to secure the loan to Lilly. Since TAPE did not report the pledge of
the certificate of deposit as of December 31, 1969, the contribution to
Kalmbach had been concealed.
Whereas the note was supposed to be paid in 60 days, it was not paid
in full until nearly a year later ; in fact, the coverup of this and other
corporate transactions and payments from AMPI to the conduits con-
tinued at least into 1972.
3. THE ALLEGED CONDUITS
Based on his records submitted to the Select Committee, 16 Lilly testi-
fied that he received the money to repay the $100,000 principal plus
interest on his loan from outside attorneys and consultants named in
the meeting of Nelson, Isham, and Pierson. Although each of the
alleged conduits interviewed denied having knowingly participated in
the plan to divert corporate funds for political purposes, there is evi-
dence that at least some did so. Lilly testified : “I felt that they knew
that they could be reimbursed. It was quite obvious, because bills were
coming in.” 17 In addition, there is evidence that the AMPI board of
directors was informed of the conduit scheme and the diversion of
hundreds of thousands of dollars of corporate funds to cover the
$100,000 contribution to Kalmbach and subsequent political contribu-
tions.
According to Nelson and Lilly, the AMPI board was told, at more
than one board meeting, that legal fees were high because some of the
fees went to reimburse some attorneys for political contributions. 18
Nelson believes that Stuart Russell and another alleged conduit, Frank
Masters, as well as John Butterbrodt, president of the board, were
present at those meetings. 19 Although Masters and Butterbrodt deny
it, Russell, himself one of the conduits, confirms Nelson’s account. 20
The following is a description of the participation in the payback
plan of each of the alleged conduits.
a. Stuart Russell
Stuart Russell, a lawyer in Oklahoma City who has represented
dairy cooperatives for many years, was retained by MPI in 1967 and
then by AMPI in 1969 at a retainer of $1,000 per month plus an hourly
15 See Lilly Exhibit 5, 14 Hearings 5997-98.
10 See Lilly Exhibit 6, 14 Hearings 5999-6001.
17 Lilly, 14 Hearings 5968.
18 Nelson, 15 Hearings 6529 ; Lilly, 14 Hearings 5973.
19 Masters, an attorney for AMPI who attended nearly all its Board meetings and helped
prepare the minutes, denied that such discussions took place. See Masters, 16 Hearings 6939,
6955-56 : and Section II.D.Sf., infra. One of the meetings at which the matter was allegedly
discussed was the meeting in Las Vegas, held in December 1970, which the Board minutes
indicated Butterbrodt attended. Kieffer Howard, an AMPI employee, says that he attended
the meeting and that at least the matter of high attorneys’ fees •was discussed. Furthermore,
he says that he believed that the money going to Lilly was used for political contributions.
Howard Interview. November 29. 1973.
20 See Masters. 16 Hearings 6955-56 : Butterbrodt, 17 Hearings 7628. Russell Interview,
November 8. 1973. Parr testified that it was common knowledge at AMPI that Russell was
billing AMPI and using the money for political purposes. Parr, 15 Hearings 6774, See
Section II, D.3.a., infra.
600
rate for work done and expenses. Russell served as a conduit of co-op
money to Lilly and others and alone received over $300,000 in bogus
fees to cover his payments and taxes, but he denied knowing the money
went for political purposes. 21
In December 1969, Lilly contacted Russell and said he was told to
get $5,000 from Russell. After checking with Nelson and receiving
his approval, Russell sent the money by check to Lilly on December
19. At the same time, according to Russell’s long-time assistant and
secretary, Jane Hart, a bill for $8,000 was sent to AMPI. 22 The same
procedure was repeated in January 1970 when Lilly requested and
received another $5,000 from Russell who then billed AMPI.
Lilly made numerous other requests to Russell in the next 2 years
to cover additional payments on the $100,000 loan and for other
political purposes, including moneys that Lilly made available to
Jake Jacobsen which Jacobsen represented were for John Connally’s
use. 23 In each instance, Russell or Hart either sent a check to Lilly
or cashed a check and Lilly came to Oklahoma City to retrieve the
cash. On each occasion, a corresponding phony billing was sent to
AMPI to cover the payment plus Russell’s estimated excess taxes
incurred as a result of the billing. 24 In all, Russell paid Lilly a total
of $89,500 and other AMPI employees another $20,000, and con-
temporaneously billed AMPI $158, 950. 25
Jane Hart says that she billed AMPI for Russell’s estimated ex-
cess taxes, but that “there was no fixed amount or percentage” that
was billed above the amount of the payment to Lilly. 26 According to
Russell and Halt, too little was billed, so that in both 1971 and 1972
Russell was compelled to go to AMPI for more money to cover his
taxes for the previous year.
In April 1971, Russell was given an AMPI check for $50,000 to
pay for his excess 1970 income taxes. 27 The payment was apparently
made in the form of a loan to Russell who signed a promissory note
payable to AMPI. However, there was an escape clause. The note
provided that if Russell were to die, the obligation would be waived ; 28
also, Russell’s monthly retainer was increased from $1,000 to $6,000
to cover his monthly payments to AMPI on the note.
Russell made only six payments on the note — totaling $16,666.68 —
in 1971. 29 In April 1972, Russell again discovered that his billings
to AMPI did not compensate him adequately for his excess 1971 in-
come tax liability. In settlement of his “claims,” Russell was provided
with another payment, approved by AMPI’s new general manager,
George Mehren, of $66,321.48, and the remaining obligation on the
1971 note — approximately $36,000 plus interest — was forgiven. There-
after, Russell’s retainer was eliminated and he supplied legal services
21 Russell Interview, supra.
22 Hart Affidavit, 17 Hearings 7921,
23 See Section V. A, infra.
24 Sarah Bezdek, Lilly’s secretary, says that the Russell checks to Lilly and his billings
to AMPI were sent by Russell to her together as a “routine thing.” Bezdek Interview,
April 8, 1974.
25 Hart Affidavit, 17 Hearings 7920-35 : Townsend. 16 Hearings 7094-95.
23 Prior to the issuance of the Wrie-ht Report, Jane Hart prepared an affidavit for sub-
mission to the Select Committee detailing Russell’s payments to Lilly and others and indi-
cating a total amount different from that reflected in the Wright Report. Subsequent to the
publication of the Wright Report. Russell informed Wright, by letter, that the Wright
Report’s information was incorrect in that regard and submitted his own figures which are
consistent with those in the Hart affidavit reflected in the Select Committee’s Report.
27 Hart Affidavit, Exhibit H, 17 Hearings 7930.
28 Hart Affidavit, Exhibit J, 17 Hearings 7932.
29 Hart Affidavit, 17 Hearings 7924.
601
to AMPI and submitted itemized bills for his actual legal services,
only, until October 1973, when his relationship with AMPI was ter-
minated.
In all, the committee has determined that Russell’s billings to AMPI
not for legal services, but for moneys delivered from 1969 forward
to Lilly and others associated with AMPI, amounted to over $300, 000. 30
Russell denies that he knew the moneys he paid to Lilly were for
political purposes. He says that he was told by Nelson, at the outset,
that the moneys were needed for legitimate legal services by AMPI
but that since AMPI management was being criticized by AMPI mem-
bers for excessive direct “home office” expenditures, he decided to ac-
count for the expenses as additional fees to Russell. 31
With regard to Russell’s knowledge of the purpose of his payments
to Lilly and others, Lilly testified that he told Russell that the pay-
ments to him were used for political purposes, and that in the fall
of 1973, Russell told him that he hadn’t submitted high enough bills
to AMPI to cover the moneys for political contributions. 32 Moreover,
Russell has told AMPI’s attorneys that Nelson repeatedly stated to
him that political contributions by attorneys ought to be treated as
a cost of doing business and that he expected attorneys to “take this
into account” in billing the co-op. Indeed, Russell admits that he at-
tended an AMPI board meeting in Las Vegas in December 1970, at
which Nelson said, according to Russell, that political contributions
should be an expense borne by AMPI, not the attorneys involved. 33
A contemporaneous note allegedly written by Russell himself to
Bob Lilly indicates that he knowingly billed AMPI for at least one
political contribution. In 1970, Russell gave $5,000 to Tom Townsend
of AMPI who in turn used it to make a political contribution. 34 Lilly,
who approved a number of Russell’s phony billings, says that Russell
then billed AMPI for the payment, and enclosed with the bill a note
addressed to Lilly (which Lilly provided to the Select Committee on
November 14, 1973) explaining that the bill represented the payback
to Russell for the contribution. 35
If they were ignorant of these transactions at the time, AMPI
leaders apparently learned, shortly after Nelson was removed in Jan-
uary 1972, of the magnitude of the Russell transactions. As noted
above, in April 1972, Russell received from AMPI a final settlement
worth over $100,000 for his conduit activities. It is undisputed that
Russell met with George Mehren (AMPI’s new general manager)
30 This includes the following :
Direct billings for payments to Lilly
Direct billing for payment to Hollowell
April 1971 payment — .
April 1972 payment- _. — .
Excess retainer, April 1971-March 1972 (12 times $5,000)
$138, 950. 00
20 , 000 . 00
50, 000. 00
66, 321. 48
60, 000. 00
Total 335, 271. 48
Less : Payments to AMPI on loan — (16, 666. 68)
Total 318, 604. 80
See Hart Affidavit, supra.
81 Russell Interview, supra. The co-op general and administrative expenses, including most
legal expenses, were paid from tlie San Antonio headquarters budget. Thus, to some extent,
Russeirs explanation does not appear logical since his fees (in lieu of someone else’s alleged
secret legal fees) were also billed to the “home office.”
32 Lilly. 14 Hearings 5956, 5960,
83 See Wright Report, p. 30. ^ ^
34 Lilly testified that one payment of $5,000 (in June 1970) and another of $10,000 (in
September 1970) were made by Russell in this manner. Lilly, 14 Hearings 5958, Townsend
testified to one $5,000 transaction only, in September 1970. Townsend, 16 Hearings 7094-95.
3 * See Lilly Exhibit 22, 16 Hearings 6041.
602
and Butterbrodt in late January 1972 to seek payment for his excess
taxes resulting from transactions in 1971. They assured Russell that
there would be no more of those transactions and agreed to meet his
request. Although they claimed they did not know that the prior
transactions were illegal, Mehren and Butterbrodt did not press Rus-
sell to tell them what he knew, and Russell apparently told them
only that if he were called to testify in court about these transactions,
he would plead the fifth amendment. 38
Neither Mehren nor Butterbrodt assumed responsibility for any
illegality in connection with the Russell settlement. Butterbrodt ex-
plained they had decided to honor all commitments of prior manage-
ment and that he did not insist on disclosure because it was “not our
obligation to investigate to find out whether there was wrongdoing
or wasn’t.” 37 Mehren says that he relied on opinion of counsel to justify
the Russell settlement. 38
b. J ake J acobsen and Joe R. Long
Jake J acobsen and his Texas law partner, Joe R. Long, admitted
giving $10,000 to Bob Lilly, but denied recouping the money from
AMPI. Lilly, however, says he received a total of $25,000 from them
and that they did recoup the money plus their excess taxes from the
corporation. There is independent evidence, obtained by the Select
Committee staff after Lilly testified, that tends to corroborate Lilly’s
account.
The Austin, Tex., firm of Jacobsen and Long was employed by
MPI in 1967 and then its successor, AMPI, for a monthly retainer of
$2,500 plus billings and expenses for work done. Jacobsen was subse-
quently retained by Mid-Am and DI in 1973. 39 As discussed above,
Jacobsen was involved in the formation and organization of TAPE,
the $100,000 contribution in August 1969 and the $100,000 loan by
Jacobsen’s bank to Lilly in December 1969.
On the same day as the loan to Lilly — December 17, 1969 — Jacobsen
delivered a $3,000 check and Long a $2,000 check to Lilly. The checks,
drawn on the law firm account, were made payable to Jacobsen and
Long, respectively, and were endorsed by them and by Lilly. 40 Ac-
cording to Lilly’s records, he used the proceeds of the checks to pay
$5,000 on the loan on the l7th, leaving a balance due of $95,000. 41
In June 1970, Lilly requested another $5,000 and Jacobsen and Long
complied with a firm check dated June 12, 1970, from Jacobsen, of
$2,875 and a firm check of the same date from Long of $2,125, again
each endorsed respectively by Jacobsen, Long and Lilly. 42
Jacobsen and Long each claimed that they were told by Lilly 43 (and
perhaps Nelson) that the money was needed to help Lilly repav a debt
for TAPE that could not for some reason be paid by TAPE. Although
Jacobsen says that Long may have discussed with Lilly the possibility
38 Butterbrodt, 17 Hearings 7629-30, 7667-68.
37 Butterbrodt, 17 Hearings 7633.
38 Mehren, 16 Hearings 7310.
39 Jacobsen, 15 Hearings 6380, 6382.
40 See Lilly Exhibit 7, 14 Hearings 6002.
41 See Lilly Exhibit 6, 14 Hearings 5999-6001.
iZ S'ee Lilly Exhibit 8, 14 Hearings 6003. The December and June $5,000 payments were
divided according to the ownership shares of Jacobsen and of Long in their firm at the
time — 60-40% in December, and 57.5-42,5% in June. Jacobsen, 15 Hearings 6402.
43 According to Lilly Exhibit 6. 14 Hearings 5999-6001, Lilly apparently contacted Long
in December, 1969.
603
of billing AMPI for the payments plus taxes, 44 both Jacobsen and Long
deny that they did recoup any of the money from AMPI. 45 Jacobsen
explained that he gave Lilly the money “as sort of a fee return” be-
cause AMPI was a “good client, and it was worth the good business
relations.” 46
There is evidence suggesting that, on the contrary, Jacobsen and
Long did recoup the payments plus taxes from AMPI, at the same
time, or shortly after each payment.
On the same day as the loan and the first $5,000 payment to Lilly—
December 17, 1969 — the firm of Jacobsen and Long located in Austin
(1) billed AMPI at San Antonio for $10,000 for work on a certain
matter, 47 (2) was paid by the San Antonio home office the full amount
and (3) deposited the $10,000 in its Austin account. 48
It was Lilly’s understanding that after the first recoupment,
Jacobsen and Long billed AMPI for their subsequent payments to
Lilly on a 3 or 4 week delayed basis. Thus, on July 16, 1970,
1 month after the June payment, the firm billed AMPI a total of
$22,000, including what Lilly believes was a fictitious charge of $10,000
for a particular matter. 49
Moreover, Lilly’s records indicate and he testified that he received
another $15,000 from Jacobsen and Long to make payments on the
loan — $5,000 on February 2, 1970 (the same day Lilly deposited
$10,000 in his account and made a $15,000 payment on the loan) and
$10,000 on August 6, 1970. 50 Although unknown at the time of Lilly’s
testimony in November 1973, the Select Committee has found in the
records of Jacobsen and Long independent evidence that tends to
corroborate Lilly’s account.
On February 2, 1970 — the same day Lilly says he received $5,000
from Jacobsen and Long — Jacobsen cashed a firm check for $3,000
and Long cashed a firm check for $2,000, for a total of $5,000. 51 On
August 6, 1970 — the same day Lilly says he received another $10,000
from them — Jacobsen apparently cashed a check for $5,750 and Long
another check for $4,250, for a total of $10,000. 52 Although Jacobsen
and Long say that these checks represented normal withdrawals from
their firm and not additional payments to Lilly, 53 neither can explain
44 Stuart Russell says that at one point he complained to Lilly about the amount of money
and number of payments requested of him and asked why Lilly couldn’t ask others. Accord-
ing to Russell, Lilly said that Joe Long had made some payments, too. Russell Interview,
supra. This is consistent with a conversation between Nelson and Russell about conduit
attorneys, during which, according to Russell, Nelson said that AMPI was paying Jacobsen
for political contributions. See Wright Report, p. 30.
^Jacobsen. 15 Hearings 6395-96; Long affidavit, 17 Hearings 7969-76. There is some
evidence that in the spring of 1969, Jacobsen had already counseled Isham to divert
funds — in that case, those of TAPE — for unreported cash contributions, but that Isham
objected because (1) it wouldn’t work (because the TAPE moneys would have to be
accounted for) and (2) it would be illegal. Isham says that nothing more was said to him
about the matter by either Jacobsen or Nelson, to whom Isham says he reported the matter.
Isham Interview, supra.
It should be noted that the alleged Jacobsen-lsham conversation may have taken place
essentially contemporaneously with the Semer-Kalmbach meetings at which, by Jacobsen’s
own account, it was understood that Kalmbach requested a $100,000 cash contribution and
that it not be reported. See Jacobsen, 15 Hearings 6387-89 and Section II. A.2., supra.
46 Jacobsen, 15 Hearings 6395, 6404.
47 Less than 1 month later, on January 6, 1970, the firm billed AMPI another $10,000
for the same matter. See Lilly Exhibit 9. 14 Hearings . 6004-06.
48 See Jacobsen Exhibits 4 and 5, 15 Hearings 6482, 6483.
49 Lilly Exhibit 11, 14 Hearings 6010-11.
1° See Lilly. Exhibit 6. 14 Hearings 5999-6001 ; Lilly, 14 Hearings 5937.
o1 See Jacobsen, Exhibits 9 and 10, 15 Hearings 6485 ; Morgan affidavit. 17 Hearings
7988-89. This affidavit -was based to a large extent on the results of an extensive search by
Select Committee staff investigators of the records of Jacobsen and Long in Austin.
52 See Jacobsen Exhibits 14 and 15, 15 Hearings 6486-87 ; Morgan affidavit, supra.
63 Jacobsen, 15 Hearings 6402-03, Long affidavit, supra.
604
the reason that the checks were cashed or the disposition of the funds,
or the coincidence that the amounts of the withdrawals equal the
amounts Lilly said he received from them on the dates involved.
Lilly believes that the Jacobsen and Long firm billed AMPI for
those payments, too, through billings of $10,000 on April 21, 1970,
and $22,000 on August 21, 1970. 54 Long says that these and the other
billings discussed above — in December 1969 and January, April, July,
and August, 1970 — represented legitimate legal services performed
by him for AMPI. 55
Jacobsen’s and Long’s records reveal other transactions similar to
those involving Lilly. For example, there are two other sets of checks
in the same ratio as the June and August 1970 checks and cashed by
Jacobsen and Long — two checks totaling $10,000 on September 9, 1970
and two totaling $5,000 in February 1971 56 — for which no specific
explanation of the disposition of the funds was given. 57 While the
committee has not been able to determine what other use, if any,
Jacobsen and Long made of these funds in connction with AMPI,
there is evidence that they were involved, on at least three other
occasions, with transfers of money, totaling $20,000, to Lilly and
another AMPI employee for political purposes in addition to the
two $5,000 amounts to Lilly for the repayment of his loan.
c. W. DeVier Pierson
Originally a lawyer from Oklahoma City, W. DeVier Pierson
came to Washington in 1965 to serve as chief counsel to the Committee
for the Reorganization of Congress ; in 1967 he joined the White House
staff as associate special counsel and in 1968, he became special counsel,
primarily for domestic policy matters, including agriculture. 68
When Pierson left the administration in January 1969, he went
into private law practice in Washington, and his firm (at that time,
Sharon, Pierson & Semmes) 59 was retained by AMPI, for $2,000 per
month, plus billings for particular casework and expenses, to monitor
and provide advice in connection with certain Federal administrative
agency matters.
As noted above, Pierson advised AMPI (and DI) of the reporting
requirements of their political trusts and, in December 1969, attended
the meeting with Nelson and Isham at which the payback scheme
originated. He agreed to give some money to Lilly and to contact
two others, Ted Van Dyk and Richard Maguire, whom he knew.
Pierson says that upon his return to Washington after the Decem-
ber 8 meeting, he did contact Van Dyk and Maguire and told each of
them that someone from AMPI would be contacting them. He says he
heard no more of the matter until January 1970 when Lilly contacted
him and asked for $5,000 to which Pierson had agreed as part of the
payback plan. Pierson says that he wrote a $5,000 check payable to
“ Lilly, 14 Hearings 5938, 5940. See Lilly Exhibits 10 and 12, 14 Hearings 6007-09,
6012-14.
“Long affidavit, supra. The firm’s secretary from 1959 to Jan. 31, 1972, Eula
Bulkley, says that she did not maintain files on case matters for billing purposes, but billed
clients according to whatever instructions were given to her by Jacobsen or Long. Bulklev
interview.
66 See Jacobsen Exhibits 16, 19, and 20, 15 Hearings 6437, 6495 ; Jacobsen, 15 Hearings
6404 ; Morgan Affidavit, supra.
67 See Jacobsen, 15 Hearings 6433 ; Long Affidavit, supra.
68 Pierson interview, supra.
60 In 1971, it became Sharon, Pierson, Semmes, Crolius and Finley. Pierson interview,
supra.
605
“Cash” dated January 26, 1970, cashed it and gave the proceeds to
Lilly. According to Lilly, he deposited the money on February 2,
1970 — along with the $5,000 he allegedly received that same day from
Jacobsen and Long — for the purpose of making a payment on the
$100,000 loan. 60
Pierson readily concedes that he was aware of the plan for the
conduits to recoup the money from AMPI, but he denies that he did
so. On the other hand, Isham understood that Pierson did recoup the
money at the outset of the plan. Moreover, at the same time that Pier-
son agreed to participate in the payback plan, he obtained the approval
of AMPI officials for a year-end payment to his firm of $8,500 and,
shortly thereafter, a 100-percent increase in his firm’s monthly retainer.
In a billing from Pierson’s firm to AMPI dated December 19, 1969—
11 days after the meeting and 2 days after the loan to Lilly — there is,
in addition to the monthly retainer of $2,000 and disbursements of
$16.21, a one-time charge of $8,500 for “additional legal services in
connection with legislative and administrative programs of the dairy
industry,” including certain listed topics. 61 Beginning in 1970, the
firm’s monthly retainer was doubled to $4,000 and it remained at that
level until his firm was released by AMPI in early 1972.
Pierson conceded that he discussed the $8,500 charge with Nelson
at the December 8 meeting (when the payback scheme was hatched)
but 'maintains that it represented a legitimate charge for work done
in 1969 in excess of his time compensated by the retainer and that he
had intended to discuss the matter with Nelson even before learning
of the scheme. 62 While Pierson did not keep time records of his day-to-
day general monitoring activities for AMPI, he did maintain time
records for his casework on particular AMPI matters which he says
reflect an additional 150 hours of time during 1969. With respect to
his increase in retainer effective January 1, 1970, Pierson says that he
discussed the increase with either Nelson or Parr in late December
1969 to cover excess work in subsequent years and avoid the need for
any year-end adjustments in the future.
d. Ted Van Dyk and Kirby Jones
Ted Van Dyk, a former aide to Vice President Humphrey, was
hired by AMPI in 1969 as, in Van Dyk’s own words, an “ambassador
to the Democratic liberal community, 63 as w y ell as a general consultant
on public affairs. He, and one of his employees, Kirby Jones, each
paid Bob Lilly $10,000 and recouped the money from AMPI, but they
deny knowing that the money was used for political purposes.
Van Dyk served as one of the principal managers of Humphrey’s
1968 Presidential campaign and, in 1969, became a vice president of
Columbia University. While at Columbia, he did some consulting
work for AMPI, whose leaders, Nelson and Parr, had met while
60 Lilly, 14 Hearings 5972 ; See Pierson check. 17 Hearings 8056. According to Lilly’s
records, he made a $15,000 payment on the loan, the same day, February %, 1970. See Lilly
Exhibit 6, 14 Hearings 5999—6001.
01 Pierson billing, 17 Hearings 8055. Pierson addressed the bill to MPI, although it had
merged into AMPI two months earlier.
62 Pierson also points out that even if the $8,500 payment was intended as a recoupment
for his payment to Lilly, it would not have covered his out-of-pocket cost of $5,000 since
he had only approximately a 25% ownership share in his firm.
63 Van Dyk, 16 Hearings 7028.
606
he was an aide to the Vice President. 64 In late 1969, he left Columbia
and formed the Washington consulting firm of Ted Van Dyk Associ-
ates, which was hired by AMPI at an annual retainer of $25,000 plus
expenses; in mid-1971, the retainer was increased to $5,000 per month.
But in February, 1972, the new AMPI management terminated the
retainer. The firm also worked for DI from mid-1972 until October,
1973. 65
Van Dyk thinks that in December, 1969 probably either Nelson or
Parr 66 contacted him and asked that he pay $10,000 to Lilly as added
compensation which AMPI did not want reflected in the company’s
books. 67
Although he says he thought the request was unusual, 68 Van Dyk
says he had no reason to question the explanation and complied with
the request. On December 22, 1969 — 5 days after the $100,000 loan
was made to Lilly — (1) Van Dyk mailed a $10,000 check to Lilly, (2)
he mailed an invoice to Nelson covering the $10,000 and (3) AMPI
sent him payment for the bill before it was received. 69 Van Dyk said
that the payment to Lilly and the billing and payment involving
AMPI were all done simultaneously because Van Dyk needed the
money in order to make the payment to Lilly before the end of the
calendar year as requested by AMPI. 70
There the matter stood until March 1970, when Van Dyk sent an IRS
Form 1099 to Lilly and the Internal Revenue Service reporting the
$10,000 payment to Lilly as additional compensation. In a letter to
Lilly at that time, he wrote :
As protection for both of us, you will be receiving a with-
holding slip for the $10,000 — just as I received one.
That closes the circle and keeps us beyond question. 71
Although Van Dyk thought the matter was irregular, he says he had
no reason to believe the transaction was anything other than as it was
represented to him.
The withholding slip caused a minor stir at AMPI, because it forced
Lilly to reflect the $10,000 as extra income and pay tax on it — though
he, of course, had used the $10,000 to make a payment on the $100,000
loan. 72 Van Dyk recalls receiving an angry call from Isham asking him
why he had reported the payment as compensation to Lilly.
Despite Isham ’s call — which Van Dyk admitted raised doubts in his
mind about the first transaction 73 — Van Dyk was asked and again
provided another $10,000 to Lilly the following summer. Van Dyk
says that in September 1970, 74 Nelson or Parr again called him and,
as in the previous request, asked that he pay $10,000 to Lilly as addi-
tional compensation, but without reporting it as a firm expense. Van
Dyk responded that his firm could not do so without filing another
84 Van Dyk, 16 Hearings 6983-84.
65 Van Dyk, 16 Hearings 6984.
ea A letter from Van Dyk to Nelson forwarding the first $10,000 payment to Lilly refers
to a conversation between Van Dyk and Lilly, (see Lilly Exhibit 13, 14 Hearings 6015—17)
but Van Dyk does not recall speaking to Lilly. Van Dyk, 16 Hearings 6994.
07 Van Dyk, 16 Hearings 6991-92.
88 Van Dyk, 16 Hearings 6992.
69 See Lilly Exhibits 13 and 14, 14 Hearings 6015-18.
70 Van Dyk, 16 Hearings 6993.
71 See Lilly Exhibit 15, 14 Hearings 6019—20.
78 It appears that Lilly was subsequently paid by AMPI to cover his excess taxes resulting
from the report of the $10,000 from Van Dyk. Lilly, 14 Hearings 5945.
73 Van Dyk, 16 Hearings 6997-98.
74 The first correspondence from Van Dyk to Lilly concerning this second request is
dated August 27, 1970. See Lilly Exhibit 16, 14 Hearings 6021-23 and discussion infra.
607
Form 1099, and when he was then asked to pay Lilly the money from
his personal funds, he said that for him to do so — and be compensated
by AMPI for the payment plus his excess taxes — would be too costly
become of his income tax bracket. He says he was then asked if he could
have an employee with a lower bracket act as the conduit. Van Dyk
says that although he thought the matter was awkward, he asked his
employee, Kirby Jones, if he would do so, and Jones agreed. 75
Jones says that Van Dyk passed on to him AMPI’s request, describ-
ing the similar transaction the previous year and AMPI’s request
that no IRS forms be filed this time. Jones, who did not have any con-
tact with the milk producers, conceded that he also thought the pro-
cedure was unusual, but he agreed to act as the conduit because he
was to receive at that point an extra $2,000 from the transaction to
cover his future excess tax liability which he planned to use tem-
porarily for an upcoming trip abroad. 76
On August 27, 1970, Van Dyk sent a firm invoice to Lilly covering
what he termed the $12,000 “direct expense,” and Isham wrote a check
to Ted Van Dyk Associates dated September 4, 1970, in payment. 77
On September 9, 1970, Jones sent a check for $10,000 to Lilly, 78 and
2 days later Van Dyk gave Jones a check for $12,000, with the fictitious
notation “AMPI Convention Project.” 79 Jones later received from
the firm a form 1099 reflecting the $12,000 payment and he duly re-
ported it on his Federal income tax return and paid the tax due. 80
Both Van Dyk and Jones say that they did not know 7 that Lilly had
borrowed money for political purposes or that the $20,000 was used
to repay those loans or for any other political purpose. 81
e. James R. Jones
Congressman James R. Jones (Democrat, Oklahoma), before being
elected to Congress in 1972, was employed by AMPI from 1969 to
1972. It is undisputed that during that period he twice made payments
of $5,000 to Bob Lilly, for a total of $10,000, but it is not clear whether
he knew the purpose of the payments or whether he recouped the
money from AMPI.
Congressman Jones was a member of President Johnson’s White
House staff, first as an assistant to Marvin Watson, the President’s
appointments secretary, and then, in 1968 after Watson left, as Wat-
son’s replacement. While at the White House, he met Nelson and Parr
and, when he left the administration in January 1969, he was hired
by them pursuant to an oral agreement for 5 years at an annual re-
tainer of $40,000 plus expenses to edit and publish the co-op’s monthly
magazine, Dairymen Digest. In addition, he was to receive a reasonable
amount for other work performed. 82
Although he had hoped to act as a general political and manage-
ment consultant for AMPI and did. in fact, coordinate some regional
public relations activity for AMPI, Jones’ primary responsibility
75 Van Dyk, 16 Hearings 6998.
70 Jones affidavit, 17 Hearings 7939.
77 Lilly exhibit 16, 14 Hearings 6021—23.
78 Van Dyk exhibit 3, 16 Hearings 7045.
79 Van Dyk exhibit 1, 16 Hearings 7043.
80 Jones affidavit, 17 Hearings 7938-43. See Van Dyk exhibit 2, 16 Hearings 7044.
81 Van Dyk, 16 Hearings 7000 ; Jones affidavit, supra .
82 Jones interviews, Dee. 13, 1973, and Jan. 18, 1974 ; Nelson interview, June 12, 1974.
35 -687 O - 74 - 40
608
was as editor of the magazine. He, along with a number of other AMPI
attorneys and consultants, was fired in 1972 when Mehren became
general manager. During the 1969-72 period, he also maintained a
private law practice in Tulsa, Okla.
In December 1969, Jones was asked by Lilly to contribute $5,000.
According to Jones, he was told that farmer contributions to TAPE
were not being made in sufficient amounts and he was asked to make a
contribution to TAPE. Jones says that he agreed to give $5,000 on
condition that it be used to purchase tickets to Democratic fundraising
dinners and that he and his wife be permitted to use some of the tickets.
Jones says that sometime later he and his wife did attend Democratic
dinners using tickets purchased by TAPE. 83
When Jones was first questioned about this matter by the Select
Committee staff in December 1973, he recalled that he paid the
$5,000 directly to TAPE. In fact, it appears that he paid the money
to Lilly, by check dated December 23, 1969, which Lilly used to help
repay the $100,000 loan. 84 More recently, Jones has stated that he made
the check payable to Lilly as requested, but he could not explain why
Lilly wanted the money paid to him. 85
Jones did not remember making any additional payments to Lilly
or TAPE, but when shown a copy of his canceled check dated May 5,
1970, in the amount of $5,000 and payable to Lilly 86 (which Lilly
used for his political loans) , he acknowledged making the payment
and said that Lilly had told him again that more money was needed
to build up the TAPE treasury. In fact, by 1970 TAPE had over
$300,000 in its account. 87 Jones says that although he edited the AMPI
magazine and made speeches for TAPE to solicit new members, he did
not know the existing level of TAPE funds. 88
There is also evidence that Jones, who acknowledged that the pay-
ments to Lilly were for political contributions, simultaneously received
from AMPI amounts approximately 40 percent in excess of those pay-
ments. On December 19, 1969 — 2 days after the loan to Lilly and 3 days
before Jones’ first check to Lilly — (1) Jones sent a bill to AMPI (ad-
dressed to Bob Lilly) for $6,890 for “professional services and ex-
penses” 89 and (2) Lilly requested and Isham approved a payment to
Jones for the invoice. 90 On April 9, 1970 (less than 1 month before the
second payment to Lilly), Jones sent a bill to AMPI (addressed to
Lilly) in the amount of $7,150 “for professional services rendered on
special projects.” 91 Eleven days later, on April 20, 1970, a check was
written to Jones for that invoice. 92
Jones conceded that he was short on cash in December 1969 and
April-May 1970 and that the two invoices were submitted to secure the
money to pay Lilly. A principal matter in dispute is whether he had
rendered services for which he was legally entitled to additional com-
83 Jones interviews, supra .
,84 Jones check, 17 Hearings 8057.
85 Jones letter, 17 Hearings 8058-60.
86 Jones check, 17 Hearings 8057.
87 The TAPE reports, filed with the Clerk of the House of Representatives, show
receipts in 1969 totalling approximately $369,000 and cash on hand at the end of each
reporting period in 1970 of over $300,000.
88 Jones also says that he was subsequently asked by Lilly for a third payment but that he
refused because he understood TAPE had accumulated approximately $800,000 by that
time.
89 Jones’ first billing, 17 Hearings 8065.
00 AMPI check, 17 Hearings 8066.
01 Jones’ second billing, 17 Hearings 8069-70.
02 AMPI check, 17 Hearings 8071.
609
pensation or whether the billings were a device to recoup the amount
of his payments to Lilly plus Jones’ excess taxes.
In the staff interviews, Jones asserted that the two billings rep-
resented additional work he did for AMPI, although in the 3-year
period that Jones worked for AMPI, these invoices were the only
special billings that Jones submitted to AMPI in addition to his
monthly retainer and expenses. Subsequently, through his attorney,
Jones submitted to the committee staff an analysis of his time records
for 1969 and part of 1970 to justify the two billings.
With respect to the earlier billing, he states that he estimated on
December 19th that his services for AMPI in 1969, at a rate of $50 per
hour for work in Tulsa and $70 per hour for work away from Tulsa,
would represent a total of $46,890 — which he covered by the $6,890
billing plus the $40,000 retainer payments. 93 He says that he later
found in 1970 that, in fact, his time for 1969 represented an additional
$250. Therefore, when he estimated in April 1970, his excess services
for the entire 1970 calendar year, he added $250 to $6,900 (rounding
off the $6,890 figure) and billed AMPI an additional $7, 150. 94
This analysis apparently fails to take into account the fact that the
April 9, 1970, billing refers to a “special project” and neither Congress-
man Jones nor his attorney have explained what, if any, special project
(apart from time spent on regular services for AMPI) Jones per-
formed. 85 Moreover, Nelson does not recall any work performed by
Jones other than on the co-op magazine and, although Jones claims his
hours in 1971 amounted to an additional $39,000, he submitted no bills
to AMPI for that work. 96
/. Frank Masters
Frank Masters, a San Antonio attorney, has performed legal services
for AMPI and its predecessor co-ops for a number of years. 97 Accord-
ing to Lilly’s records, Masters paid him a total of $6,000 in 1969 and
1970 which he applied to repay the original $100,000 and subsequent
political loans. 98 Masters acknowledges the payments 99 but denies
that he knew of the conduit scheme or billed AMPI for the payments.
According to Masters, Lilly came to him late in 1969 and asked him
to make a substantial contribution in cash “to Austin.” 1 Masters under-
stood Lilly to mean the Texas Democratic Party and its elected
officials, although Masters says he was not aware of any campaigns
in progress at the time. Masters says that since he knew that Lilly
had spent many years in political work in Austin and assumed that
Lilly might help bring Masters business or give him some influence
03 Apparently through an oversight, Jones was paid $6,980 by AMPI — $90 more than his
December 19 bill of $6,890. , . .
04 See Kennelly letter, 17 Hearings 8061-64. According to Jones’ attorneys’ analysis of
the entire year— based on actual records for the first 7 months of 1970 and projections for
the remaining months (during which he unsuccessfully ran for Congress) — Jones’ services
represented a total of $44,750, or $2,400 less than he billed to AMPI.
95 George Mehren of AMPI told the Committee that it seemed to him that Jones work on
the co-op’s magazine, Dairymen Digest, consisted of arranging the covers and doing minor
editorial work on the magazine, or, as he put it, “edit the editing.” Mehren, 16 Hearings
7330. , ^
08 See Nelson interview; Kennelly letter, supra. Jones’ failure to bill AMPI regularly for
excess time or other work may account for the fact that Robert Isham, AMPI’s
comptroller, was not even aware that an agreement existed whereby Jones could bill AMPI
for such time or work. See Isham interview, supra .
07 Masters, 16 Hearings 6938.
08 Lilly, Exhibit 6, 14 Hearings 5999-6001.
09 Masters, 16 Hearings 6942-43, 6951—52.
1 Masters, 16 Hearings 6940.
610
at the State level, he agreed. Lilly testified that he made several
requests of Masters but that he did not mention State candidates;
instead he says he told Masters that he needed money for political
contributions . 2
Although Masters denies billing AMPI for his payments to Lilly,
he conceded that he never received either any acknowledgement from
any party or State official for his contributions or any assistance for
his law practice from Lilly . 3
Although Lilly does not recall discussing with Masters the possi-
bility of recoupment, 4 there is evidence that Masters attended the
Las Vegas AMPI board meeting at which Nelson reportedly referred
to high legal fees and use of AMPI attorney fees for making political
contributions. 5
While Masters apparently assembled over a period of time the
cash he gave to Lilly, 8 thereby making the tracing of the source of
the funds virtually impossible, several transactions between AMPI
and Masters at about the time of the loan to Lilly seem out of the
ordinary. In addition to the regular monthly billings by Masters and
payments from AMPI, Isham wrote a check dated December 2, 1969,
to Masters for $5, 397.96, 7 but there is no record in AMPI’s or Masters’
files of an underlying invoice. On December 19, 1969, an AMPI check
to Masters for $5,000 was made out, again with no invoice. 8
Masters has no explanation for the December 2d payment and says
that the December 19th was an advance payment to him on services
performed but not billed to AMPI. Although Masters says he talked
directly to Isham to get the advance, there is no record at AMPI of
any request or explanation for the check."
g. Richard Maguire
Richard Maguire is a lawyer who was an official with the Demo-
cratic National Committee for a number of years. His firm was re-
tained by AMPI in 1969 at a monthly retainer of $2,500. According
to Lilly, Maguire made a number of cash payments to him in 1970
and 1971 totaling $10,000. 10 Except in one instance, Lilly allegedly
obtained Maguire’s payments through another AMPI consultant,
Clifford Carter. 11 Maguire says he does not recall making any pay-
ments to Lilly directly or through Carter and he knows of no conduit
payback scheme. 12
Lilly has reportedly informed AMPI’s attorneys that Maguire re-
couped the money through an increase in his retainer, and Isham has
2 Lilly, 14 Hearings 5967. If, in fact, Lilly referred to Austin, he may have been referring
to his loan (and account) in the Citizens National Bank of Austin.
3 Masters, 16 Hearings 6954. 6055.
* See Lilly, 14 Hearings 5967.
5 See discussion in section II.D.3 supra.
6 See Masters, 16 Hearings 6955, 6970-71.
7 Masters Exhibit 3, 16 Hearings 6982.
8 Masters Exhibit 2, 16 Hearings 6982.
9 On December 20, an invoice for $4,200, that makes no reference to either previous check
that month, was submitted by Masters. See Masters Exhibit ID, 16 Hearings 6981. On Jan-
uary 6, 1970, AMPI paid Masters for the December 20th bill ($4,200) plus bills for
August, September and October, 1969 (all three of which had been dated by Masters on
November 4) for a total of $11,840 — less the December 19th $5,000 payment termed an
“advance.” See Masters Exhibits 1. 1A, IB and 1C, 16 Hearings 6973-6980. The delay in
paying the November 4th bills until January appears to be unusual because AMPI records
show that most of Masters’ bills (both before and after November 4) were paid on the same
dav or within several days of their submission to AMPI.
10 See Lilly Exhibit 6, 14 Hearings 5999-6001.
11 Lilly, 14 Hearings 5968-69.
12 Maguire interview, November 13, 1973.
611
confirmed this. 13 Starting January 1, 1970, soon after the. conduit
scheme began (but before Maguire, according to Lilly’s records, made
any payments to Lilly), 14 Maguire’s monthly retainer was raised by
AMPI to $4,000 a month — a jump of $18,000 per year — and continued
for 2 years until terminated by AMPI. 15 With regard to the retainer.
Maguire says that he assumed that because he had advised Nelson and
Parr concerning the formation of TAPE which had proven success-
ful, they were rewarding him with an increase. 16
Ti. Clifford Carter
Clifford Carter, a Washington, I).C., consultant who is now deceased,
reportedly was a friend of Nelson and was retained by MPI and then
AMPI for over 3 years beginning in 1968. 17 AMPI’s records indicate
that he received monthly payments of $1,000 plus expenses during that
time.
According to Lilly, Carter made several payments to Lilly totaling
$10,000 in 1970 and 1971 and, as noted above, Lilly usually received
both Maguire’s and Carter’s payments from Carter at the same time.
There is no direct evidence that Carter billed AMPI for his pay-
ments. However, in an invoice dated December 29, 1969, Carter billed
AMPI $3,500 for “Services rendered for January 1970.” This appears
to be the only invoice of its kind that Carter submitted to AMPI while
he was retained. Since Carter is now deceased, the committee has been
unable to obtain necessary clarification of this bill and of Carter’s
knowledge of the AMPI conduit arrangement.
E. Use of the Conduit Scheme eor Other Corporate Political
Contributions
After the $100,000 loan in December 1969, Lilly borrowed additional
moneys from the Citizens National Bank (also secured by a TAPE
certificate of deposit) during 1970 and 1971 at Nelson’s direction, to
make other political contributions, which were subsequently repaid
with corporate funds laundered through the conduits, primarily
Bussell. 18
Since TAPE had hundreds of thousands of dollars in funds avail-
able for political contributions, the question arises as to why corporate
funds were used for political contributions. At least with respect to
the corporate contributions to national Democratic candidates, detailed
elsewhere in the committee’s report, Nelson and Parr had a simple and
telling explanation : They testified that they made such unreported,
cash political contributions because they feared that they would “incur
the enmity” of the Nixon administration if their support of key Demo-
crats was detected by the White House. 19
13 See Isham interview. April 24, 1974 ; Wright Report, p. 22.
14 It should be noted that Lilly could not identify, from his records, the source of certain
cash payments including a $5,000 payment on or about February 2, 1970. See Lilly Exhibit
6 , supra .
16 Maguire interview, supra.
16 Ibid.
17 Wright Report, p. 23.
18 Lilly Exhibit 26, 14 Hearings. 6045-49.
19 Nelson, 15 Hearings 6547 ; see Parr, 15 Hearings 6832. AMPI, Nelson and Parr have
each pleaded guilty to violating 18 U.S.C. 371 for conspiring to make corporate contribu-
tions in violation of 18 U.S.C. 610 in connection with the 1968, 1970, and 1972 Federal
elections. In addition, AMPI pleaded guilty to five specific corporate contributions, including
the $100,000 to Kalmbach.
612
III. CONTACTS BETWEEN AMPI AND THE PRESIDENT
AND ADMINISTRATION OFFICIALS IN 1970— AN
ALLEGED $2 MILLION PLEDGE TO THE PRESIDENT’S
RE-ELECTION CAMPAIGN
The milk producers were reportedly “disappointed” with the White
House response to their $100,000 cash contribution in 1969. The fol-
lowing year, their lobbying efforts and contacts with the White House
increased — as did the amount of their commitments.
During 1970 and 1971, certain White House officials understood
AMPI had pledged and then later reaffirmed its commitment to con-
tribute $2 million to the President’s reelection campaign and, at one
point, a White House official reportedly told the milk producers that
it was a $2 million “package.” During that same period, AMPI realized
substantially all of its three “objectives” articulated to Kalmbach
in connection with the $100,000 contribution in 1969. In 1970, the ad-
ministration granted the dairy industry the largest single milk price
support increase by any administration at the start of a marketing
year, and set dairy import quotas generally favorable to the milk
producers.
In 1971, the President reversed the decision of his Secretary of
Agriculture and granted another price support increase. Within hours
after the President’s decision, the milk producers were called upon
by top Presidential aides to reaffirm the $2 million pledge which they
did just prior to the public announcement of the President’s decision.
Although industry and administration officials deny any quid pro quo
linking the announcement to the reaffirmation, Kalmbach, at the di-
rection of Ehrlichman, met with a key dairy leader and Murray
Chotiner who told him that the reaffirmation was linked to the an-
nouncement of the President’s decision. Soon after the pledge was
first announced to White House officials, the President personally
called and met with the AMPI leadership and, at about the time some
contributions were, in fact, made, he met with leaders of the other
co-ops and later attended and addressed an AMPI convention.
The events in 1970, especially with respect to the $2 million pledge
and import quotas, are discussed in detail in this section, and those m
1971, with respect to milk price supports and dairy money for the
President’s campaign, Treasury Secretary John Connally and the
Ellsberg break-in, in sections IV and V.
A. Meetings With Colson — the $2 Million Pledge
1. MEETINGS WITH COLSON
Charles Colson joined the White House staff in November 1969
as Special Counsel to the President. By that time, the organization of
the new administration — which was the subject of the early Semer-
Kalmbach meetings in 1969 — began to take shape. In contrast to
Semer’s expectations, he found that the White House was organized
along essentially political, rather than subject matter, lines. Colson
was given the responsibility for special-interest groups, such as the
dairy co-ops. 20
20 Ehrlichman, 16 Hearings 7375. Prior to entering a guilty plea to one count of obstruc-
tion of justice in the Ellsberg break-in case on June 3, 1974, Colson had refused to testify
before the Select Committee on Fifth Amendment grounds.
613
Colson apparently had a great deal of antipathy for Semer, 21 dating
back several years when both were partners in a Washington law
firm. At about the same time that Colson began dealing with AMPI,
it hired the law firm of Reeves and Harrison, one of whose name
partners, Marion Harrison, was a Nixon State cochairman in 1968
and a good friend of Colson. 22 According to Kalmbach, Colson was
probably instrumental in Harrison replacing Semer as AMPI’s law-
yer for White House matters. 23
AMPI leaders and Harrison met with Colson at least three or four
times in 1970. 24 In an apparent continuation of the efforts begun in
1969, the purpose of these meetings was twofold : (1) to press AMPI’s
position to the administration on important substantive matters af-
fecting the dairy industry, such as quotas on dairy products and milk
price supports; and (2) to reiterate their interest in making sub-
stantial contributions to the President’s campaign. 25
2. THE $2 MILLION PLEDGE
a. Colson — a 11 $2 Million Package ”
In the course of the meetings with Colson in 1970, the milk pro-
ducers apparently indicated that, the entire amount of their “poten-
tial” of $1 million per year (as Semer had put it in 1969) might be
translated into financial support for the President. Parr testified
before the Select Committee on December 21, 1973 that, in one meeting
with Colson, “I just remember a discussion of about a million dollars,
and then somebody said $2 million.” 26 According to Parr, Colson said :
“[Tjhisis a $2 million package.” 27
Parr further testified :
Mr. Dorsex : Do you recall what was said immediately
prior to his saying he thought it should be a $2 million pack-
age?
Mr. Parr: The best I can recall is that we were constant-
ly talking about the numerous problems that dairy farmers
were having and that is all I can recall about it . 28
Parr testified that Colson’s remark was made in “sort of a jesting
manner.” 29 However, when asked to explain that testimony, he testi-
fied that he based his impression solely upon the fact that Colson was
smiling at the time. 30
The other dairy representatives apparently took the discussion seri-
ously. Testifying before, the Select Committee on December 18, 1973 —
3 days before Parr — Nelson stated that he was present when Parr men-
tioned to Colson the $1 and $2 million figures.
21 Kalmbach. 17 Hearings 7593.
22 Reeves and Harrison was retained by AMPI as of January 1. 1970.
23 Kalmbach, 17 Hearings 7593. Semer testified that he was told by Gleason sometime in
1970 that he was placed bn a White House “black list” in part because of his association
with Senator Muskie. then the leading 1 Democratic opponent to the President for the 1972
election. Semer. 16 Hearings 7210. In the Select Committee’s hearings, documents were
disclosed that indicate that Semer was on a White House enemies list. See 4 Hearings 1723.
24 Parr, 15 Hearinas 6770.
25 Nelson, 15 Hearings 6541.
28 Parr, 15 Hearings 6817.
27 Ibid. ; Parr had given the first portion of his testimony to the Select Committee on
December 20, 1973.
28 15 Hearinas 6883-84.
29 Parr, 15 Hearings 6877.
ao Pan*, 15 Hearings 6878, 6884.
614
Nelson stated that, the two purposes of their meetings with Colson
were “[t]o press the position we were seeking to have adopted con-
cerning supports, imports or whatever it would be at the moment, and
to get the names of committees.” 31 Asked about his intent in discuss-
ing contributions with Colson, Nelson testified :
Mr. Nelson. Well, the matter of contributions was dis-
cussed on the basis that we wanted to support the President,
that we knew we had not in the past, that we wanted to, we
had the ability to ; and if they would come up with the names
of committees, we would go forward and do it.
Mr. Weitz. Why did you tell Mr. Colson this ?
Mr. Nelson. It was our understanding that he also had
something to do with fundraising.
Mr. Weitz. He was certainly aware, was he not, of your
intention to contribute and, in fact, of your contributions?
Is that your understanding?
Mr. Nelson. Yes, sir ; no question about that.
Mr. Weitz. Did he raise the matter of contribution with
you?
Mr. Nelson. Well, he discussed the matter of contributions
with us. I will say this, I think in order to be fair, we would
have to say that they did not come seeking us, we sought
them, because it appeared that we were not going to get any-
place if we did not. 32
Most significantly, White House aides took the pledge seriously.
Henry Caslien (who was Deputy Assistant to the President and, be-
ginning in September 1970, was supposed to assume Colson’s respon-
sibility for the dairy co-ops) , told the Select Committee staff that Col-
son told him that the milk producers intended to contribute $2 mil-
lion. Haldeman, too, knew of the offer of a $2 million contribution,
although he is not sure who told him. 33 Haldeman made a point of
distinguishing to the Select Committee staff between a pledge and what
he understood to be the milk producers “ ‘declared intention’ to con-
tribute $2 million.” 34 However, at another point in Haldeman’s state-
ment to the Select Committee staff, he referred to the dairv producers’
“pledge.” 35
b. $2 Million and the Reelection C ampaign
Shortly after the pledge was made to Colson, the White House
began preparing for the President’s reelection campaign. Not surpris-
higly, the milk producers and their pledge began receiving a great
deal of attention.
Kalmbach testified that in mid-November, 1970, he met with Halde-
man to discuss early fundraising for the President’s 1972 election. 36
Haldeman stated that he believes Attorney General Mitchell was pres-
ent at that meeting. 37 Kalmbach was to act as the principal fundraiser,
81 Nelson, 15 Hearings 6541.
33 15 Hearings 6538.
33 Haldeman, 16 Hearings 7166—67.
34 Haldeman, 16 Hearings 7159.
33 Haldeman, 16 Hearings 7171.
38 Kalmbach, 17 Hearings 7589. Haldeman’s logs indicate that he met with Kalmbach in
the White House on November 19 and 20, 1970.
37 Haldeman, 16 Hearings 7161.
615
particularly for large contributions, until a finance chairman for the
campaign was to be named in 1972. 38
Essentially contemporaneous with the Haldeman-Kalmbach meet-
ing were one or more meetings at which the details of the anticipated
$2 million milk producers’ contribution was discussed by key White
House officials and Republican fundraisers. Kalmbach remembers
attending two meetings during the fall of 1970 with the milk pro-
ducers, the first in October in Colson’s office, and the second in Novem-
ber or December in the Madison Hotel. 39 Although the existence of an
October meeting cannot be corroborated, it is essentially undisputed
that in mid-November (probably November 19) Colson, Kalmbach,
and Tom Evans (a former law partner of Mitchell and Nixon and
assistant finance chairman for the 1968 Nixon campaign) met with
Nelson, Parr, Harrison, and Patrick J. Hillings (of counsel to Harri-
son’s firm) in the Madison Hotel. 40 Since it was understood that the
trusts were reporting their contributions to the Clerk of the House, the
discussion centered on the way in which, despite these reports, publicity
in connection with the anticipated $2 million contribution could be
avoided. 41 Kalmbach testified : “We were trying to develop a proce-
dure . . . where they could meet their independent reporting require-
ments and still not result in disclosure. 42
The result arrived at was for the milk producers to break down the
$2 million into numerous smaller contributions to multiple committees
in various States which could then hold the money for the President’s
reelection campaign. In that fashion, the milk producers could report
the contributions, including information on the recipient committees,
without the ultimate beneficiary, the President’s campaign, being
disclosed. 43
Nelson said that he realized several hundred committees would be
needed for such a large contribution, particularly in view of the $2,500
limit per committee per year placed by his lawyers, Harrison and Hill-
ings, on the contributions. 44 Kalmbach testified that this use of multiple
committees was not unusual — even 750 or 1,000 committees would not
have been too many, if needed to accommodate a large contributor like
the milk producers.
Kalmbach is sure that he reported the substance of these meetings in
October and November, 1970 to Haldeman. This is corroborated by
Haldeman’s statement that he was aware of the expected contribution.
Following the meeting, there was a period of several months during
which no substantial progress was made in forming the committees and
38 Kalmbach, 17 Hearings 7589-90.
30 Kalmbach, 17 Hearings 7590-92. . .
40 The Select Committee staff first received testimony about this meeting on December 4,
1978, from Marion Harrison. See Harrison, 14 Hearings 6257—59. The Select Committee has
fixed the date of the meeting in the following manner : Kalmbach does not remember any
instance in which he stayed in a Washington hotel other than the Madison Hotel. The rec-
ords of the Madison Hotel for November 1970, subpenaed by the Select Committee, indicate
that Nelson rented a suite of three rooms for the night of the 18th, Kalmbach two rooms
for the 18th and 19th, and Evans one room for the 18th. There were no rentals recorded
for those persons at any other time that month. Nelson testified that 4 the meeting took
place immediately after a meeting between Nelson and Secretary Hardin. Since the stair
has uncovered a letter from Harrison to a IJSDA official dated November 20, 1970, appar-
ently referring to such a meeting on the morning of November 19, 1970, the November
meeting in the Madison Hotel appears to have taken place on the 19th.
41 Kalmbach, 17 Hearings 7592.
42 Kalmbach, 17 Hearings 7593.
43 jMd.
44 Nelson, 15 Hearings 6536. According to Lee Nunn, vice chairman of FCRP, the $2,500
maximum was set so that in the event the milk producers mistakenly made two contribu-
tions to the same committee in one year, they would not violate the $5,000 limitation in the
Corrupt Practices Act. Nunn. 17 Hearings 7542.
616
making the contribution. Activity in that area was increased in March
1971, at the time of the President’s deliberations on the milk price sup-
port matter, discussed in greater detail in section IV.
B. Contacts With the President — the $2 Million Pledge
Haldeman conceded to the Select Committee staff: “[0]bviously
an offer of a $2 million contribution is a matter of interest . . . And the
question, if not spoken, automatically arises as to why.” 45 Haldeman
went on to say that he was told the money was to be a campaign con-
tribution and not a bribe or a quid pro quo. He acknowledged, how-
ever, that he was unaware of the meetings between Colson and AMPI
in 1970 at which both administration action and campaign contribu-
tions were reportedly discussed. 46
Haldeman also stated :
I have a general belief, assumption, that the President was
aware — and I cannot tell you when — that the milk industry
had indicated their intention of providing campaign
support. 47
The White House conceded in January 1974, that the President was
informed directly by Colson in September 1970, of the $2 million
pledge. 48 Shortly after the pledge was made, AMPI leaders succeeded
in obtaining several sought-after goals, including personal contact
with the President and favorable action on dairy import quotas.
l. president’s call to nelson
Parr testified that the AMPI leadership had been trying to see the
President since the beginning of the administration. 49 Nelson testified
that by making contributions, he hoped to get the President to attend
AMPl’s first annual convention in Chicago in September 1970. 50
The strategy did not work in 1970. The date of the convention, Sep-
tember 4, 1970, fell at a time when the President was hosting the Pres-
ident of Mexico at San Clemente.
Instead, the President personally called and spoke by telephone
to Nelson at the convention. 51 Nelson testified that the President made
three points: (1) he told Nelson that he had instructed Secretary of
Agriculture Clifford Hardin (who attended the convention in lieu
of the President) to announce the renewal of the school milk program ;
(2) the President expressed his desire to attend AMPl’s next con-
vention; and (3) he had talked with Hardin who had suggested that
he meet with dairy leaders at the White House. Nelson relayed this
information to those present at the convention. 52
The first personal meeting between AMPI leaders and the President
came 5 days later, fulfilling one of AMPl’s three “objectives” as stated
to Kalmbach the year before.
45 Haldeman, 16 Hearings 7167.
49 Haldeman, 16 Hearings 7166-67.
47 Haldeman, 16 Hearings 7184.
48 See Section B.2., infra.
40 Parr, 15 Hearings 6794.
60 Nelson, 15 Hearings 6539.
61 The White House White Paper entitled “The Milk Price Support Decision” and released
January 8, 1974 (hereafter “White Paper”) (a copy of which is printed at 17 Hearings
8073-92) terms the call a “courtesy call” of a type frequently made by the President.
52 Nelson, 15 Hearings 6550.
617
2. PRESIDENTIAL MEETING WITH NELSON AND PARR
On September 9, 1970, Nelson and Parr met briefly with the Pres-
ident in the Oval Office during an “open hour” reserved for brief
courtesy meetings between the President and groups and individuals.
Nelson assumes Colson arranged the meeting 53 and Parr believes
that Colson was present. 54
At the meeting, after photographs were taken, Nelson and Parr
mentioned their successful convention, and the President told them
to work with Hardin in setting up another Presidential meeting with
more dairy leaders. 55
The White Paper says that :
[although money was not discussed in the meeting . . .
it is evident that raising and making political contributions
to both Democrats and Republicans were important, con-
tinuous and conspicuous activities of the dairymen during
1970, 1971, and 1972. 56
Colson helped to make this activity conspicuous to the President.
The White House has acknowledged that Colson, in a memorandum
attached to a briefing paper to the President for the September 9
meeting, asserted that AMPI had pledged $2 million to the Pres-
ident’s 1972 campaign. 57
The White House, in its White Paper, has stated that it is unknown
whether any such pledge was made. It should be noted, however, that
the White House has in its possession the Colson memorandum
and other evidence, such as a later internal White House memorandum
to Haldeman, 58 that specifically discuss the original $2 million com-
mitment of the milk producers.
The committee’s efforts to determine the extent of the knowledge
and participation of the President and his aides in this political fund-
raising effort have been hampered by the refusal of the President to
honor the Select Committee’s subpena (as well as numerous informal
requests) for White House materials relating to dairy trust political
contributions. This refusal has extended even to materials for which
no claim of executive privilege (or any other privilege) has been
asserted by the President and which have been produced to a private
litigant in the course of the suit challenging the President’s 1971 price
support decision. Some, but by no means all, of these materials have
been made public by the parties in connection with that litigation and
have thus become available to the committee and are discussed in the
course of this report ; but the committee cannot determine the extent
to which the additional withheld documents would shed further light
on Presidential and White House involvement in the matters under
investigation.
Even the White House, description of withheld documents relating
to the milk fund investigation is incomplete. For example, the Colson
memorandum to the President for the September 9, 1970, meeting re-
ferring to the $2 million pledge is described by the White House in
53 Nelson. 15 Hearings 6551.
54 Parr, 15 Hearings 6796.
55 Parr, 15 Hearings 6797.
68 White Paper, p. 8, 17 Hearings 8083.
57 After the Select Committee’s Report was prepared, the House Judiciary Committee
released a copy of this memo, which is included in Appendix D to this Report.
58 See Section VI, infra.
618
court papers as follows : 59 “An undated briefing memorandum for the
President from a Presidential assistant relating to the referenced
meeting.”
The White Paper goes on to say that, in the memorandum, Colson
suggested that the President acknowledge AMPI’s “support.” While
the Select Committee has no way of verifying the accuracy of the
statement, the White Paper assures the public that no suggestion was
made in the memo that the President commit himself to do any “sub-
stantive act.” 60 The White Paper states that no mention of the “as-
serted pledge” was made during the meeting.
It is interesting to note, however, what was said. Parr is certain he
and Nelson told the President that they supported him. In addition
to a reference to another meeting with the President and to AMPI’s
next convention, the President in turn told them : “You people must
have a real good organization. I have heard some very good things
about it.” 61
Colson’s memorandum and the White Paper should be compared
with a recent statement by the President on his knowledge of contri-
butions to his campaign. In a Presidential news conference on October
26, 1973, the President made the following statement with respect to
his knowledge of particular campaign contributions:
In terms of campaign contributions, I have had a rule,
which Mr. Stans and Mr. Kalmbach and Mr. Rebozo and
50 All committee efforts to obtain from the White House further materials have been
unavailing. In Nader v. Butz in the Federal District Court for the District of Columbia, the
plaintiffs subpenaed documents from the White House relevant to the 1071 milk price sup-
port decision. On December 5, 1073, J. Fred Buzhardt, Special Counsel to the President,
filed an affidavit listing the materials covered by the subpena in two categories : Category I
consisted of those items as to which no claim of executive privilege was asserted and copies
of which were provided to the parties ; category II consisted of documents as to which
executive privilege was claimed and copies of which were given to the presiding judge,
Judge Jones, in camera, for his inspection. See White House Document List, 17 Hearings
8094-8107. The judge made no ruling on the applicability of the privilege claim on cate-
gory II documents.
The White House at first assured the committee that it would produce category I
materials to the committee but not category II ; therefore, on Dec. 18, 1973. the com-
mittee subpenaed specifically only category II materials from the President. The President
refused to comply.
Thereafter, the White House refused to produce for the committee even category I
materials. Accordingly, on Jan. 14, 1974, the committee subpenaed plaintiffs’ and
defendants’ counsel for production of the category I materials and, although they declined
to comply because of a previously entered protective order prohibiting release of the
materials except in connection with the lawsuit, on Jan. 30, 1974, plaintiff's counsel
did move before Judge Jones for a clarification or modification of the order to permit him to
comply with the committee’s subpena.
The committee filed a motion for leave to intervene as amicus curiae for purposes of
plaintiff’s motion, which was granted by Judge Jones, and only the White House — not the
parties to the suit — opposed plaintiff’s motion and the committee position. Indeed, as the
committee argued in its brief, there was no applicable privilege or any other tenable basis
to withhold production.
Nonetheless, on March 13, 1974, Judge Jones denied plaintiff’s motion and effectively
blocked the committee’s effort to obtain the materials. Although these nonprivileged
materials had already been denied the committee by the President, Judge Jones stated that
'‘whether the President would refuse to turn over the material is unknown.” Memorandum
and Order at 6, Nader v. Butz (March 13, 1974) (Jones, J.). While conceding that the
materials were not privileged, he stated that he had the obligation to ‘‘consider the integrity
of the criminal process . . . with respect to any resulting indictments involving the issu-
ance of milk price orders in 1971” (Ibid.) — despite the fact that the materials had already
been produced to a private litigant and some of which had even been made public and
no indictments had yet been filed. He apparently concluded that he would take no part in
ruling on compliance with a valid congressional subpena. These court papers are repro-
duced in Part 2 of the committee’s appendix of legal documents. Some of the White House
materials, sought by the committee and publicly released by the House Judiciary Committee
after the drafting of the Select Committee’s report are reprinted in Appendix D to this
chapter.
60 It does not define “substantive act” or state whether there was any suggestion in the
memo that the President commit himself to any matters such as permitting greater access
by the dairy co-ops to the President, scheduling Presidential meetings or Presidential
attendance at dairy conventions, and the like. It should be noted that the Federal bribery
statute refers to “official” and not “substantive” acts. See 18 U.S.C. § 201(a),
61 Parr. 15 Hearings 6796.
619
every contributor will agree has been the rule — I have re-
fused always to accept contributions myself. I have refused
to have any discussion of contributions. As a matter of fact,
my orders to Mr. Stans were that after the campaign was
over, I would then send notes of appreciation to those who
had contributed, but before the election, I did not want to
have any information from anybody with regard to cam-
paign contributions. 62
3 . presidential action on dairy import quotas
One of AMPI’s concerns at the time they met with the President on
September 9 was competition from imported dairy products. In De-
cember 1970, after the $2 million pledge had been discussed with Colson
and communicated to the President, and after the dairy meeting with
the President and additional contacts between dairy leaders and the
administration, the President imposed quotas on certain dairy prdoucts
favorable to the dairy industry.
a. USD A and Tariff C dm/mission Action 63
On March 5, 1970, the Department of Agriculture sent a letter to
the President recommending a study by the Tariff Commission of im-
ports of certain dairy products. On May 13, the President requested
the Tariff Commission to conduct the investigation.
On July 28 and 29, 1970, the Commission held a public hearing
on the matter, at which time the Department submitted its views to
the Commission. In turn, the Tariff Commission made its recommen-
dation to the President in September 1970.
While the matter was pending before the President, the dairy
co-op representatives met with Secretary Hardin on November 19,
and w T ere in contact with William Galbraith, Deputy Under Secretary
of Agriculture on November 20 with respect to the import quota mat-
ter. As noted above the 19th was the same day that Nelson, Parr, Har-
rison, and Hillings were meeting with Colson, Kalmbach, and Evans
to discuss the method of making their $2 million contribution.
b. Hillings' Letter to the President — Import Quotas and the $2 Million
Pledge
Harrison testified that the milk producer's had been waiting for a
Presidential announcement on dairy import quotas for months, but
nothing seemed to be forthcoming. Significantly, Harrison said that
it appeared to them that Colson, their principal White House contact,
was not aiding them in their efforts to secure a favorable decision. 64
Harrison and Hillings, a friend of the President who had succeeded
the President as Congressman from the President’s California district,
apparently decided to take action by writing a letter to the President.
Hillings’ letter dated December 16, 1970, began with the following
discussion of AMPI contact with, and support of, the President :
02 Presidential Documents : Richard Nixon, 1973. p. 1292.
63 The technical material in this subsection is based upon the Response of the U.S. Tarifr
Commission, signed by Kenneth R. Mason, Secretary, to a request by the Select Committee
staff, included at 17 Hearings 8108-11.
64 Harrison, 14 Hearings 6261.
620
This letter discusses a matter of some delicacy and of
significant political impact.
Since January 1, my Washington partner Marion Harrison
(one of your 1968 Virginia cochairmen) and I have repre-
sented Associated Milk Producers, Inc. (“AMPI”). At the
White House in September you privately met AMPI’s two
key leaders, Harold Nelson and Dave Parr. You spoke by tele-
phone from the beach at San Clemente to Secretary Hardin
and to Harold Nelson during AMPI’s annual convention in
Chicago Labor Day weekend. You told Harold of your intent
personally to address AMPI’s next annual convention (a
gathering of almost 30,000 dairy farmers and their families) .
AMPI has followed our advice explicitly and will do so in
the future. AMPI contributed about $135,000 to Republican
candidates in the 1970 election. We are now working with
Tom Evans and Herb Kalmbach in setting up appropriate
channels for AMPI to contribute $2 million for your reelec-
tion. AMPI also is funding a special project. 65
The letter then discussed the import quota matter and urged the Presi-
dent to issue a proclamation adopting the recommendations of the
Tariff Commission. The letter was signed “Pat.”
The $2 million pledge was, of course, already known to the Presi-
dent. Neither Hillings nor Harrison nor anyone else connected with
AMPI or the White House was able to explain the “special project”
mentioned at the end of the third paragraph of the letter. 66
Hillings said that he did not intend that the letter be given to the
President. However, in a memorandum dated December 17, 1970, from
a White House staffer, Roger Johnson, to Haldeman, transmitting the
letter, Johnson wrote: “Pat Hillings handed me the attached letter
and asked that it be directed to the President.” 67
The White Paper states that “President Nixon did not see the let-
ter.” It does not say whether or not the President was briefed on the
contents of the letter — not an unusual practice, as Ehrlichman pointed
out to the Select Committee staff. 68 Haldeman was not able to recall
whether the President received such a briefing. 69 In fact, John Brown,
a White House employee, in a routing memorandum accompanying
the Hillings letter, asked John Campbell (a staff secretary) , “to check
with Ehrlichman and Colson, to see if this should go in and if so, in
what form.” 70
The White Paper states that since the President already knew of
the milk producers’ pledge at the time of the letter, the only possible
relevance of the letter was its effect on the pending import quota mat-
ter. Although verifying the $2 million pledge to the President might
bear on subsequent Presidential action in other areas, such as milk
price supports, the President’s decision on import quotas, alone, would
be reason enough to scrutinize the possible ramifications of the Hil-
05 Nelson exhibit 1, 15 Hearings 6701. The committee obtained a copy of this letter from
John Dean in connection with his testimony before the committee in June 1973.
63 Although the Select Committee was thus unable to ascertain with any certainty what
was meant by the reference to “special project.” AMPI, at Colson’s request, began in
January 1970 providing money to a Washington public relations firm for White House
projects and later paid for the break-in of Dr. Fielding’s office. See Sec. V.C. below.
67 Attachment to Johnson affidavit, 17 Hearings 7937.
68 Ehrlichman. 16 Hearings 7380.
09 Haldeman, 16 Hearings 7162.
70 See Brown memorandum, 17 Hearings 8112. This document was obtained from John
Dean in connection with his testimony before the committee in June 1973.
621
lings letter. It is particularly significant in view of the favorable
Presidential decision on imports that followed 2 weeks after the let-
ter was delivered.
o. Presidential Proclamation on Import Quotas
On December 31, 1970, the President issued a proclamation setting
import quotas on the four dairy items under consideration — low-fat
cheese, low-fat chocolate crumb, animal feed containing milk, and ice
cream.
The White Paper points out that the quota imposed by the Presi-
dent were higher than those recommended by the Tariff Commission.
On the other hand, the White Paper fails to point out three significant
facts :
(1) there had been no quotas on these four items prior to the
proclamation ;
(2) the Presidential proclamation set quotas for each item
substantially below the actual import level for 1970; and
(3) without quotas, the import level of such items would have
continued to increase, according to the Tariff Commission, “at a
rapid rate.” 71
The actual import levels for 1969 and 1970, the recommendations
of TJSDA and of the Tariff Commission and the quotas set by the
President are as follows :
COMPARISON OF ACTUAL AND RECOMMENDED IMPORT QUOTAS FOR CERTAIN DAIRY PRODUCTS n
Actual
Recommendation
1969
1970
USDA
Tariff
Commission
President
1. Low-fat cheese 73 --
3, 000
11, 027
25, 001
100
8,901
2. Low-fat chocolate 73
477
15, 944
17,000
0
4, 680
3. Animal feed containing milk 73 -
9, 693
27, 435
<?>*) .
0
16, 300
4. Ice cream 74
2,688
8, 006
0
0
431
Nelson noted that there was general satisfaction with the Presi-
dent’s proclamation. 75 An AMPI press release, quoting from AMPI
President John Butterbrodt, dated January 5, 1971, on the President’s
import quota decision, concluded: “President Nixon’s decision is a
step toward more stability in our market that will be remembered
and appreciated by dairy farmers.” 76
IY. THE 1971 PRICE-SUPPORT DECISION BY THE PRESI-
DENT, AND DAIRY TRUST CONTRIBUTIONS TO THE
PRESIDENT’S CAMPAIGN
National attention was first focused on the dairy co-ops in 1971
in connection with the possible link between an unusual Presidential
reversal in March 1971 of a milk price support decision by the Sec-
71 See Tariff Commission response, supra .
72 Ibid.
73 In thousands of pounds.
73 a Not specified.
74 In thousands of gallons.
75 Nelson, 15 Hearings 6545.
76 Nelson Exhibit 2, 15 Hearings 6703.
622
retary of Agriculture and substantial dairy trust contributions to
the President’s reelection campaign. As indicated in this report the
1971 decision by the President was just one of a series of favorable
administration actions on the milk producers’ agenda. Likewise, their
1971 contributions were not their only contributions to the President’s
1972 reelection campaign at or about the same time they were seeking
favorable action from the administration.
The 1971 decision may be significantly different, however, from
these other matters. The White Paper demonstrates that the President
himself made the decision after he was reminded by a top aide and
by Treasury Secretary Connally of the political contribution activity
of the dairy lobby.
The dairymen and certain key Congressmen had pressed the eco-
nomic case for a price support increase. The President has conceded
that, nonetheless, the economic justification for an increase was not
a principal consideration in his decision. Rather, he says he made the
decision in light of Democratic congressional pressure, to assure him-
self of the dairymen’s support in his upcoming reelection bid.
The President’s explanation ignores certain key events contempo-
raneous to his decision uncovered by the Select Committee which
shed light on the type of “support” undertaken by the dairymen.
Two days passed between the time the President announced his de-
cision to his top aides on the afternoon of March 23 and the time the
increase was announced on March 25. In the interim, a series of meet-
ings and telephone calls took place, initiated by White House officials
and, at least in the case of the first meeting, at the direction or with
the knowledge of the President, himself. Although administration and
dairy officials deny that, there was any quid fro quo expressed, the
apparent thrust of this activity Avas to notify the dairymen that a
price support increase announcement was imminent and to link —
at the direction of one of the President’s top aides, John Ehrlich-
man — that announcement to substantial dairy contributions includ-
ing the reaffirmation of the $2 million pledge to the President’s
campaign.
The dairymen obliged. Representatives of the lead co-op, AMPI,
first secured commitments from two other dairy co-ops, Mid-Am and
DI. This arrangement Avas confirmed at a late-night meeting on the
24th — arranged bv Ehrlichman on the 23d and attended by AMPI’s
leader, Harold Nelson, his attorney and Nixon associate, Murray
Chotiner, and the President’s personal attorney and chief fundraiser,
Herbert Kalmbach. At the meeting, Kalmbach was informed that the
reaffirmation of the $2 million pledge had already been made and
been linked to the announcement. The next day the increase was
announced.
That $2 million constituted one of the three largest and earliest
commitments to the President’s reelection campaign and a full 5 per-
cent. of his projected reelection budget. Moreover, it apparently was
promised to be made in month 1a - installments of $90,000 beginning
on April 1, 1971 (the effective date of the price increase) at a time
when the President trailed Senator Muskie by a full 5 percentage
points in a leading Presidential poll.
In the davs and AA-eeks that folloAved the President’s decision, prep-
arations Avere finally made to begin contributing the first $250,000
623
committed. While the dairymen widely boasted of the success of their
contribution activity in securing the Presidential increase, USDA
officials — both career employees and political appointees — were shocked
and demoralized by the fact and the manner of the reversal by the
President.
The discussion of these matters will be presented as follows :
• The decisionmaking process of the Department of Agriculture
leading to the Secretary’s March 12, 1971, decision not to raise
the support level, and thereafter until March 23, when the
President reversed the Secretary and took steps to raise the
support level (section I Y. A.) ;
• Contacts prior to March 23 between the milk producers and
the Department of Agriculture, Members of Congress, the
AVliite House (including the President, Ehrlichman, Colson,
and other Presidential assistants) and Treasury Secretary
Connally (sections IY.B. toE.) ;
• The events on March 23, including several meetings involving
the President that took place on that date (section IY.F.) ;
• The events on March 24, including pledges to the President’s
campaign and meetings arranged by Ehrlichman — one attended
by himself and Kalmbach, and another by Kalmbach, Nelson,
and Chotiner (section IV.G.) ;
• The March 25 announcement of the President’s decision and
its aftermath (section IV.H.) ; and
• An analysis of the White House justification of the President’s
decision (section IY.T.) .
A. The Department op Agriculture Decisionmaking Process
Prior to March 23
The Department of Agriculture was presented with dairy industry
arguments that a milk price support level of 85 or 90 percent of parity
was economically justified. Nonetheless, after several months of de-
liberation and review at all levels of the Department and other inter-
ested agencies, all in accordance with customary and detailed pro-
cedures for such matters, the Secretary of Agriculture announced on
March 12, 1971, that he would maintain the milk price support level
for the April 1, 1971-March 31. 1972 marketing year at 80 percent.
Eleven days later, on March 23, the President reversed the Secretary’s
decision and decided to raise price supports to 85 percent without any
notice to or consultation with some of those in the Department nor-
mally involved in such determinations.
1. THE MARCH 12 DECISION
The March 12, 1971 decision was made pursuant to the statutory
framework for the Federal milk price support program.
a. Statutory Background
The goal of the Federal milk price support program is “to assure
an adequate supply” of milk. 77 To accomplish this, the Secretary of
77 Section 201 of the Agricultural Act of 1949, as amended in 1970, and applicable in 1971
provides as follows :
The price of milk shall be supported at such level not in excess of 90 per centum nor
less than 75 per centum of the parity price therefor as the Secretary determines neces-
sary in order to assure an adequate supply. Such price support shall be provided
through purchases of milk and the products of milk. (7 U.S.C. 1446.)
35-687 0 - 74 - 41
624
Agriculture is directed by statute to establish each year a milk price
support level, or minimum price, which the Government assures that
dairy farmers shall receive for their milk used in the manufacture of
milk products (manufacturing milk).™ To assure that milk prices
do not fall below that level, the Federal Government, through the
Commodity Credit Corporation, (CCC) a part of the Department of
Agriculture, purchases milk products (butter, cheese, and dry milk)
in the open market when their prices fall to the support level price.
By offering to buy at the support price all excess production of man-
ufacturing milk, the Government thereby maintains milk prices at no
lower than the support level. In theory, such an assured minimum
price will call forth sufficient milk production to meet the statutory
goal of “an adequate supply.” 79
The statute restricts the price at which the Secretary may set the
support level. The restriction is linked to farmer purchasing power.
This relationship is known as “parity.” Perhaps the simplest defini-
tion of parity was provided by the USDA’s chief economist, Dr. Don
Paarlberg, who essentially defined it as follows : If a gallon of milk
would buy a pair of overalls in the base period, then to be at 100 per-
cent of parity, the price of a gallon of milk should be enough to buy
a pair of overalls now. 80
The parity price concept was first recognized by Congress in the
Agricultural Adjustment Act of 1933. The base period is 1910 to
1914. 81 Under section 201 of the Agricultural Act of 1949, as amended
in 1970 — the applicable statute for the 1971 marketing year — the
Secretary was permitted to set the support level at no more than 90
and no less than 75 percent of parity.
The support level is announced as a dollar-and-cents amount for
a hundredweight (or 100 pounds) of whole milk. For example, in
March 1970 — the year before the controversial decision — the price
support level was raised from $4.28 to $4.66 per hundredweight of
milk which was 85 percent of parity.
Section 406 of the 1949 act requires the Secretary, insofar as prac-
ticable, to announce the level of support for milk “in advance of the
beginning of the marketing year or season.” 82 Thereafter, monthly
parity prices for milk are computed pursuant to 7 U.S.C. 1301(a)
(1). The price support level may be raised at any time during the
marketing year ; but once announced, the level of support may not be
reduced for the duration of the marketing year. Therefore, the Secre-
tary may decide not to increase price supports at the start of the year
and then, if circumstances change later in the year and warrant an
increase, he can grant it at that time.
b. Preparation for the March 12 Decision
The official recommendation for a price support level usually is
drawn by the Livestock and Dairy Division of the Agricultural Sta-
bilization and Conservation Service (ASCS) of the Department of
78 The price of drinking milk is not directly supported, but is usually slightly higher than,
and to a substantial extent dependent upon, the price of manufacturing milk.
79 For example, a higher price for milk will tend to cause farmers to reduce the number
of cows to be slaughtered for beef, while a lower price may encourage farmers to sell their
cows for beef.
80 See Paarlberg, 16 Hearings 7514—15.
81 See Paarlberg, 16 Hearings 7515.
82 7 U.S.C. 1426.
625
Agriculture. 83 Based on economic estimates provided by the Inter-
agency Dairy Estimates Committee 84 and the USDA Department of
Agricultural Economics, the ASCS drafts its recommended decision
in the form of a docket, which also contains the justification for the
recommendation. The docket is then passed up the line before going
to the CCC Board of Directors for approval and undergoes “pre-
Board clearance” by others in USDA. If it is approved by the CCC
Board (usually with the acquiescence of the Secretary, who is a mem-
ber of the Board), the recommended decision then goes to the Sec-
retary for final action.
The USDA decisionmaking process which led to the setting on
March 12 of the 1971-72 milk price support level appears to have been
normal in every respect. The process began, as it usually does, a number
of months prior to April 1, 1971. On September 25, 1970, Keister
Adams, Deputy Director of the Livestock and Dairy Division, wrote
a memorandum to Carl Farrington (now deceased), Deputy Adminis-
trator of Commodity Operations, recommending keeping the support
price level at the $4.66 level established the previous March. 85
In the following months, the interagency committee reviewed esti-
mates of milk production and consumption at 75, 80, 85, and 90 per-
cent of parity and at $4.66 upward in 5-cent increments. 88 It was the
unanimous feeling of the committee that the $4.66 support level should
be retained for 1971-72. This conclusion is reflected in a memorandum
sent to Kenneth Frick, Administrator of the ASCS, on January 7,
1971. 87 The reasons stated in this memorandum concerned recent in-
creases in milk production and the prospect that an increase in the
support level would increase surpluses and costs to the CCC.
Dr. Don Paarlberg, Director of Agricultural Economics at USDA
and the Department’s chief economist, was in complete agreement
with this recommendation. Dr. Paarlberg served at the USDA in the
Eisenhower administration (1953-58) as assistant to the Secretary
and as Assistant Secretary. He was also Special Assistant to Presi-
dent Eisenhower for economic affairs, with special responsibility in
agriculture. In 1971, it was his function as chief agricultural economic
advisor in the Agriculture Department to report to and advise the
Board of the CCC and the Secretary of Agriculture on actions such
as the determination of milk price support levels.
In their deliberations, the experts considered the arguments ad-
vanced by both industry and congressional leaders to justify a price
support increase on economic grounds. By early 1971, rising costs to
farmers (including feed costs resulting from a corn blight in 1970)
had caused the $4.66 level to fall from 85 percent to approximately
80 percent of parity, perhaps endangering farmer income and milk
supply. However, Paarlberg and others were concerned that since
production of dairy products was rising, further increase in the price
83 An organization chart of the relevant divisions in the Department in March, 1971 is
included at 17 Hearings 8113.
84 In 1971, the committee was composed of members of the Economic Research Service of
USDA and members of the ASCS. the Foreign Agricultural Service and Export Marketing
Service. Its economists included Sidney Cohen, Chief of the Program Development Branch
of the Livestock and Dairy Division, his chief aide. S. E. T. Bogen, USDA Economics and
Statistical Analyst Anthony Mathis and Keister Adams, Deputy Director of the Livestock
and Dairy Division, as chairman.
88 Adams memorandum, 17 Hearings 8114—16.
86 Several of these studies still in existence are included as Exhibit B to the Cohen
Affidavit, 17 Hearings 7866-72.
87 Farrington memorandum, 17 Hearings 8117-26.
626
support level might stimulate production, reduce consumption, and
be excessively costly to the Government.
Moreover, departmental experts did not believe that a reduction in
the parity level necessarily signaled a fall in farmer income. Paarlberg
pointed out to the Select Committee that greater productivity of dairy
farmers, experienced in recent years, has olfset a decrease in parity, so
that farmer income has remained constant or has risen. 88 In terms of
the statute, the Department of Agriculture did not consider an increase
necessary to “assure an adequate supply.”
Based on these recommendations and considerations, and after con-
sultation with his superiors, Livestock and Dairy Division Director
Reuben Jones and Keister Adams, Sidney Cohen, who had responsi-
bility for preparing the docket, did so, recommending the $4.66 figure
and supporting it with a four-page justification. The docket was
approved by Jones, Kenneth Frick, Administrator of ASCS and
Executive Vice President of CCC, and the General Counsel and
Budget Division of USD A.
The docket was then ready for CCC Board action. Fully cognizant
of the arguments advanced by the dairy co-ops and Members of Con-
gress in favor of an increase, Board members, including Secretary
Hardin, Under Secretary J. Phil Campbell, Assistant Secretaries
Clarence Palmby and Richard Lyng, and Frick and Paarlberg, appear
to have unanimously favored the $4.66 level. At its meeting on March 3,
1971, the Board approved the docket.
Secretary Hardin has stated in a sworn affidavit that the March 12
decision “was the subject of major controversy even before it was
made.” 89 The Select Committee has found no corroboration for this
statement with respect to those within the Department, including the
Secretary, who unanimously favored maintaining the existing price
support level.
Under Secretary J. Phil Campbell has stated to the Select Commit-
tee staff that, to bis knowledge, there was no major controversy in
deciding upon the March 12, 1971, price support level. Further,
Palmby, Secretary Hardin’s liaison to the ASCS, has testified that
although Secretary Hardin may have “anguished” over the decision,
Palmby was not aware of any substantial controversy within the
Department of Agriculture as to the price support levei. 90 Similarly,
no other USDA employee or official corroborated Hardin’s account.
Whatever his “anguish,” Hardin opposed an increase on economic
grounds. Dr. Paarlberg, a longtime friend and associate of Hardin,
testified that he believed Hardin — in addition to issuing the March 12
decision— fully supported it. 91 This is consistent with the President’s
own statement that Hardin told the President in early March that the
price of $4.66 was high enough and should not be raised. 92
88 Paarlberg, 16 Hearings 7527.
„ 88 b n , h i s A2!! a 7 it .? lp , rt wlth the Clerk of the District Court of the District of Columbia on
March 13, 1972, in Nader v. Butz, Hardin stated as follows :
The initial determination of the level of price supports for milk as announced on
Mar. 12, 1971, was the subject of major controversy, even before it was made 17
Hearings 7917.
00 Palmby, 16 Hearings 7133.
01 Paarlberg, 16 Hearings 7516.
92 See Section IV.C.l (b). below.
627
c. The March 12 Decision
On March 12, 1971, the Department announced Secretary Hardin’s
decision to retain the price support level at $4.66. In the announcement,
he noted that some dairymen favored an increase. 93 He stated, however,
that in 1970. he had granted the largest increase ever at the beginning
of a marketing year and that production had subsequently risen. He
went on to say :
[A] fter careful review of the situation and the provisions
of the law, Secretary Hardin declared that he felt today’s
action was in the long-term best interests of the dairy
producers.
The longtime well-being of dairymen . . . requires that
prices be kept at levels which will permit the overwhelming
proportion of milk to clear through commercial markets.
Dairymen, like all farm producers, are faced with increased
costs. But they know from past experience that they do not
benefit when dairy production substantially exceeds demand
and excessive surpluses pile up in Government warehouses.
We must avoid this. 94
In the same press release, the Secretary also announced two actions
favorable to the dairy industry that had been sought by industry
leaders : The Department was going to undertake additional purchases
of cheese for USDA food programs by which the market price for
milk was expected to be “strengthened.” In addition, it was announced
that the President had directed the Tariff Commission to conduct an
“immediate investigation” of certain cheese- imports with a view to
limiting foreign competition for domestic cheese.
2 . USDA INACTION FROM MARCH 1 2 TO MARCH 2 3
The USDA decisionmaking processes for setting milk price supports
in March 1971 ended with the March 12 decision. In fact, except for a
few meetings with dairy leaders, no one at the Department, other than
Secretary Hardin and Under Secretary Campbell, took any part in a
reconsideration of the matter between March 12 and March 23, when
the President made his decision.
Assistant Secretary Palmby has sworn that there was no awareness
or feeling on his part that the price-support level announced on March
12 would be changed and that he was not aware before March 23 of
any discussions toward raising the price-support level at the Depart-
ment of Agriculture. 95 Palmby summarized his role by stating : “I was
part of the March 12 announcement. I was not part of the later an-
nouncement.” 96 In a similar vein, Assistant Secretary Richard Lyng
has told the Select Committee staff that his first knowledge of the re-
versal came shortly before the reversal was announced on March 25,
93 Land-O-Dakes, for one, had opposed an increase.
94 March 12 USDA press release, part of exhibit A to Cohen affidavit, 17 Hearings 7852.
95 Palmby, 16 H earings 7138.
98 Palmby, 16 Hearings 7145.
628
when he was asked to prepare a press release announcing the new
level.
Lyng and Palmby’s versions, received by the committee in October
1973 and January 1974, directly conflict with Secretary Hardin’s pre-
viously noted affidavit, in which he stated :
During the course of reevaluating the evidence, I had dis-
cussions and advice from members of my staff, including
Under Secretary Campbell, Assistant Secretary Lyng, and
Assistant Secretary Palmby. 97
As late as March 22, 1971 — the day before it was reversed — Under
Secretary Campbell was publicly backing the March 12 decision. Tn a
speech on that date in State College, Pa., he emphasized the dangers of
overproduction in the milk market. He stated :
T must urge dairymen not to be their own worst enemies and
push for higher supports at this time. Let’s watch the situa-
tion carefully for the next few months until we get a clearer
picture as to whether a new trend of increased production is
becoming established.
Paarlberg testified that on March 22 or 23 he congratulated Camp-
bell on the speech. Only then did Paarlberg receive some inkling of
a possible reversal when, according to Paarlberg, Campbell replied :
“It might not stick.” 98 To Paarlberg’s knowledge, no one at ASCS or
in Agricultural Economics had been consulted between the 12th and
that time. All ASCS and other USDA officials and employees inter-
viewed by the Select Committee corroborated this.
In fact, those principally responsible for securing a Presidential
reversal were affiliated with the milk producers’ lobby, certain Mem-
bers of Congress and, ultimately, the Treasury Secretary and the
White House.
B. Milk Producers’ Activity Prior to March 23
The milk producers’ strategy to secure a price support increase for
1971 was essentially twofold: to try to convince officials at the De-
partment of Agriculture to grant the increase, and to enlist the support
of Congress in securing an administrative increase; if that failed, to
try to secure a legislative increase. As discussed below, the first part
of the strategy failed when Secretary Hardin denied any increase
on March 12 ; the second was partially successful up to a point, but
was then abandoned when a Presidential increase was secured.
1. PRESENTATIONS TO USDA
a. Pre-March 12
According to Mid-Am’s official, Gary Hanman, the systematic effort
by the dairy industry to secure price support increases dated back to
at least 1964 or 1965. 99 Those efforts usually included the preparation
by industry economists and submission to USDA of economic data
supporting an increase.
07 Hardin affidavit, 17 J Hearings 7918-19.
08 Paarlberg, 16 Hearings 7521.
09 Hanman, 14 Hearings 5869.
629
In that regard, the effort for a 1971 increase was no different than
in the past. In late 1970, several months before the scheduled decision,
economists for the dairy co-ops began preparing an economic presenta-
tion in their effort to obtain a price support level at 90 percent of
parity. The dairy co-ops also encouraged and supervised an extensive
campaign of letterwriting by dairy farmers to the USD A requesting
an increase in price supports.
Contributing to these studies in 1971 w r ere Parr’s staff economists,
including Tom Townsend. 1 The document was reviewed and edited by
Dr. George Mehren, 2 who had been a consultant to AMPI after leaving
his post as an Assistant Secretary at the Department of Agriculture
in 1968.
The principal submission, entitled “The Dairy Industry and the
Public Interest : The Need for a Price Support Increase,” dated Febru-
ary 24, 1971, and signed by Associated Dairymen (an amalgam of the
three co-ops) 3 was presented to Secretary Hardin and Under Secretary
Campbell by Nelson, Parr, and Hanman in a meeting prior to the
March 12 decision. 4 Both in the written document and in their oral
briefings of these and other USD A officials, the co-op leaders pre-
sented all their principal economic arguments for an increase including
one based on a rise in feed costs to farmers and a drop in farmer in-
come. 5 As noted above, USDA officials and the Secretary, in his
March 12 announcement, took into consideration the arguments relat-
ing to increased feed and other farmer costs before deciding that a
price increase was not merited.
b. March 12-23
Following the Secretary’s March 12 decision, Hanman and others
met on March 15 with Secretary Hardin and “his staff” at USDA 6
where Hardin defended his decision and stressed what he believed to
be the additional cost to the Government of the requested increase. 7
Hanman, in his testimony in executive session before the Select
Committee on November 13, 1973, acknowledged that the co-ops had
already presented to USDA prior to March 12 all relevant economic
data justifying an increase in their possession and that, there was
nothing new to submit in their meeting on the 15tli. 8 Hanman said
that they tried to prevail upon USDA officials to change their minds. 9
The Department officials, fully familiar prior to March 12 with the
position and arguments of the dairy co-ops as well as of Members of
Congress, apparently were not moved by these industry efforts. In
fact, the Select Committee uncovered no evidence of any departmental
review of the economic data bet ween the 12th and the 23d.
2. EFFORTS TO SECURE CONGRESSIONAL SUPPORT
The dairy leaders had, throughout the early months of 1971, also
devoted substantial effort to securing congressional support with the
1 Townsend. 14 Hearings 6304-05.
2 Mehren, 16 Hearings 7233-34, 7240.
3 Townsend exhibit 3, 14 Hearings 6332-62.
4 Hanman. 14 Hearings 5871.
5 Parr, 15 Hearings 6801 ; Townsend Exhibit 3, pp. 8-9, 14 Hearings 6340, 6343.
6 Hanman, 14 Hearings 5872.
7 See Hanman letter, 17 Hearings 8127.
8 Hanman, 14 Hearings 5872-74.
9 Hanman, 14 Hearings 5874.
630
object of bringing pressure to bear on the administration for an
administrative increase. The co-op leaders organized letterwriting cam-
paigns of their member farmers to their Congressmen and Senators
resulting in an outpouring of thousands of letters urging a 90 percent
price support level. Visits by hundreds of dairy farmers to their Con-
gressmen and Senators were also arranged. 10 Many of the Members
of Congress contacted passed their constituents’ requests on to TJSDA.
In addition, between the end of January and March 23, the date of the
President’s decision, 29 Senators and 88 Congressmen expressed their
views to the administration by correspondence primarily to the De-
partment of Agriculture, virtually all requesting an increase in the
price support level to 90 percent of parity.
AMPI, DI, and Mid-Am were the “prime movers” in these efforts 11
and their leaders took a leading role. Bob Lilly was one of those prin-
cipally responsible for this effort. 12 Drawing on his political experience
at the State and congressional level, Lilly helped direct the program
of co-op employees and members contacting those Members of Con-
gress with whom they were familiar.
Prior to March 12, the principal aim of these contacts was to gain
congressional support in convincing the administration to grant an
increase. On February 10, 1971, Nelson, Parr, and Townsend of AMPI
met with Speaker Albert, Congressmen Mills, and John Byrne (R.,
Wis.), William Galbraith (USDA congressional liaison) and Clark
MacGregor (Counsel to the President for Congressional Relations)
in the Speaker’s office. 13 They discussed three or four substantive pro-
grams, including price supports. 14 Presumably, one of the purposes
of the meeting was to indicate to the administration the industry and
congressional support for a price support increase.
Speaker Albert and Congressman Mills communicated their views to
other administration officials, as well. Connally testified that he spoke
with Mills several times about this matter. 15 The Director of the Office
of Management and Budget, George Shultz, told the Select Committee
staff in a November 21, 1973, interview that Mills contacted him
twice prior to March 12 to argue that an increase would not lead to
overproduction. 16 According to Shultz, he received a similar message
from Speaker Albert sometime after March 12.
Thus, the administration was aware, prior to March 12, of congres-
sional support for a price support increase to as much as 90 percent of
parity. Nonetheless, based on a careful review of the statutory criteria,
the Secretary refused to grant an increase.
Following March 12, the efforts of the dairy industry on the Hill
increased. Between March 12 and 23, bills to raise the support level to
a minimum of 85 percent for 1 year beginning April 1 , 1971, were intro-
duced and sponsored by a total of 88 Congressmen and up to 29 Sena-
tors, mostly from farm States. Two Congressmen introduced bills to
10 Nelson, 15 Hearings 6551-55 ; Mehren, 16 Hearings 7233,
11 Nelson, 15 Hearings 6552.
12 Lilly. 14 Hearings 5985.
13 The White Paper discusses the meeting, but omits any reference to the presence of
Townsend. However, he testified that he was present. Townsend, 16 Hearings 7118.
14 Townsend, 16 Hearings 7119.
13 Connally, 14 Hearings 6087.
16 Shultz sent a memo to Ehrlichman notifying him of one of the Mills calls. Shultz memo-
randum, 17 Hearings 8128. However, Shultz says he was still convinced that an increase
was not warranted.
The White Paper states that “ [according to Mr. MacGregor’s records. Congressman
Mills urged him six times in February and early March to urge the President to raise the
support level.” White Paper, 17 Hearings 8076.
631
raise the support level to 90 percent. A more detailed analysis of the
extent of such congressional activity is presented below in section IV. I;
Before any hearings were held on these bills, the President reversed
the Secretary’s March 12 decision, granting the same relief as did most
of the pending legislation — 85 percent for 1 year. (In fact, as explained
in section IV.I.ld, the President’s action was more favorable to the
industry than was the proposed legislation.) Even before the actual
reversal, however, there is evidence, discussed below, that AMPI, be-
cause of communications with the White House and other top officials,
had abandoned its effort to secure legislation and focused on its effort
to secure an administrative increase — from the President.
Before turning to these matters, a comment is in order with respect
to the milk producers’ contacts with Members of Congress. The White
Paper notes that many of the Senators and Congressmen who sup-
ported milk price legislation in 1971 received contributions from the
dairy industry in 1972. The White House offers no evidence and does
not argue that there is any direct connection between the introduction
of such legislation and these contributions, which were made more
than a year after the 1971 decision and which were publicly filed. In-
deed, as the White Paper admits, the dairy industry also contributed to
Senate and congressional candidates who did not sponsor such legisla-
tion. 17 In any event, whatever the reasons for congressional contribu-
tions either before or after March 1971, the fundamental questions to
which the White Paper — and the Select Committee’s mandated investi-
gation — are addressed, remain : Was the President’s decision “influ-
enced” by or made in contemplation of contributions by the dairy
industry to bis 1972 Presidential campaign ? Were the dairy contribu-
tions solicited, made or received by the President’s aides, campaign
officials and/or the dairy lobby “for or because of” the price support
decision ? 18 If so, did the President solicit or accept the dairy contribu-
tions with the knowledge that, they were made for that reason, no mat-
ter what the basis for the President’s decision?
C. White House Involvement Prior to March 23
In the Nixon administration, there was a standing instruction from
the President: With respect to any major commodity decision by the
Department of Agriculture, such as setting the milk price support
level, there was to be no final decision without review of the proposed
decision by the Office of Management and Budget (OMB) and the
Council of Economic Advisers (CEA) at least 10 days prior to the
public announcement. 19 In the case of Secretary Hardin’s March 12
announcement, such review was undertaken. In addition, top Presi-
dential advisers, as well as the President himself, were involved in the
decisionmaking process both prior to March 12 and between March 12
and 23.
1. MARCH 12 DECISION
a. OMB and CEA Bevieio
Consistent with the President’s rule. Secretary Hardin’s proposed
decision was forwarded on or about March 1, 1971, to Dr. Don Bice,
17 In 1972, for example, the dairy trusts contributed approximately $293,000 to co-
sponsors of price support legislation, but at least another $500,000 to committees for con-
gressional candidates without regard to their sponsorship of such legislation.
™See 18U.S.C. § 201 .(c), (f).
19 Rice Interview, March 4, 1974.
632
Assistant Director of OMB with responsibility for USD A and several
other departments and agencies. Rice assumes that he received the pro-
posed decision, plus supporting material, from Hardin, Campbell or
Palmby. Rice said that he presumably sent a copy of the material to
Gary Seavers, his counterpart at CEA (and now a Council member).
According to Rice, he wrote a memorandum, probably dated March
3, 1971, 20 recommending no increase in price supports. CEA was in
agreement. Apparently, Shultz asked Rice for more information and
on March 5, Rice wrote a follow-up memorandum in which he strongly
supported Hardin’s position. 21 He noted in the memo that Hardin and
Campbell were also in favor of holding the line, although Hardin
was a bit “skiddish” — not because of the economic arguments but be-
cause of the political pressure being exerted by the co-ops. As a result,
Hardin wanted the President himself to approve the decision. Rice
sent copies of his memorandum to Ehrlichman and other Presidential
assistants, presumably including John Whitaker, an aide to Ehrlich-
man with the title of Assistant Director to the Domestic Council for
Natural Resources and the Environment (including agriculture).
b. Presidential Review
On the basis of the evidence gathered by the Select Committee, it
appears that the President was consulted and did approve Secretary
Hardin’s proposed decision hot to raise the support level. Ehrlichman
stated to the Select Committee staff in a February 8, 1974, interview
that he assumes the President was briefed on the proposed decision.
Ehrlichman explained : “That’s ordinarily the kind of thing that ordi-
narily he would be told about.” 22
Rice stated that based on several factors he believed that the Presi-
dent approved the proposed decision before it was announced. First, a
Cabinet officer’s request (such as Hardin’s) for Presidential review
would ordinarily be honored. Second, two documents identified by the
White House indicate direct Presidential involvement — one from
Shultz to the President, dated March 9, and the other from Shultz to
the White House staff secretary, dated March 20, reporting on a
meeting with the President of March 5, 1971 with various government
officials and covering a wide variety of subjects, one of which related
to dairy prices. 23
The President himself has confirmed that he was directly involved
in the first decision. In his press conference of November 17, 1973, at
the conference of AP managing editors, the President stated the
method in which the decision was made. He said in part :
I will tell you how it happened. I was there. Cliff Hardin, in
the spring of that year, came in and said, “The milk support
20 Memorandums between OMB, CEA, and White House officials during March 1971, are
listed in the White House Custodian of Records’ affidavit in Nader v. Buta, 17 Hearings
8094-810.7. As described above, the President has refused to comply with a Select Committee
subpena for these documents. After the preparation of the Select Committee’s Report, copies
of these documents were released by the House Judiciary Committee and are included in
appendix D to this report.
21 In particular, Rice told the Select Committee staff that increased productivity offset
rising prices and obviated the need for an increase in the support price. Although the dairy
industry and certain Members of Congress disagreed, this view was consistent with Paari-
berg s (and the entire Department’s) economic analysis. See section IV.A.l.b., supra.
22 Ehrlichman, 16 Hearings 7381.
23 Items 29 and 57 in the White House list of documents, 17 Hearings 8101, 8105. After
the preparation of the Select Committee’s Report, copies of these documents were released
by the House Judiciary Committee and are included in Appendix D to this Report.
633
prices are high enough.” I said, “All right, Cliff, that is your
recommendation, the Department of Agriculture?” He said,
“Yes.” 24
Apparently, then, as of March 12, there was unanimous agreement
among Secretary Hardin, his entire staff, Director Shultz and his
staff, CEA and the President that milk price supports should not be
raised in March 1971.
2. MARCH 12-2 3
With Hardin (but not the President) publicly committed to no price
support increase, AMPI considered that the best chance for an ad-
ministrative increase lay with the White House and the President. Of
significant help to AMPI in contacting top White House officials, such
as John Ehrlichman, was Murray Chotiner.
a. Murray Chotiner
Murray Chotiner w T as a long-time friend and political adviser
to the President. He became, in 1969, General Counsel to the Special
Representative for Trade Negotiations in the White House and, in
January 1970, Special Counsel to the President. 25
Chotiner stated that, in 1970, Harrison introduced some co-op lead-
ers to him, but that they did not discuss any substantive matters or
the subject of political contributions with him while he was in the
White House. It appears, however, that Chotiner was involved in dairy
efforts in the areas of import quotas and price supports while on the
White House staff. Nelson believes they discussed one or both matters
with Chotiner. 26 Moreover, the Select Committee has received testa-
mentary and documentary evidence that dairy documents on import
quotas were circulated to Chotiner in 1970 prior to the President's fa-
vorable decision. 27
On March 5, 1971, Chotiner left the White House and, on March 8,
became “of counsel” to Reeves and Harrison becoming, with Harrison,
the milk producers’ key representatives to the White House on price
supports. At the same time, the firm’s annual retainer from AMPI was
increased from approximately $40,000 to approximately $108,000, in
part to pay Chotiner’s salary. In addition, AMPI agreed to pay some
of the costs of Chotiner’s office furniture and fixtures. 28
Chotiner stated that he spoke to Ehrlichman at the Gridiron Club
dinner on March 13, as well as to Whitaker, Colson, and Cashen be-
tween March 12 and 25. At the same time, Harrison sent letters to Col-
son and Whitaker.
Their message was primarily political. Chotiner told each White
House official that the President had to carry the Midwest to win the
next election. He added that the farm vote was necessary to carry the
Midwest and that the administration therefore had to do what was
24 Presidential Documents : Richard Nixon, 1973, at 1355. .
Mr. Chotiner died on January 30, 1974, before the Select Committee was able to take
Mr. Chotiner’s testimony in executive session. Summaries of staff interviews on December 7
and 10. 1973. with Mr. Chotiner are included as Exhibits to the Weitz Affidavit, 17 Hearings
8002-11. In those staff interviews. Chotiner revealed for the first time to Watergate investi-
gators the fact of his meeting with Colson on March 23 and the March 24 meeting with
Kalmhach and Nelson. See sections IY, P. and G., below.
20 Nelson. 15 Hearings 6555.
27 Townsend, 14 Hearings 6297 ; Townsend Exhibit 1, 14 Hearings 6328.
28 Garrison, 14 Hearings 6249.
634
necessary to satisfy the farmers. Since the Democrats in Congress
were supporting a price support increase, he contended that it would
be silly for the administration to sit back and let the Democratic
Congress take credit for an increase.
Harrison wrote a letter, dated March 19, to Whitaker on the subject
of “85 percent of Parity for Dairy Industry April 1, 1971.” After
some background information, Harrison set forth the following con-
siderations :
Economic considerations. This is a political question and
requires a political answer. To more than review economic
considerations is dangerous. However, there is no economic
problem. USDA’s own figures show that total dairy product
consumption increased 1.6 percent during the third quarter
1976 over the third quarter 1969 and increased 0.8 percent in
the fourth quarter 1970 over the fourth quarter 1969. USDA’s
figures show further that consumption dropped in 1968 and
1969 and then dramatically turned around, rising 0.4 percent
in 1970. Thus, the contention that maintaining 85 percent of
parity would result in over production and decreased con-
sumption is proved erroneous by use of USDA’s own figures.
In addition, for the past 7 years, USDA’s figures have had to
be adjusted about 6 months after their publication, the ad-
justment usually resulting in higher consumption and lower
production figures. Hence, the announced increase for the
third and fourth quarters of 1970 is very likely actually to be
greater when the final figures are analyzed.
Political considerations. Dairy industry leadership has
been very materially assisting the Nixon administration tan-
gibly and intangibly. Farmers voted Democratic in 1970,
principally on economic grounds. Since then the Administra-
tion was beginning to project a more decisive pro-agricul-
ture image. To reduce parity now is to undo the good which
was being done. To reduce parity now and then attempt to
increase it effective April 1, 1972 is political dynamite be-
cause (1) the purpose would be transparent and (2) the in-
crease at that time would result in a price increase to con-
sumers (which it would not if parity were set at $5.05 for
April 1, 1971 and continued at $5.05 for April 1, 1972). The
increase — if there is to be one — must come, or at least be
announced, within the next few weeks. There is strong Demo-
cratic support on the Hill, apparently led by Speaker Albert,
to legislate 85 percent. This may be in attempt to sandbag
the President, ruining him with dairy farmers if he opposes
or vetoes the bill, giving the Democrats credit if he signs it
or administratively raises parity. Ironically, until March 12,
the dairy industry has gotten from this Administration sub-
stantially what it wanted although, unfortunately, always
after a vigorous effort.
The letter concluded :
Conclusion. For political, if no other reasons, parity must
again be set at 85 percent, even if the President has to do
it. The President's name , not the Secretary's is on the ballot. 29
20 Nelson Exhibit 8, 15 Hearings 6715. (Emphasis in the original.)
635
In a letter to Colson, Harrison assured him that 85 percent of parity
was, except for cheese purchases, “the last major item the industry
will request for some time to come. 30
Later in March, Chotiner figured in a key call to Nelson and a meet-
ing linking milk producer contributions to the announcement of the
President’s decision. (See Sections IV. F and G, below.)
b. John Ehrlichman
Ehrlichman was the President’s Chief Advisor for Domestic Af-
fairs. Ehrlichman stated that Whitaker probably brought the price
support matter to his attention prior to March 12. He was, as we have
already discussed, also aware prior to 1971 of the $100,000 political
contribution by the milk producers in 1969.
Ehrlichman’s dual role as an advisor both on the substantive policy
question of the milk price support decision and campaign activities
continued during the March 12 to 28 period. His discussion with
Chotiner on milk price supports took place on the 13th. 31 The previous
day, the 12th, his logs indicate that he lunched with Kalmbach and
on March 18, his logs indicate two meetings on “campaign spending,”
with several individuals including John Dean.
( 1 ) Meeting on March 19
On March 19, Ehrlichman held a meeting in his. office, attended
by Hardin, Shultz, Whitaker, Rice, Cashen, and Richard Cook (a
White House congressional liaison), to discuss the milk price support
decision in the face of industry and congressional pressure for an in-
crease. The discussion apparently included reference to contributions
and the scheduled March 23 meeting between the President and dairy
leaders.
A briefing paper for the meeting (written by either Rice or Whit-
aker) had been prepared and distributed. 32 Ehrlichman stated that,
whether or not it was mentioned in the document, there was a discussion
at the meeting of interest group politics and congressional politics,
although he could not remember anything more specific. 33
Furthermore, according to Cashen, there may have been some
statement at the meeting that if the decision were negative, the con-
tributions from the milk producers might not be forthcoming. Cashen
hastened to add, in the staff interview, that no one present at the
meeting appeared concerned about the contributions. 34
By the 19th, the meeting between the dairy leaders and the Presi-
dent on the 23d had already been scheduled. 35 There was a discussion
at the March 19 conference of the upcoming meeting— whether it
should be held and, if so, what to do in the interim on price supports.
According to Rice, it was decided to “tough it out” at least through
30 Nelson Exhibit 7, 18 Bearings 6711. As noted above the Secretary, also on March 12,
indicated that favorable action was going to be taken in the area of cheese purchases. See
Section t
31 Ehrlichman (lid not recall talking to Chotiner about milk supports. However, he did
recall attending every Gridiron Club dinner while he was in Washington. Ehrlichman, lb
Hearings 7384— 85. .. TT .. . - ,
8a Rice identified it as item 32, dated March 19, 1971. on the White House list of docu-
ments, 17 Hearings 8102. After the preparation of the Select Committee s report, copies or
documents relating to this meeting were released by the House Judiciary Committee ana are
included in appendix D to the committee’s report.
33 Ehrlichman, 16 Hearings 7385.
34 Cashen interview, February 26, 1974.
35 See Section IY.F, infra.
636
the meeting, so that the President would be meeting with industry
leaders from a posture of strength and not of capitulation.
There the matter ostensibly stood until March 23. But there is
some evidence, discussed in the following subsection and in section
IV.D., that by the 19th, several milk producer officials believed that
the President would reverse the decision after the meeting on the 23d.
(2) Ehrlichman Call to Parr
The Select Committee has received testimony from Dwight Morris
that on March 18, 1971, John Ehrlichman called David Parr. Morris
was, at the time, secretary of the AMPI board and had spent several
weeks in Washington in March working with Parr and others to secure
price support legislation.
Morris’ testimony concerning a phone call to David Parr during
that period is set forth in full :
Mr. Weitz. Now did there come a time when you overheard
a telephone conversation between Mr. Parr and someone
purportedly from the White House in connection with this
effort ?
Mr. Morris. Yes, there did.
Mr. Weitz. Could you tell us the circumstances of that?
Mr. Morris. Well, the phone rang and Mr. Parr took up
the phone and I think I went into the other room and also
picked up the phone.
Mr. Weitz. This was in Washington in a hotel suite?
Mr. Morris. That’s correct. And listened, and the man on
the other end was saying, and I didn’t know who he was at
that time, and I still really don’t know who it was, was saying
we want this congressional effort called off. Mr. Parr said,
I can’t call it off. The man said again, the White House
wants this congressional effort called off. And Mr. Parr then
said, I can’t call it off. The man said, I don’t believe you under-
stood me. The President wants this congressional effort called,
off. And Mr. Parr said, I don't believe you understood me.
I can’t call it off. And then the man from the "White House
said, you've heard, of the Federal Trade Commission , haven't
you? Mr. Parr said, yes. You've heard of the Justice Depart-
ment, haven’t you? Mr. Parr said, yes. And Mr. Parr went
on then to say that you just trot them out. We’ll meet them
any time, any place you say.
Mr. Weitz. And then he hung up ?
Mr. Morris. That was
Mr. Weitz. Who terminated the conversation ? Who hung
up ?
Mr. Morris. I think the man from the White House, if I’m
correct.
Mr. Weitz. How did you know it was a man from the
"White House?
Mr. Morris. That’s what Mr. Parr told me later.
Mr. Weitz. Did he also, to the best of your recollection, tell
you who had called ?
Mr. Morris. To the best of my recollection , he said it was
‘ Mr. Ehrlichman , but I at that time didn’t know Mr. Ehrlich-
637
man from Mr. Haldeman or Mr. Colson or anybody else, but
that’s the name I think he used.
Now, Mr. Parr, incidentally, does not recall this conversa-
tion which I think he’s completely honest in because there
were hundreds of calls a day into that place, and at that time
we were talking to the White House several times a day. 36
Mr. Morris went on to testify that by the next day, Friday, March
19, he understood that the President was going to raise the price sup-
port level. 37 As a result, he said that there was very little effort the
following week (which began just 10 days prior to the start of the new
marketing year) to work on the Hill to secure price support legisla-
tion. 38
This testimony about a change in strategy after the 19th is cor-
roborated by the earlier testimony before the Select Committee of
Bob Lilly, one of the key AMPI employees responsible for AMPI’s
legislative effort. 39 Lilly says that he was very upset over this move—
not because he thought that the milk producers had sufficient votes in
Congress to both pass price support legislation and override a possible
Presidential veto ; he did not think they did. Instead, he felt it was
very impolitic and damaging to milk producer-congressional rela-
tions first to ask Members of Congress to take a public stand for price
support legislation (in face of administration opposition) and then for
the co-ops to abandon the effort in midstream and switch to the
Presidential route. Nonetheless, it appears that after the 19th reliance
was again placed upon favorable administrative action — this time
by the President and not the Secretary of Agriculture.
D. Milk Producer Contacts With John Connally Prior to
March 28
John Connally became Secretary of the Treasury in February 1971.
As discussed above, Connally testified he had been consulted in 1969
at the time of the formation of TAPE. In March 1971, the milk pro-
ducers turned to him again, this time for his assistance to secure a price
support increase. According to Gary Hanman of Mid- Am, the name
Connally was mentioned in milk producer strategy sessions in 1971,
since, as he explained, “Texas dairy people” — particularly AMPI at-
torney Jake Jacobsen — were friendly with Connally. 40
1. CONTACTS BY .TAKE JACOBSEN
Connally and Jacobsen have known each other for 25 years. 41 In
1962 Jacobsen was Price Daniel’s campaign manager in his unsuccess-
ful campaign against Connally for the governorship of Texas. After
the campaign, Jacobsen became friends with Connally and thereafter
the two talked to each other on many occasions. 42
* Morris, 16 Hearings 7447-48. (Emphasis added.) Ehrlichman and Parr testified before
Morris and did not refer to this conversation.
37 Morris, 16 Hearings 7449.
38 Ibid
8» Lilly, 14 Hearings 5981, 6141-42. James R. Jones, then one of AMPI* a attorneys (and
now a Congressman) who was assisting AMPI in this legislative effort, said in a staff inter-
view that he too remembered that the effort was dropped sometime before March 2;>, when
the price support increase was announced.
40 Hanman. 14 Hearings 5875.
41 Connally, 14 Hearings 6052 ; Jacobsen, 15 Hearings 6381.
42 Jacobsen, 15 Hearings 6381 ; Connally, 14 Hearings 6052-53.
638
Both Connally and Jacobsen testified that Jacobsen talked to Con-
nally twice about the 1971 price support matter — once before March 12
and once after.
Connally’s logs reflect four contacts with Jacobsen during the
relevant period — a call from Jacobsen on February 25, a meeting
among Connally, Jacobsen, and Larry Temple (an Austin lawyer and
former Connally aide) on March 4, a meeting between Connally and
Jacobsen on March 19 and a call from Jacobsen on March 23.
Connally remembered the first discussion as occurring at a meeting
either in late February or early March, presumably on March 4. 4a
Jacobsen stated that at the first meeting he explained the problem to
Connally. When he asked Connally to use his influence to help the
milk producers, Connally responded that he would try to be helpful. 44
Connally testified that he interpreted Jacobsen’s request as one for
him to contact Hardin. 45
Connally says that he was sympathetic to the position of the milk
producers and, sometime before the 12th, he talked to the President
about it. 46 Connally’s logs indicate meetings between Connally and
the President on March 5 and March 11. The President, in his public
statements, has made no reference to any meeting with Connally before
the 12th. Since the President has refused to provide the Select Com-
mittee with his logs on this subject (which identify the subject matter
of his meetings) , it has not been possible to determine the date of the
pre-March 12 President-Connally discussion on this question.
As discussed in section IV.F, Connally also apparently had several
key contacts with the President on March 23 in connection with the
price support matter.
2. CONTACT WITH BOB LILLY AT PAGE AIRWAYS
In the midst of the milk producer efforts in March 1971 to secure
an increase, Bob Lilly apparently encountered Connally in a chance
meeting. Although the content and significance of that contact is in
dispute, Connally may have given Lilly an important message on the
price support matter.
One afternoon in March, Lilly, Nelson, Parr, Tom Townsend, and
possibly Lynn Elrod (another AMPI employee) passed Connally’s
limousine on their way to Page Airways at Washington National Air-
port to return home by AMPI’s private jet. Lilly, Nelson, Parr, and
Townsend each remember seeing Connally in his car 47 William Pleas-
ant, AMPI’s hired driver, recalls seeing the car and telling his pas-
sengers. 48 They, in turn, instructed him to honk and pull alongside,
and Nelson and Parr then waved to Connally.
The AMPI party arrived at Page and, while waiting in the small
lobby of Page Airways terminal to depart, saw Connally walking
through the. lobby. According to those AMPI people present, Lilly
went over to speak to Connally. Nelson, Parr, and Townsend recall
that Parr tried to follow Lilly and talk to Connally, too, but Nelson
restrained him, saying, “No, let Bob go. Bob knows him.” 49
43 Connally, 14 Hearings 6054. The telephone call on Feb. 25 appears to have been
made to schedule the Mar. 4 meeting. Jacobsen, 15 Hearings 6411.
44 Jacobsen, 15 Hearings 6407.
45 Connally, 14 Hearings 6057.
48 Connally, 14 Hearings 6062.
47 Lilly, 14 Hearings 5979; Nelson, 15 Hearings 6617; Parr, 15 Hearings 6808; Town-
send., 14 Hearings 6308-09.
48 Pleasant Affidavit, 17 Hearings 7992-93.
49 Nelson, 15 Hearings 6619-20 ; Parr, 15 Hearings 6811 ; Townsend, 14 Hearings 6310.
639
Nelson reasoned that because Lilly knew Connally far better than
any other AMPI employee present, and Parr hardly knew him at all,
Connally might disclose something to Lilly that he might not other-
wise say in the presence of a stranger. 50
According to Lilly, Connally did. Lilly stated that he asked Con-
nally about the chances for an administrative increase in price sup-
ports, and Connally replied, “It’s in the bag. Pass it on to the
others.” 51 Lilly says he assumed Connally had personally spoken to
the President. Lilly then returned to his group and told them what
Connally said. Nelson essentially corroborated Lilly’s account and
testified that Lilly had said Connally was optimistic about an increase
by the President. 52 Although Lilly and Nelson said they told the other
AMPI people there, Parr, Townsend, and Elrod state that they do not
remember what was reported to them on Lilly’s discussion with
Connally. 53
Connally, in sworn testimony before the Select Committee on No-
vember 15, 1973 (and supplemented by two affidavits) stated that he
did not recall meeting, by chance or otherwise, Bob Lilly or seeing
Nelson or other AMPI people at Page Airways during March 1971. 54
He conceded, however, that it is possible that a chance meeting be-
tween himself and AMPI people occurred while he was passing
through Page Airways, 55 but, he denied communicating to any AMPI
representative any optimism on a reversal of the March 12 decision.
In fact, he testified that he does not think he discussed the 1971 price
support problem with any AMPI representative other than J acobsen. 5 "
Connally also denied knowing Lilly very well and said that he would
recognize Parr and Nelson ahead of Lilly. 57 The individuals involved
directly disputed that denial and testified that, of those present at the
time of the Page Airways meeting, Lilly knew Connally the best.
Nelson testified that he had met Connally only three times in his life,
prior to March 1971. 58 Townsend had never met him and Parr had
been introduced to him perhaps twice. 59
In contrast, Lilly says that, as a State lobbyist for the State Farm
Bureau in Texas in the 1960’s, he had frequent contact- — as often as
three or four times a week during State legislative sessions— with
Connally, sometimes in personal meetings of a few persons to discuss
State legislation. 60 Jacobsen, too, acknowledged that Lilly had spent
a great deal of time at the State capital in the 1960’s. 61 Lilly’s previous
contacts with Connally would explain why Lilly, rather than Nelson
or Parr, spoke to Connally about the price support matter at the
chance meeting at Page Airways. Thus, despite Connally’s failure to
recollect such a meeting, it appears that the encounter, in fact, oc-
curred, although additional evidence points to the conclusion that
Lilly may have been in error as to its date.
80 Nelson, 15 Hearings 6620,
51 Lilly, 14 Hearings 5978.
52 Nelson, 15 Hearings 6620-21. w , . . _ _
53 Parr, 15 Hearings 6811; Townsend, 14 Hearings 6310-11; Elrod interview, Dec. 6,
1973..
54 Connally, 14 Hearings 6067-68 ; Connally Affidavits, 14 Hearings 6102-04.
65 Connally Affidavit, 14 Hearings 6102.
50 Connally, 14 Hearings 6068.
Ibid.
68 Nelson, 15 Hearings 6508.
59 Parr, 15 Hearings 6809-10. 6902. . ,
00 Lilly. 14 Hearings 5978-80 ; see Lilly Affidavit, Exhibit A, 14 Hearings 6221 ; Nelson,
15 Hearings 6619.
01 Jacobsen, 15 Hearings 6460.
35-687 0 - 74 - 42
640
Lilly testified that, to the best of his recollection, this discussion with
Connally took place on the afternoon of March 19,“ the day Jacobsen
met for a second time with Connally — and Ehrlichman met with
Hardin, Shultz, and others. However, Connally testified that he did
not leave Washington on March 19, 63 and there is evidence to corrob-
orate that account. Connally ’s logs show an entry for a dinner 'that
evening at 8 p.m. at the Blair House in Washington given by Vice
President Agnew, and the Office of the Chief of Protocol of the De-
partment of State informed the committee staff that according to the
guest list for the dinner, Connally did attend the dinner. 64
Certain evidence in the possession of the committee points to March 5
as the date of the Connally-Lilly conversation. Lilly testified that
following the meeting with Connally, the AMPI people flew home —
first to Little Rock (for Parr, Townsend, and Elrod) and then to San
Antonio (for Nelson and Lilly). 65 There is an entry in the A M PT
jet log for a Washington-Little Rock-San Antonio flight on March 5,
the only one during that period. 66 Of significance is the fact that the
only time in March that Connally’s logs show him at Page Airways is
March 5. 67
In any event, Connally did press the milk producers’ case to the
President, and the possible impact of Connally’s role upon the Presi-
dent’s decision to increase price supports is discussed below. 68
E. Milk Producer Contribution Activity Prior to March 23
At the same time in 1971 that the milk producers were attempting
to secure an increase in milk price supports, efforts were also underway
to make contributions to the President’s campaign. Although large
commitments had been made, no money had yet been contributed by
March 23 to the President’s reelection campaign and only $10,00*0
had been contributed to other Republican committees.
1. .$2 MILLION COMMITMENT
From the time of the meeting in November 1970, in the Madison
Hotel attended by Colson, Kalmbach, Evans, and the AMPI rep-
62 Lilly, 14 Hearings 5977. This is corroborated by Lynn Elrod, who recalls that he
paid the driver, Pleasant, on the same day as the Connally incident, and Pleasant did
receive from Elrod a check for $200 on the 19th for his services for AMPI that week.
Pleasant check, 17 Hearings 8129. Elrod advised the committee staff that he had no record
of payments to Pleasant at any other time in March.
83 Connally, 14 Hearings 6007.
64 Other evidence tends to cast doubt on the 19th as the date of the meeting. The entries
in the AMPI jet log indicate that the jet arrived in Washington on the 19th, but did not
leave until the 20th. Goggans Affidavit. 17 Hearings 7903. The jet log is not, however, nec-
essarily accurate, particularly as to intermediate stops. Goggans Affidavit. 17 Hearings
7900-01. (For example, whereas the jet log for March 12. 1971 shows flights from San
Antonio to Washington and back to San Antonio, the pilots’ personal logs show San
Antonio to Austin to Washington, and a return from Washington to Little Hock to Austin
to San Antonio.) Nonetheless, in the case of the 19th, the pilot’s personal logs are consistent
with the jet log. Furthermore, those Page Airways records which are still in existence tend
to confirm the accuracy of the jet logs, as to the time of arrival and departure.
In addition, Townsend testified that, based on his records, he had left Washington on the
18th and not the 19th. Townsend, 14 Hearings 6307. Ho-wever, his records do not indicate If
he returned again and left on the 19th without checking back into the hotel in Washington,
Avhich was not unusual for the milk producers during a period when they were particularly
active in Washington.
65 Lilly, 14 Hearings 5982.
06 Blanton Affidavit, 17 Hearings 7840.
07 Hotel records are not conclusive, since according to those records, the AMPI people
left Washington nearly every Friday in March, including the 5th and the 19th.
08 .If the alleged Page Airways encounter took place on March 5, its significance is unclear
in view of the decision on March 12 not to raise the support level.
641
resentatives to discuss dummy committees for the $2 million in milk
producer contributions, until March 23, no substantial progress was
made in arranging for these contributions to the President’s campaign,
and not one penny had been received toward the pledge. In the interim,
Colson, Haldeman, and Kalmbach agreed to have a person not directly
affiliated with the White House or the campaign to supervise this
project.
Kalmbach was the chief fundraiser for the President. However,
he apparently did not want to deal with interest group contributors,
such as the milk producers. 69 In a memorandum from Colson to Halde-
man dated February 1, 1971, and titled “Outside Fund Handling,”
Colson pointed out this fact to Haldeman and said that he knew of
an individual who could handle contributions from those groups. 70
Haldeman’s handwritten response on the memo was “proceed away.”
Below that is written “Bob Bennett” in what has been identified as
Colson’s handwriting.
Robert Bennett had served as vice chairman for public relations
(under Robert Mullen) in the 1968 campaign (when he met Colson
and Evans), and then became congressional liaison in the Depart-
ment of Transportation, where he was Colson’s “political contact.” 71
When he left the Department in 1970, he joined Mullen’s Washington
public relations firm.
Bennett told the Select Committee staff that he wanted to par-
ticipate, albeit in a minor way, in the 1972 campaign. He decided there
would be a need for multiple committees for large contributions, and
he talked to Colson and Evans about setting up committees.
Evans introduced Bennett to Kalmbach who told him that they
needed 100 committees right away and, ultimately, 300 to 400 com-
mittees. 72 In March, Evans gave Bennett a copy of a charter for a
District of Columbia Committee “to work for the renomination of
President Richard M. Nixon.” 73 In the following months, Beimett
organized the committees using that charter. The ultimate disposition
of these committees is discussed below in section V.B.
Kalmbach, Bennett and Evans are all uncertain when these dis-
cussions took place, but since John Dean sent copies of a draft of the
charter to Kalmbach, Evans, and Frank DeMarco, Kalmbach’s law
partner, on March 18, 1971, it seems likely that the charter was not
given to Bennett until sometime afterward. Thus, the reelection
effort had not yet received any contributions toward the dairy pledge
by March 23.
2. CONTRIBUTIONS TO THE MARCH 24, 1 9 7 1 , REPUBLICAN DINNER
The milk producers had apparently made a commitment to a Presi-
dential representative — perhaps in addition to the $2 million pledge—
to contribute $100,000 to the $1,000 a plate kickoff 1972 Republican
dinner on March 24 sponsored by the Republican Party. Colson, in a
09 Kalmbach. 17 "Hearings 7595.
70 Strachan Exhibit 2B, 16 Hearings 7475.
71 Bennett interview, October 16, 1973.
72 It is interesting to note that 100 committees, at $2,500 per committee, accounts for an
initial $250,000, the same amount Lilly testified the milk producers committed as a result
of the contact with Connally in March and the approximate amount in fact contributed
shortly after the March 25 increase. See Sections IV.P. and V.B., infra.
73 See charter attached to Dean memo, 17 Hearings 8131-34.
642
memorandum dated February 2, 1971, to Haldeman’s aide, Lawrence
Higby, stated :
The Milk Producers are prepared to buy 10 tables to the
committee dinner ($100,000) . The National Committee ought
to be advised in advance that this is part of the money we owe.
The only trick would be to be certain that we got credit for
this against the sums they expect us to raise. 74
Both Kalm'bach and Gary Hanman of Mid-Am understood that at
least part of the milk producer contributions for the dinner might, in
fact, go to the President’s campaign. 75 However, there is no evidence
that anyone connected with the dinner or the Republican National
Committee was aware of any arrangements between the milk pro-
ducers and representatives of the President. Moreover, there is no
evidence of any transfer of funds from any RNC committee to the
President’s reeiection organization in 1971.
In early March, the co-ops were prepared to contribute to and
attend the dinner. However, the adverse decision on March 12 damp-
ened their interest and led some dairy leaders to consider a boycott
of the dinner (and contributions). 76 No action was taken by AMPI
toward making the dinner contributions until March 22 after Lilly
and others began to realize that a price support increase might be
granted by the President. On that date, four TAPE checks totaling
$10,000 were drawn to RNC committees. The other two leading co-ops,
Mid-Am and HI, still had not committed themselves to the dinner
or to the President’s campaign.
Thus, by March 28, the milk producers may have discussed— but
except for $10,000 had not yet fulfilled — their $2 million and dinner
commitments. As discussed in sections F and G, these circumstances
apparently changed in the following 2 days : On March 23, the milk
producers met with the President and, shortly thereafter, received
word of a possible price support increase; on March 24, the milk
producers made additional pledges and contributions of $75,000 to
the Republican committees and the earlier $2 million pledge was re-
affirmed “in view of” the expected announcement of an increase.
F. March 23
The 23d of March began with a number of dairy industry
leaders gathering in Washington to meet with the President. Begin-
ning at 9 that morning, a number of meetings between administration
and milk producer officials took place. The President attended a
morning meeting with the industry leaders and an afternoon meeting
with his advisers, at which he announced to his advisers that he
would reverse Secretary Hardin’s decision and raise the milk price
support level. There is evidence in the committee’s possession and
discussed below that the milk producers were alerted late on the 23d
74 Strachan Exhibit 2C. 16 Hearings 7476. Lee Nunn, then Executive Director of the
Republican Senatorial Campaign Committee, who was responsible for the dinner, testified
that he knew of no special arrangement between the dinner committee and the White House
with respect to this contribution. Nunn, 17 Hearings 7538-39.
75 Kalmbaeh, 17 Hearings 7599. Hanman, 14 Hearings 5885.
70 Hanman, 17 Hearings 7733. Hanman says, prior to March 12, the milk producers
intended to contribute $60.000-$80,000 to Republican dinner committees. Hanman. 17
Hearings 7733. Ultimately, TAPE contributed $10,000 and the other co-op trusts $75,000,
for a total of $85,000.
643
to a possible price support increase and of the need to reaffirm their
$2 million pledge, and within hours they were flying to assemble for
a middle-of-the-night rendezvous in an urgent attempt to arrange
for commitments of substantial financial contributions by fellow
producers to the President’s campaign. These efforts continued on the
24th as well, by the end of which the President’s decision had been
linked to the dairy contributions.
1. 9 A.M. OOLSON-CHOTINER MEETING
Chotiner said that he met with Colson twice on the 23d, first at 9 or
9 :30 and later at 6 in the evening. 77 At one or perhaps both of the meet-
ings, milk producer political activity and contributions were discussed.
Chotiner said that Colson was upset with Harrison and Hillings be-
cause of the December 1970 Hillings’ letter to the President, and he
believes that Colson may have even shown him a copy of the letter at
one of the tw T o meetings on the 23d. 78
2 . 10:15 a.m. — president’s call to connally
Connally’s logs indicate that the President called Connally at 10 :15
a.m., 15 minutes before the scheduled meeting with the milk producers.
That morning, from 8 to 10:05 a.m., Connally had attended a meeting
at the White House with the Kepublican leadership. Although Con-
nally did not recall what he discussed with the President during the
call, he assumed it related to the prior meeting and not to the upcom-
ing meeting nor to milk price supports. 79
However, materials obtained by the House Judiciary Committee
indicate that Connally did discuss the milk producers with the
President. 80
3. 10:30 A.M. MEETING BETWEEN THE PRESIDENT AND
MILK PRODUCERS
a. Preparation for the Meeting
Preparations for the March 23 meeting began several months before.
On January 11, 1971, AMPI lawyers Harrison and Hillings met with
Secretary Hardin, and on January 14, Harrison sent a letter to Hardin
enclosing a list of names of dairy leaders whom they requested be in-
vited to a meeting at the White House with the President and Har-
din. 81 Included in the list were Nelson, Parr, Butterbrodt, and others
of AMPI, Moser and Alagia of 1)1, Powell of Mid- Am and Harrison
and Hillings. 82 Though preparation thus began in J anuary, Hillings
says he hoped to use the opportunity of the meeting to press the milk
producers’ case for price supports.
The meeting with the dairy leaders appears to have been scheduled
substantially further in advance than usual. On January 26, Hardin
77 In the staff interviews on December 7, and 10. 1973, Chotiner first revealed to Watergate
investigators the fact of his two March 23 meetings with Colson. Colson’s logs prior to
mid -1971 were not available to the Select Committee.
78 Weitz affidavit. Exhibit B. 17 Hearings 8007.
79 Connallv, 14 Hearings 6060.
80 Letter from the House Judiciary Committee to the President. April 19, 1974. After the
preparation of the Select Committee’s Report, the House Judiciary Committee released a
transcript of the President’s side of this conversation, which is included in Appendix D to
this chapter.
81 Nelson Exhibit 4, 15 Hearings 6705-08.
83 On the last page of the list is written “Chotiner?”.
644
forwarded the Harrison list to Haldeman. Haldeman says that usually
meetings such as this were not put on the President’s schedule more
than a few days in advance in order to keep it flexible. 83 According to a
letter from Dwight Chapin, the President’s Appointments Secre-
tary, to Hardin, however, the President had, as of February 25, already
approved of a meeting and it had been scheduled for March 23 at
10 :30 a.m. in the Cabinet Room. 84
b. Whitaker's Briefing Pafer for the President
The President normally receives a briefing paper to assist him in
preparing for meetings, and John Whitaker apparently prepared the
Presidential briefing paper for the March 23 meeting. As Colson had
done in his briefing paper to the President the previous September,
Whitaker called the President’s attention to milk producer contri-
butions.
The Select Committee has been denied access to this document by
the President. 85 The White House conceded, however, that in the
briefing paper the President was told that “the dairy lobby — like
organized labor — had decided to spend political money and that Pat
Hillings and Murray Chotiner were involved.” 86
Two questions come to mind: First, how did Whitaker learn of
their contribution activity ? Second, in view of the earlier pledge,
described in a memorandum from Colson to the President, what was
meant by the phrase “the dairy lobby . . . had decided to spend politi-
cal money”?
First, on the same date of the briefing paper, March 22, Whitaker
received from Under Secretary Campbell a memorandum with a fact-
sheet on the milk producers and proposed “opening remarks” by the
President for the next day’s meeting. 87 There was no mention of politi-
cal contributions. According to Ehrlichman, Whitaker did not usually
receive fundraising information from Kalmbach which was provided
to other White House officials. 88
On the other hand, Colson had received the original $2 million
pledge and, as indicated by his February 1971 memos, had a continu-
ing interest in milk producer contributions, including those to the
dinner on the 24th ; Ehrlichman, as evidenced by his activity in con-
nection with significant contacts on the 23d and 24th, also became
involved in linking the price-support increase to dairy contributions.
Second, while it appears that both the $2 million pledge and the
March 23 meeting had their genesis in 1970, the fact remains that
as of March 23, 1971, no money had yet been contributed in satis-
faction of that pledge. On the contrary, certain dairy leaders were
even considering a boycott of further contributions to a Republican
fundraiser that very week.
handwritten note on the letter, the
83 Haldeman, 16 Hearings 7165.
84 Chapin Letter, 17 Hearings 8135. According to
meeting was confirmed with Harrison on March 2. ' - _
86 After the preparation of the Select Committee’s report, the House Judiciary Commit-
tee released a copy of this memo which is included in appendix D to this chapter.
m Both Hillings and Chotiner deny being “involved.” However, the Select Committee
has received evidence that at least Chotiner did play an important role in a key call to
Nelson on the 23d and a meeting on the night of the 24th. See sec. IY.F.8 and IV.G below.
And, of course, Hillings not only had written his Dec. 16, 1970, letter citing arrangements
for a $2 million contribution, but had met with Hardin and attended the meeting on
the 23d with the President.
87 Campbell memorandum. 17 Hearings 8136-38.
88 Ehrlichman, 16 Hearings 7398.
645
The reference in the briefing papers to “political money” and to two
friends of the President, Hillings and Ohotiner, at the very least re-
flect an interest on the part of certain Presidential aides in milk
producer contributions at a time when the President was considering
an important matter affecting the milk producers.
c. The Meeting
According to the White Paper “The President opened the meeting
by thanking the dairy leaders for the support they had given to ad-
ministration policies and praised them for their activism in pursuing
goals which were important to them.” 89
The meeting in the Cabinet Room was taped. Plaintiffs in Nader
v. Butz (the suit challenging the legality of the 1971 price support
increase, see section VI.C.2.a), who have a copy of the tape recording
of the meeting, 90 dispute the White Paper’s summary. Plaintiffs have
filed a pleading in the case in which they set forth the following
transcription of the President’s remarks : 91
I first want to say that I am very grateful for the support
that we have had [inaudible word] from this group. I know
that in American agriculture you’re widely recognized ; that
it cuts across all the farmer organizations, is represented in all
the States. I know, too, that you are a group that are politi-
cally very conscious, not in any party sense but you realize
that what happens in Washington not only affects your busi-
ness success but affects the economy, our foreign policy [in-
audible word] affects you. And you are willing to do some-
thing about it. And I must say a lot of businessmen and others
I get around this table, they yammer and talk a lot but they
don't do anything about it. But you do and I appreciate that. I
don’t need to spell it out. Friends talk [?], and others keep
me posted as to what you do.
What did the President mean by his remarks? It should be noted
that the most recent political activity by the milk producers as of
March 23 was their lobbying efforts on the Hill resulting in con-
gressional support for a price support increase which the President
has called a “gun to our head.” 92 The question may be asked whether
the President was thanking them for this political activity or for
expected contribution “support.” It should be recalled (1) that the
President knew of the $2 million pledge and just prior to the March 23
meeting he had been reminded by Whitaker of the milk producers’
political contribution activity, and (2) that the dairy leaders believed
the President was kept informed by Colson of their contribution
activity. 93
It appears that the President — who had approved Hardin’s March
12 decision and had permitted Hardin to announce it publicly —
80 White Paper, p. 10. 17 Hearings 8085. After the preparation of the Select Committee’s
report, the House Judiciary Committee released a transcript of the meeting, which is
included in appendix D to this chapter.
90 Although the White House had not asserted executive privilege as to the meeting and
had produced a copy of the tape recording to plaintiffs, it declined to provide the Select
Committee with a copy, as explained above.
Motion for Immediate Production of Records for Which Privilege Has Been Waived, at
2, Nader v. Bute, C.A. 148-72 (D.C. Dist. Ct., filed January 11, 1974).
9 ~ See section IV.I. supra.
93 Nelson, 15 Hearings 6625.
646
did not defend the decision at the meeting. He apparently kept his
options open and let Hardin and Campbell defend the previous de-
cision. 94 Campbell, in particular, indicated his concern about over-
production. 95 Shultz said in the staff interview that, in fact, Campbell
lectured the dairy leaders on the dangers of overproduction.
The White Paper states that “the President pressed the attendees
as to whether or not they could control overproduction.” 96 Mehren
(who was not present) testified that Nelson later told him that he
had promised the President that production could be controlled to
insure a market price in excess of $4.93 and thus minimize Govern-
ment surpluses. 97
The producers’ position on production differed in two key respects
from the approach of the administration. First, the dairymen asserted
at the meeting they could control production by instituting certain
marketing arrangements, called a “base-excess plan,” on a wide-scale
basis — when it may be that the strict implementation of the plan would
run afoul of the antitrust laws. In fact, certain aspects of AMPI’s base-
excess plan have been alleged, in United States v. Associated Milk
Producers, Inc ., Civ. Action No. SA 72C A49, W.D. Texas, filed
February 1, 1972, to involve violations of the Federal antitrust laws. 98
Second, in a staff interview, Dr. Rice of OMB pointed out that if the
dairy farmers could (as they represented) limit production and supply
so that the price of milk would be raised by “natural” market forces
to a level in excess of $4.93, why then did they need a price-support
increase in the first place ? 99
Dairy leader reaction to the meeting was mixed. Butterbrodt said
that when he left the meeting he felt the President was going to
change his mind. 1 However, Parr was not optimistic and felt their only
hope lay with legislation. 2 Hanman, who said the President didn’t
indicate his position either way, was not encouraged by the meeting. 3
After the meeting, many of the co-op leaders left Washington. Some,
including Nelson, Parr, and Hanman, remained and later that night
took part in covert, hurried efforts to arrange substantial commitments
for contributions to the President’s campaign — after communicating
with some administration officials about the likelihood of an imminent
price-support increase (see Sections IY.F. 7, 8, 9, 10, and 11 below).
4. 12 NOON PRESIDENT, SJIUETZ AND EHRLICHMAN MEETING
Ehrlichman’s logs indicate that he met with the President and
Shultz at 12 noon, about one-half hour after the dairymen meeting
ended. The Select Committee has no evidence indicating the subject
of the meeting and it has been denied access to Presidential logs which
indicate the subject matter of his meetings. However, in view of their
participation in the price support matter and their attendance at a
meeting that afternoon (at 4:45) at which the President presumably
04 Harrison, 14 Hearings 6270 ; Hanman, 14 Hearings 5876.
05 Hanman, 14 Hearings 5876.
96 White paper, p. 10, 17 Hearings 8085.
07 Mehren, 16 Hearings 7246.
08 The Government’s antitrust action against AMPI is discussed in Section VI. A., infra.
99 There also have been allegations that AMPI bought large amounts of cheese in early
1971 to drive up the price above the $4.93 level in an attempt to prove its case to the
Administration. Nelson admitted AMPI had bought extra cheese but claimed it did so to
offset an artificial downward pressure on the price. Nelson, 15 Hearings 6561.
1 Butterbrodt, 17 Hearings 7639.
2 Parr, 15 Hearings 6817-18.
3 Hanman, 14 Hearings 5877 ; Hanman, 17 Hearings 7742.
647
announced the reversal to his aides, it is possible that the noon meeting
involved, at least in part, a discussion of milk price supports. More-
over, Shultz’ assistant, Rice, says he was informed by Shultz of the
scheduling of the 4 :45 meeting early that afternoon.
5. 4M5 P.M. MEETING BETWEEN THE PRESIDENT AND HIS ADVISERS
Late on the afternoon of the 23d, at approximately 4 :45, the Presi-
dent met with Connally, Ehrlichman, Shultz, Hardin, Campbell,
Whitaker, and Rice to discuss the milk price support situation. Unlike
the others present, Connally, as Treasury Secretary, was not usually
involved in milk price support decisions, but he had, as noted above,
talked to the President and other officials and was in contact (includ-
ing on that day) with the milk producers. 4
The Select Committee found that, of those it interviewed, Rice had
the most detailed recollection of the positions taken by those present
at the meeting. 5 He said that Shultz was still in favor of “holding
the line” but lie was willing to go along with the political “experts.” 6
According to Rice, Hardin was willing to do whatever the President
wanted, and Campbell reluctantly agreed they should grant an in-
crease. Connally recalled that on balance Hardin was still opposed to
an increase. 7
In the staff interviews with Hardin and Whitaker, White House
counsel asserted executive privilege on behalf of the President to pre-
vent them from discussing what was said to or by the President at
the afternoon meeting or any other time. 8 However, Hardin said the
assertion of the privilege was unnecessary in his case since he did not
remember what occurred at the meeting. 9
Although the White Paper notes that “rising costs for dairy pro-
ducers were mentioned,” it concedes that the economic merits was not
one of the two “fundamental themes” in the meeting — which it says
were (1) congressional pressure for an increase and (2) “the political
advantages and disadvantages of making a decision regarding a vital
political constituency” — as the White Paper makes clear, the Presi-
dent’s political constituency for the 1972 campaign. 10 Moreover, Rice
recalls no sophisticated economic discussion and, in fact, on the merits,
Hardin and Campbell were still opposed to an increase. 11
* See Section IV. F. 9, infra.
5 At the time this Report was written, neither a transcript nor a tape recording of the
meeting, which could provide a more complete account, has been furnished to the Select
Committee. In November and December 1973, the committee requested and then subpenaed
the tape recording from the President who has not complied. After the preparation of the
Select Committee’s Report, the House Judiciary Committee released a transcript of the
meeting which is included in Appendix D to this chapter.
9 Rice Interview, supra. See also Connally, 14 Hearings 6063.
7 Connally, 14 Hearings 6063.
8 Rice, Shultz, Campbell, Connally and Ehrlichman did discuss, in general terms, the
meeting: Rice informed the staff that he had contacted the White House to ask for its
position on the executive privilege question but received no reply.
9 This is difficult to understand since at that meeting the President reversed Hardin’s own
decision. Hardin appears to have made a material and substantial omission in his affidavit
in 1972 in Nader v. Butz, in which he explained the reasons for the Mar. 25 decision. In
the affidavit, Hardin made no reference whatsoever to the Mar. 23 afternoon meeting or
to the President’s involvement. See Section IV.H.2, infra and Hardin’s affidavit, 17 Hearings
7916-19.
10 White Paper, p. 5, 17 Hearings 8080. The White Paper position represents a manor
concession that the economic merits was only one of three factors taken into account by the
President. As noted in Section IV.H.2 below, presumably the last word on the subject had
been stated by former Secretary Hardin who had sworn in a March 1972 affidavit in Nader v.
Butz that only economic considerations were taken into account. In fact, by January 8,
1974, the date of the White Paper, the Select Committee had accumulated considerable
evidence that tended to contradict Hardin.
11 Campbell, 17 Hearings 7788.
648
Connally spoke at length about the political situation — the support
in Congress and the political impact on farm States. According to
the White Paper, Connally “said that [the dairy industry lobby] votes
would be important in several Midwestern States and he noted that
the industry had political funds which would be distributed among
House and Senate candidates in the coming election year — although
neither the Secretary nor anyone else discussed possible contributions
to the President’s campaign.” 6 * * * * * 12 However, the House Judiciary Com-
mittee has indicated that Connally also “stressed the dairy industry’s
‘potential’ for making political contributions.” 13 Since Connally lias
denied under oath before the Select Committee discussing with Jacob-
sen (or anyone else) milk producer contribution activity, it is not
clear what source Connally had for his information. 14
Although Campbell does not recall any discussion of a Presidential
veto, 15 the White Paper states that the President concluded that he was
faced with the option of either vetoing the legislation — and losing
milk producer “support” — or, instead, acting to keep the “support”
by increasing the level himself. 16 The President chose the second alter-
native. 17 As explained later in this report, the Presidential increase
was more favorable for the milk producers than 34 of the 36 bills
introduced. 18
Near the close of the meeting, it was decided to inform the dairy-
men of the President’s decision. Campbell says that some one said :
“Well, we need to tell the dairymen we are going to raise the sup-
port,” 19 It is not clear what was the purpose of notifying the dairy-
men. What is clear is that in the meetings and calls that immediately
followed the meeting and preceded the public announcement 2 days
later (and discussed in the following sections), the dairymen were
informed of the likelihood of an imminent increase, and of the need to
reaffirm their $2 million pledge. Accordingly, they attempted to round
up contributions and additional pledges and, in the end, Kalmbach
was directed by Ehrlichman to meet with the dairymen who informed
him that the reaffirmation of the $2 million pledge was “linked” to the
expected announcement.
6. 5:5 0 P.M. EHRLICHMAN-COLSON MEETING
It is alleged that near the conclusion of the 4 :45 pan. meeting with
the President, “there was a brief discussion about someone at the
meeting contacting Mr. Colson.” Presumably based on its review of a
tape recording of that meeting, the House Judiciary Committee has
12 White Paper, p. 5, 17 Hearings 8080.
13 See Letter from House Judiciary Committee to the President, supra.
14 See section IV.F.9, infra.
15 Campbell, 17 Hearings 7768.
19 The President has charged that Congress put ‘‘a gun to our head.” This defense and the
congressional activity is discussed below in Section IV.I.2.
17 There is conflicting evidence as to when the President announced his decision to his
aides. The White Paper indicates that he did so near the conclusion of the 4 :45 p.m. meet-
ing and Rice corroborates that. On the other hand. Ehrlichman did not recall whether or
not the decision was announced at that point, Ehrlichman, 16 Hearings 7392. and Con-
nally testified it was not. Connally, 14 Hearings 6064. Therefore, the possibility that the
President discussed the matter shortly before or after the meeting cannot be foreclosed and
a potentially significant conversation remains to be discussed. Indeed, Ehrlichman said
5i iat i ie «£ elleves he did talk t0 the Resident about the price support decision sometime after
the 4:45 p.m. meeting on the 23d, but refused to say what was said on the ground
that such a disclosure would be “improper” and that “it’s none of vour business.” Ehrlich-
man, 16 Hearing s 7392-93. Absent fuller disclosure by the President and his former aide,
the precise time and scope of the President’s decision cannot be fixed.
13 See Section IV.I.2, infra.
19 Campbell, 17 Hearings 7772.
649
evidence indicating that “the President either directed Mr. Ehrlich-
man to contact Mr. Colson, or approved Mr. Ehrlichman doing so.” 20
As noted above, there was also a discussion of notifying the dairy-
men of the results of the meeting.
Ehrlichman did contact Colson. According to his logs, Ehrlichman
met with him at 5 :50 p.m. — only minutes after the meeting between
the President and his aides ended and minutes before Colson met with
Chotiner, a principal lawyer for the dairymen.
7. 6 P.M. COLSON- CHOTINER MEETING
At 6 that evening, Chotiner met with Colson for the second time
that day. Although he could not specifically recall what was dis-
cussed at the meeting, he believed that, at one of his two meetings that
day with Colson, they discussed the Hillings’ letter. While Chotiner
denied knowing of the reversal until it was publicly announced on
the 25th, there is evidence that he knew on the 2.3d of the likelihood
of an increase. In addition to talking to Colson on the 23d, Chotiner
reportedly called Nelson that day to notify him of the status of the
price support matter and to discuss dairy contributions. This is fur-
ther corroborated by subsequent events during that 2-day period, as
testified to by a number of persons, including Nelson and Kalmbach.
8. CHOTINER CALL TO NELSON
Nelson has informed the staff that sometime on the 23d, he re-
ceived a telephone call from Chotiner, who told him that the prospects
for a price support increase were good but that it was not certain and
that Nelson was not to count on it. 21 Nelson says that it was clear to
him that Chotiner had obtained his information from a White House
official, perhaps even the President himself.
Chotiner also discussed contributions, according to Nelson. Chotiner
is reported to have notified Nelson to attend a meeting the next night
with Kalmbach and himself “to get this matter [the committees for
the $2 million pledge] settled.” Nelson said : “I was to let Kalmbach
know that we were still prepared to make the contribution.” While
he asserts the increase was not conditioned on the contributions, Nelson
says that he knew he was expected to reaffirm the pledge :
Mr. Sanders. Did he indicate to you that the price support
decision was linked to this reaffirmation you were to make ?
Mr. Nelson. No; he just said that he wanted me to meet
with Kalmbach, and I suppose that was an implication there,
but he didn’t deal that bluntly at all . 22
Nelson says that call — and the critical information about the price
support decision and the upcoming meeting with Kalmbach — triggered
the trip late that night to Louisville (described below) to secure con-
tribution pledges for the President’s campaign from the leaders of
Mid- Am and DI. Before doing so, Nelson also received a call from
Under Secretary Campbell.
20 Letter from House Judiciary Committee to the President, supra.
21 Nelson advised the committee of this in an interview after the staff learned of Kalm-
bach’s contacts with Ehrlichman on March 23 and 24, 1971.
22 Nelson interview.
650
9. CAMPBELL CALL TO KELSON
Although Nelson does not recall the conversation, it appears that
Under Secretary Campbell talked with him by telephone sometime
after 5:50 p.m. 23 According to Campbell, the reason for the call was
to “get the daily people off our back.” Campbell said he asked Nelson :
“Now, Harold, if we do change our mind and do raise the price, will
you and the other dairymen stop asking for * * * price-support in-
creases because I don’t think it is good for the dairymen?” Campbell
says he concluded by asking, “Will you get off our backs?” and Nelson
agreed. 24
Gary Hanman says he was told on the evening of the 2.3d that Camp-
bell had called Parr and told him that “progress is being made” on
the price decision and that they shouldn’t boycott a Republican fund-
raising dinner scheduled for the next evening. There is no evidence
of a call from Campbell to Parr that day and, in any event, Campbell
denies discussing the dinner or contributions to the dinner with Parr,
Nelson, or anyone else. 25 Also, Campbell did not consider himself to
have been designated at the afternoon meeting with the President to
notify the dairymen that an increase would be granted and, in fact,
testified that he did not do so in his call to Nelson. 26 Two other dairy
representatives in touch with administration officials who attended the
4 :45 Presidential meeting and who were thus in a position to “alert”
the dairy leaders were Chotiner (whose call to Nelson is already out-
lined above) and Jacobsen (who, as described below, was in contact
with Connally) .
10. EHRLXCHMAN-KALMBACH CALL
Sometime on the afternoon or evening of the 23d, Ehrlichman spoke
by long-distance telephone with Kalmbach in California. Kalmbach
says that at that point Ehrlichman notified Kalmbach of an upcom-
ing meeting scheduled for 11 p.m. on the night of the 24th between
Kalmbach and others in Washington. Although Kalmbach did not
know at the time of the call, that meeting turned out to be the meeting
late on the 24th with Chotiner and Nelson, when Kalmbach says he
was notified of the link between the price support decision and the $2
million pledge.
Of note is that, when Ehrlichman spoke to Kalmbach on the 23d,
the purpose of the 11 p.m. meeting and the identity of its participants
had not yet been communicated to Kalmbach. Thus, at or about the
time the President made his decision and communicated it to his ad-
visers, the effort was underway — but had apparently not been final-
ized — to involve the President’s chief fundraiser in the arrangements
for the anticipated $2 million in contributions prior to the public
announcement of a price support increase. What yet remained was
23 According to AMPFs records of phone messages, Campbell called Nelson at AMPI in
San Antonio at 4 :50 p.m. Central Standard. Time (5 :50 Eastern Standard Time) and left a
message for Nelson to call him at his home number. See Nelson Exhibit 6, 15 Hearings
6710. Campbell said he talked to Nelson that day, probably after the 4 :45 meeting. Pre-
sumably, that conversation occurred when Nelson returned Campbell’s call. Campbell, 17
Hearings 7773-74. 7776.
24 Campbell, 17 Hearings 7770-71, 7774.
23 Hanman. 17 Hearings 7734. Campbell, 17 Hearings 7775-76.
26 Campbell. 17 Hearings 7771, 7774-75.
651
the dairy lobby’s effort to aggregate its political contribution re-
sources prior to that public announcement — a matter discussed at the
meeting at the Louisville Airport on the night of the 23d. Before that,
there was at least one additional contact that day between the admin-
istration and the dairymen — a call from Jacobsen to Connally.
11. JACOBSEN' CALL TO CONNALLY
It is not. entirely clear w T hat role was played by Connally in the
milk producer efforts to arrange for contributions linked to the price
support decision. Elirlichman says he talked to Connally about the
price support question either before or after the 12th. 27 As discussed
above, it is also known that Jacobsen met with Connally on the 19th
and contacted Connally by telephone sometime on the afternoon or
evening of the 23d. 2S Both Jacobsen and Connally testified that on
these occasions they probably discussed price supports, 29 but Con-
nally flatly denies that there was any mention by Jacobsen of dairy
contributions. 30 Jacobsen, however, is not so certain. He testified that
he did not recall, but may have discussed milk producer contributions
with Connally. 31
The most extensive account of Connally ‘s involvement is provided
by Bob Lilly who testified to a significant meeting in the Madison
Hotel shortly after one of these Jacobsen-Connally contacts.
According to Lilly’s testimony to the committee on November 14
and 16, 1973, Nelson, Parr, Jacobsen, Harrison and he 32 discussed in
late. March, 1971 the prospects for a price support increase. 33 Lilly said
that the discussion then turned to political contributions and their out-
standing commitments to the President. On that point, Jacobsen, based
on his contact with Connally, is said to have reported —
that, in order to obtain Mr. Connally’s assistance in obtaining
a favorable decision by the administration with regard to
27 Ehrlichman, 16 Hearings 7382.
28 There are no records available to determine the time of the Jacobsen-Connally call.
However, the entry on Connally’s logs immediately preceding the call from Jacobsen
is “To: Gus Mutscher (Austin).” Connally Exhibit 1, 14 Hearings 6092. Mutseher, then
speaker of the Texas House of Representatives, recalls only one telephone call from
Connally, and that was in connection with a State bill that was being debated by the
Texas Legislature on March 23, 1971. From a review of the records of the legislature,
Mutscher believes the call from Connally was made at about noon, Central Standard Time,
or 1 p.m. Washington time. Therefore, the Jacobsen-Connally conversation presumably took
place sometime thereafter.
29 Connally, 14 Hearings 6058 ; Jacobsen, 15 Hearings 6414.
30 Connally, 14 Hearings 6058.
31 Jacobsen, 15 Hearings 6413.
32 Those allegedly present recall meeting and discussing political contributions on one
or more occasions during the period, although Harrison does not believe it took place in
March 1971. Harrison, 14 Hearings 6272.
33 It is not clear whether the discussion took place after the Jacobsen-Connally contact
on the 19th or 23d. Lilly testified that he thought the discussion took place the week
of the 15th, which would link it to the meeting on the 19th. Lilly, 14 Hearings 5976.
However, Lilly also placed the meeting at approximately the same time that Mehren.
of AMPI, was preparing to leave the United States for Europe, because, according to
Lilly, Mehren was not present at the meeting. Lilly, 14 Hearings 6110. Mehren’s attorney
has told the committee staff that he left Washington on March 24th and after the morning
of the 23d, he was preparing to leave the city and had no further involvement in the
price support effort. This fact would indicate that the meeting took place after the
Jacobsen-Connally call on the 23d. While there are no records, such as records of air-
plane or hotel charges, to indicate that Jacobsen was present in Washington at the time.
Jacobsen acknowledged that he flew by AMPI jet “considerably” (Jacobsen. 15 Hearings
6415.) and Nelson did maintain a suite of rooms in the Madison Hotel throughout most
of March 1971, so that Jacobsen could have come and gone from Washington without
the usual type of record having been made. If he was in fact not in Washington, then
his participation in a March 23d meeting may well have been by long distance telephone as
was his documented telephone conversation with Connally on the 23d.
Even if the discussion to which Lilly testified took place on the 19th, preparations for
the plan to commit another $250,000 in “new money” (as Lilly testified) were not begun
652
milk price supports, new money should be committed by
AMPI. 34
It is Lilly’s testimony that Jacobsen “strongly indicated it. In fact,
he said this had to be done.” 35
A discussion ensued and, as described by Lilly, it was agreed that
$250,000 in “new money” — in addition to whatever milk producer com-
mitments were then outstanding — would be committed. 36
The other alleged participants deny Lilly’s account, although they
agree that there were discussions from time to time about substantial
contributions to the President’s campaign — according to Jacobsen, “in
the millions.” 37 Nelson does not preclude the possibility that he even
may have suggested at one point that they make a contribution immedi-
ately as a good faith showing of their intentions to honor their commit-
ment. 38
Connally has denied under oath not only discussing with Jacobsen
the milk producer contributions to the President, but also knowing of
any milk producer contribution activity :
[A]t no time to this good day do I know, nor has anyone
ever told me what they contributed to whom, or by what
means, or in what amount. I had nothing to do with their
political campaign contribution activities. 39
I never discussed political contributions by this group with
them, or with him, or with anybody else. 40
Connally’s dairy contact, Jacobsen, has admitted being present dur-
ing discussions by dairy leaders of contributions :
Mr. Weitz. At this time when you presumably reported
back to Mr. Nelson and Mr. Parr about your meeting with Mr.
Connally, did you discuss political support or political con-
tributions with them to the Republican Party ?
Mr. Jacobsen. Well, I don’t recall if it was at that time or
some other time. But they did a lot of talking about making
substantial contributions to the Nixon administration.
Mr. Weitz. Did they indicate any specific amounts ?
Mr. Jacobsen. Oh, the figures were in the millions.
Mr. Weitz. In the millions ?
Mr. Jacobsen. Yes. 41
However, Jacobsen stated that he did not know of the purpose of the
contributions or of any express tie between the contributions and the
price support matter:
Mr. Weitz. Exactly what did you know about the contribu-
tion to the multiple committees in 1971 by the dairy people ?
until late on the 23d. It was not until that evening that AMPI representatives contacted
Colson. Connally and Campbell and apparently learned of the likelihood of a favorable price
support decision. Only then, for the first time, did the dairy leaders try to raise in a
coordinated fashion from all three dairy co-ops several hundred thousand dollars at the
Louisville Airport. See Lilly affidavit, 14 Hearings 6219.
34 Lilly, 14 Hearings 6109.
35 Lilly, 14 Hearings 5977.
36 Lilly, 14 Hearings 6106.
37 Jacobsen, 15 Hearings 6408.
38 Nelson. 15 Hearings 6561.
39 Connally, 14 Hearings 6072.
40 Connally, 14 Hearings 6062.
41 Jacobsen, 15 Hearings 6408.
653
Mr. Jacobsen. Only that they were going to be made.
Mr. Weitz. Do you know for what purpose ?
Mr. Jacobsen. No.
Mr. Weitz. Do you know whether there were any commit-
ments made in March of 1971 by the dairy people to either
Republican fundraisers or anyone in the administration that
such contributions would be made ?
Mr. Jacobsen. No ; I don’t.
Mr. Weitz. Such commitments could have been made,
though, since you were not advised of all of their etforts.
Mr. Jacobsen. Absolutely.
Mr. Weitz. At any time after the price support decision in
1971 — the second one, to increase supports — has anyone, other
than what you have read in the paper, ever talked to you, or
have you ever learned about any understanding or commit-
ment for contributions by the dairy people in the hope of
obtaining an increase, or in fact in the expectation of obtain-
ing an increase ?
Mr. Jacobsen. No ; I don’t know that.
Mr. Weitz. Have you ever discussed this matter with Mr.
Parr or Mr. Nelson since March 1971, the matter of political
contributions and milk price support decisions ?
Mr. Jacobsen. No.
Mr. Weitz. To the present time ?
Mr. Jacobsen. I don’t think so.
Mr. Dorsen. Do you know whether the second increase deci-
sion was handled in any way other than the normal procedure
that was customarily followed by the Department of Agricul-
ture and the White House?
Mr. Jacobsen. No ; I don’t know. 42
On the other hand, Jacobsen assumed that the dairy contributions and
the efforts to gain favorable action were related :
Mr. Dash. Was it necessary to express it? You all were
working in the same direction. Was it an understanding that
you all had that such a contribution would be aimed in the
direction of getting a beneficial result ?
Mr. Jacobsen. Mr. Dash, I would have to assume that would
be right. 43
There are several pieces of independent evidence that tend to indi-
cate that Connally in fact was aware, at least in a general way, of the
milk producers’ contribution activity. First, Haldeman stated that
sometime in early 1971, before milk producer contributions to the
President were made but after Haldeman says he became aware of
their contributions intentions, Connally informed him that the milk
producers wanted to make a contribution but that committees were not
being set up for them. 44
Second, according to a transcript released by the House Judiciary
Committee of a tape recording of the afternoon meeting with the
President on March 23, Connally discussed milk producer contri-
42 Jacobsen, 15 Hearings 6418-19.
43 Jacobsen, 15 Hearings 6409.
44 Haldeman, 16 Hearings 7163.
654
butions with the President and a number of his aides at that meeting-
Third, there is a contemporaneous document handwritten by Nel-
son on the back of a co-op document relating to the 1971 price
support matter which bears on the question of Connally’s involve-
ment. 45
Nelson says that the word just below the first line in the middle of
the note appears to him to be “Connally.” While Nelson said “I just
can’t tell what the word is,” he did acknowledge : “I would agree with
you that I can see how it could be. 46 Moreover, he v T as able to name
specifically only Connally and Hardin who he was aware had spoken
to Shultz and the President, and, of those two, he could not read the
word other than as Connally. 47
Nelson assumed that the note was written on March 23 at his meet-
ing with the President. 48 The note appears to reflect the substance
of two meetings on conversations. While the President and Shultz
did attend the morning meeting, Connally did not. The question may
be asked whether the two parts of the note were written on two dif-
ferent occasions, and whether at least the second half reflects a com-
munication between the milk producers and Connally in connection
with the events on March 23. Indeed, the language quoted in the first
half of the note is nearly identical to that used by Connally when he
testified before the Select Committee about Shultz’ pre-March 23
position on price supports. 49
As to the meaning of the note, Nelson acknowledged that AMPI was
the most aggressive political organization in agriculture. He did not
believe “Didn’t give” referred to contributions, because he assumed the
note was written after some money had already been contributed. 50
Nelson noted that “the ‘didn’t give’ part connotes presently to me that
what I was reacting to was the thought that Shultz was not ‘giving’
insofar as changing his position in the matters concerned,” but
observed that “this is just conjecture” on Nelson’s part-. 51
However, Nelson could only point to the $10,000 in checks that had
been prepared on March 22d for dinner tickets. In any event, that
$10,000 fell far short of the alleged $100,000 commitment for the dinner
and a $2 million pledge for the President’s campaign. In that context,
perhaps a contribution of $10,000 wasn’t “giving.”
Fourth, Lilly’s account of a $250,000 commitment in connection
with Jacobsen’s contact with Connally dovetails with the evidence
that at about that time Kalmbach and Robert Bennett both under-
stood that the first contributions by the milk producers to the multiple
committees for the President’s campaign were to total $250,000, in
the form of $2,500 to each of 100 committees.
Finally, within 30 hours after Jacobsen called Connally, several
unusual meetings took place concerning the milk price support decision
45 Nelson Exhibit 5, 15 Hearings 6709. The note reproduced on the next page, appears
to read as follows :
Schultz r sic! : Every dime must be cut down.
Schultz [sic] has got to be instructed [ ?].
Talked to Schultz (sic) and President 30i minutes.
Told Pres, we were most aggressive polit. organ, in Agric.
Didn’t give.
49 Nelson, 15 Hearings 6562-63.
47 Nelson, 15 Hearings 6563.
4fl Nelson. 15 Hearings 6565.
40 Connally testified that Shultz “was fighting to keep a dime of additional expenditure
down . . .” Connally, 14 Hearings 6063.
5ft Nelson, 15 Hearings 6564.
61 Nelson, 15 Hearings 6565-66,
655
Nelson Exhibit 5
and substantial contributions and linking, in one case. Connally, and
in another, Ehrlichman, to these efforts. Based on the evidence pro-
vided by Lilly, Kalmbach and others, these subsequent meetings ap-
pear to have resulted from the earlier contacts on March 23 with
Connally, Chotiner, Ehrlichman, and perhaps others.
We now turn to one of the most important of these meetings — at the
Louisville airport late on the night of the 23d or early in the morning
of the 24th.
12. LATE NIGHT MEETING IN LOUISVILLE
Late on the night of the 23d, several AMPI and Mid- Am people
flew to Louisville to meet, with a DI officer and seek a contribution from
DI (SPACE) of several hundred thousand dollars. 52 The meeting
was a direct result of the events earlier that day, principally their
learning of the expected announcement of a price support, increase.
Paul Alagia was, in March 1971, in the process of stepping down
from his position as a top official of DI in favor of Ben Morgan. Never-
theless, together with John Moser (DI’s president), he had attended
the meeting with the President on the 23d. Following that meeting, he
had lunch in Washington, D.C., and then flew to Chicago on other
business.
While in Chicago that evening, he received a call from his wife in
Louisville, who told him that some AMPI people had called her and
were looking for him and wanted to know the time of his scheduled
52 The Committee staff learned of the meeting during a series of interviews with DI
personnel in Louisville, Kentucky, on December IB, 1973.
656
return. After another phone call between AMPI people and his wife,
she called Alagia and told him that they would be waiting for him in
Louisville. 53
Alagia arrived about 3 or 4 in the morning to find waiting, in the
near-deserted Louisville Airport, four representatives of the other
two major dairy co-ops: Nelson, Parr, and Lilly of AMPI and Gary
Hanman of DI. According to Alagia, they told him they wanted
Alagia to commit $200,000 or $300, 000. 54 Alagia said of the request :
“It was in the context of the meeting [with the President] .” 55
Alagia testified that they were trying to pressure him into agreeing
to a commitment. They told him “they had either been to see Connally
or they were on their way to see Secretary Connally.” 56 As related to
Alagia, Nelson then told him “what a forceful fellow Connally was.” 57
Lilly says that the only reason Nelson had asked Lilly to accompany
them to Louisville was that, since Alagia respected Lilly who had
spoken face-to-face with Connally about the matter in the Page Air-
ways Terminal, Nelson hoped that Lilly’s presence would add greater
force to their appeal to Alagia. 58
Alagia says that he refused the first request, and that they im-
mediately scaled down their request to a $100,000 loan from DI’s polit-
ical arm, SPACE, to ADEPT by the “first of the week” — March 29. 59
Alagia says that he told them he didn’t think SPACE could legally
loan money and that he wasn’t interested in doing so. According to
Alagia, the meeting broke off without any understanding that SPACE
would make a contribution.
Except for Hanman, the others present either corroborated or did
not dispute the essential portions of Alagia’s account. 50 Hanman, who
first testified before the committee learned of the Louisville meeting
and did not himself refer to that meeting, stated that the only time
between March 12 and 25 that ADEPT contributions to the President
may have been discussed was on March 24 at the Republican fund-
raising dinner. 61
The next day, the 24th, SPACE contributed $25,000 — its largest con-
tribution up to that time — to five Republican committees, and, within
1 week, arrangements were underway for TAPE to loan ADEPT
$50,000 which ADEPT contributed to Republican committees. These
matters are discussed below.
Lilly, who says they needed some money from Alagia and DI
the next day, the 24th, considered the flight to Louisville the first effort
by the three dairy trusts of which he was aware to coordinate sub-
stantial contributions to the President’s campaign. 62
Parr testified there was “some urgency” about the trip to Louisville,
but he was not sure why. 63 Why, indeed ? The price support question
and, according to AMPI, a pledge of contributions had been outstand-
ing for several months. That very day — the 23d — Alagia had been in
53 Alagia, 16 Hearings 7071.
54 Alagia, 16 Hearings 7072.
65 Ibid.
m Alagia, 16 Hearings 7075.
57 Ibid.
58 Lilly affidavit, 14 Hearings 6218-20.
59 Alagia, 16 Hearings 7072-73.
00 See Nelson, 15 Hearings 6630-31 ; Parr, 15 Hearings 6819 ; Lilly Affidavit, 14
Hearings 6218-20.
61 Hanman, 14 Hearings 5880. Hanman has since testified before the Select Committee
about his attendance at the meeting. See Hanman, 17 Hearings 7731-40.
62 Lilly Affidavit, 14 Hearings 6819.
03 Parr, 15 Hearings 6819.
657
Washington with Parr and Nelson at the meeting with the President.
A meeting for representatives of the three co-ops — including Paar,
Hanman, and Alagia — was already scheduled for Chicago for
March 25. What was it that was not known at noon on the 23d but
couldn’t wait until March 25 and caused the four instead to fly hun-
dreds of miles in the middle of the night of March 23d-24th ?
Nelson, the head of the leading cooperative, provides an explanation.
Nelson says that he acted on the basis of the information he received
from Chotiner about the status of price support matter and the
upcoming meeting with Kalmbach. He thought by holding out to
other dairy leaders the possibility of a Presidential increase— with-
out assurance that it would definitely be granted — he hoped to induce
them finally to commit large amounts of money to the President’s
campaign before the price support matter was resolved. 64
G. March 24
The dairymen returned to Washington from Louisville on the morn-
ing of the 24th. That day, SPACE contributed $25,000 and ADEPT
pledged $50,000 to Republican committees. By the end of the 24th, a
key meeting — at which Kalmbach was informed of the link between
the price support increase and the $2 million pledge — was held pre-
liminary to the announcement of the. increase the next day.
1. $75,000 FROM SPACE AND ADEPT
The Louisville Airport meeting was followed the next day by an
immediate $25,000 contribution and a pledge of an additional
$50,000. On the 24th, Hanman hurriedly checked with _ other
Mid- Am officials and then pledged $50,000 to be contributed in the
next several weeks after the receipt of the loan discussed at the
airport meeting. 65
In the meantime, DI officials took steps to contribute their $25,000
that day. After the meeting in the Louisville Airport, Alagia went
home, slept for several hours and then went to the DI offices later
that morning, where he told Ben Morgan and John Moser of the
airport meeting. 66 That day, Jim Mueller, the SPACE trustee, wrote
five checks, each for $5,000, to five Republican committees, and the
checks were taken by plane to Washington by a DI employee and
delivered to Marion Harrison.
There is a dispute in the testimony as to whether the $25,000 con-
tribution was the result of the airport meeting with AMPI and
Mid- Am. Alagia says that it was not. He claims he talked to Moser
on the 23d, after the meeting with the President, about making a
contribution to Republican Members of Congress to encourage them to
support price legislation — although he did not indicate that there was
any discussion of a $25,000 contribution. He says that on the 24th he
discussed the question with Morgan who agreed to a contribution of
$20,000 or $25,000 — the largest contribution by SPACE to that time —
and who then authorized Mueller to issue the checks. However, Morgan
contradicted Alagia by saying, in a staff interview, that he did not
64 Nelson interview. .Tune 12, 1974.
65 Hanman, 17 Hearings 7736.
68 Alagia, 16 Hearings 7044-75.
658
determine the amount of the contribution and he does not know who
did. 67
Alagia stated that the $25,000 was to be used to purchase tickets
to the $1,000 a plate Kick-Off 1972 Republican Dinner, which was the
subject of Colson’s memorandum concerning an anticipated $100,000
dinner contribution. 68 Alagia explained that a messenger was sent to
Washington to assure that the DI people who were in Washington to
attend the dinner received their tickets. 60 However, although $25,000
was contributed, only 10 tickets were received. 70
Kelson, Parr, and Lilly, in sworn statements, have stated that the
SPACE contribution on the 24th resulted from their meeting with
Alagia. 71 Nelson, who was not in Washington for part of the day on
the 24th, stated that someone from DI probably contacted Parr that
day to notify him of the contribution. 72
2. 5:30 P.M. EHRLICHMAN-KALMBACH MEETING
Kalmbach flew to Washington from California on March 24 and,
upon arriving, he immediately met with Ehrlichman at their scheduled
5 :30 p.m. meeting at which he was briefed on his various meetings in
Washington scheduled for that evening and the next day. According
to Kalmbach :
At the 5 :30 meeting with Mr. Ehrlichman he advised me
that I would be meeting with Mr. Chotiner and Mr. Nelson
later that evening, at which time a reaffirmation of the [$2
million] pledge would be received. 73
Therefore, whereas the identity of the participants and purpose of
the late-night meeting on the 24th had not been finalized or at least
communicated to Kalmbach on March 23 — when Kalmbach included
the meeting on his agenda — they were apparently set by 5 :30 p.m. on
the 24th — after the milk producer contribution activity late on the
23d and on the 24th.
Ehrlichman was asked about his knowledge of the relationship be-
tween milk producer contributions and governmental action they
desired :
Mr. Sanders. Did you learn at anytime that AMPI had
pledged funds of any size for the reelection of the President
in return for some specific favorable governmental action?
Mr. Ehrlichman. No.
Mr. Sanders. Or that they did in return for some favorable
governmental action ?
Mr. Ehrlichman. No . 74
3. KICK-OFF 1 9T2 REPUBLICAN DINNER
A large contingent from the dairy co-ops, including Nelson and
Parr, attended the Kick-Off 1972 Republican Dinner on the evening
67 Morgan interview, December IB, 1973.
m See Section IV.E supra.
69 Alagia, 16 Hearings 7075-76.
70 Westwater interview, December 17, 1973.
71 Nelson, 15 Hearings 6631; Parr, 15 Hearings 6826; Lilly Affidavit, 14 Hearings
6218-20.
72 Nelson, 15 Hearings 6631.
73 Kalmbach, 17 Hearings 7812.
74 Ehrlichman, 16 Hearings 7400.
659
of the 24th at the Washington Hilton. Parr testified that at first, he
had not wanted to contribute to the Republicans or attend the dinner,
explaining, “I never did like to help anybody who was going to be
against me.” 75 .
On the other hand, Parr readily agreed that he would have wanted
to support them if they acted favorably toward the dairymen. 76 Parr
said that at some point prior to the dinner, Nelson and Harrison told
him that he and the other co-op people should attend the dinner. 77
Nelson and Parr testified that at the dinner Page Belcher, who was
then the ranking minority member of the House Agriculture Com-
mittee, was telling everyone present that the administration was going
to announce a price support increase. 78
Belcher was not the dairymen’s only source of information on the
price-support decision that night. Shortly after the dinner Nelson
apparently was notified — again by Chotiner as he had been the day
before — that there was going to be an increase — and, according to
Kalmbach, that it was linked to milk producer contributions.
4. CIIOTINER-NELSON-KALMBACH MEETING
Chotiner, in a staff interview, and later Nelson and Kalmbach in
sworn testimony before the Select Committee, each acknowledged that
they met after the dinner on the 24th, and discussed milk producer
contributions. 79 Because of the significance of the meeting and of vari-
ations and, in some instances, contradictions between the accounts, the
three versions are set out separately in some detail.
a. Chotmerh Account
According to Chotiner, 80 the meeting was precipitated by Ehrlich -
man but its purpose was not to discuss contributions. Chotiner says
that at the dinner on the 24th Ehrlichman told him that Colson was
unhappy with Harrison and Hillings representing the milk producers
and that Colson wanted nothing more to do with the dairymen as long
as he had to work through Harrison and Hillings. Chotiner says he
had talked to Colson directly about this matter and Colson’s unhappi-
ness stemmed from the language in Hillings’ letter to the President in
December 1970.
Chotiner told Ehrlichman that as counsel to the Harrison firm he
could not take full responsibility for the client away from Harrison,
but he did agree to help work with Colson. Ehrlichman then asked
Chotiner to meet with Nelson and Kalmbach the next morning the
25th, to tell Nelson of the new arrangement. Chotiner said he couldn’t
because he was leaving for California, but that he would do so upon
his return.
As related by Chotiner, Ehrlichman indicated that it couldn’t be put
off and asked Chotiner to meet with them that night. Chotiner agreed
75 Parr, 15 Hearings 6817.
76 Ibid.
77 Parr, 15 Hearings 6828.
78 Nelson, 15 Hearings 6569 ; Parr, 15 Hearings 6828.
79 The committee staff first learned of the meeting on December 7, 1973, during an
interview with Chotiner when he was questioned concerning his conversations with Nelson
on the subject of campaign contributions. Chotiner was also the committee source for the
information that he met with Colson at 6 p.m. on March 23.
80 Chotiner interview, included as Exhibit B to Weitz Affidavit, 17 Hearings 8007-09.
660
and at the dinner told Nelson “let’s get together with Kalmbach to talk
about the milk decision” and then informed Kalmbach. He says he also
told Harrison of the arrangement.
Chotiner says that he did not think Ehrlichman’s request was un-
usual ; he explained that he thought it would have been inappropriate
for a Government official (presumably Ehrlichman or Colson) to be
present when Chotiner met with Nelson to discuss a change of counsel.
Following the dinner, Chotiner met with Nelson in the lobby of the
Madison Hotel, where Kalmbach was staying. They waited for per-
haps as long as a half hour or an hour before obtaining the correct
telephone number to Kalmbach’s room and, finally around 11 :30 or
midnight, met Kalmbach in his room.
Kalmbach was already in his robe and the meeting was short. The
substance of the meeting consisted of the following conversation :
Mr. Chotiner. Harold, it’s no criticism of Marion [Harri-
son] or Pat [Hillings] ; maybe they don’t like the way they
comb their hair, but there’s bad feeling between Colson and
Marion and Pat. So they want me to represent you in dairy
matters unless you object.
Mr. Nelson. Okay.
Mr. Chotiner. Herb, is that your understanding ?
Mr. Kalmbach. Yes.
Mr. Nelson. We had a satisfactory meeting with the Presi-
dent and we appreciate it. We contribute to both Democrats
and Republicans. If we want to contribute to Republicans,
how should we do so ?
Mr. Chotiner. Harrison is still your attorney for such mat-
ters, and he’ll give you the names of committees. 81
Chotiner says the meeting ended, lie went home and the next day
flew to California. Chotiner insists that Ehrlichman did not tell him
anything concerning the price support decision and he did not learn
of the reversal until it was publicly announced on the 25th.
The question arises, then, as to why the attendance of Kalmbach,
the President’s chief fundraiser, was necessary at a meeting for a
change in dairymen’s counsel. Why, also was a change in counsel nec-
essary on the evening of the 24th if the new counsel (Chotiner) was
leaving for California for the last few days in March just prior to the
new milk marketing year when the milk producer efforts for an in-
crease would presumably be greatest ?
Chotiner’s account is contradicted in several material respects by
Nelson and Kalmbach.
b. Nelson’s Account
Nelson says he was first notified by Chotiner of the 11 p.m. meet-
ing when Chotiner called him on the 23d — and not at the dinner on
the 24th as Chotiner said. According to Nelson, the express purpose of
the meeting was to discuss arranging committees for the $2 million
pledged by the dairymen, and that he knew that, he was expected to
reaffirm that pledge. Although Nelson says that he did not understand
that a price support announcement was conditioned on reaffirmation
81 Weitz Affidavit, Exhibit B, 17 Hearings 8008-09.
661
of the pledge, Nelson concedes that Chotiner discussed price supports
and contributions with him during the March 23cl telephone call
preparatory to the 11 pan. meeting on the 24th. And, as already dis-
cussed above, the late-night flight to Louisville to arrange for dairy
commitments of hundred of thousands of dollars was triggered by
Chotiner’s notice to Nelson of the possible (though not certain) price
support increase.
As for the 11 p.m. meeting, Nelson, like Chotiner, says that they
waited in the lobby of the Madison Hotel for some time before see-
ing Kalmbach. However, he testified to an important additional fact:
he believes that, while they were waiting, Chotiner again told Nelson
that a price support increase : “. . . looked favorable . . . [Chotiner]
wasn’t guessing, but he also admonished [Nelson] not to count on
it until it v 7 as absolutely done, that it could not happen.” 82 Nelson
assumed that Chotiner had obtained his information “from him, the
President, or somebody very close to the President.” 83
They met with Kalmbach after midnight. Nelson says he told
Kalmbach that he was prepared to go forward with the contribution
and Chotiner “put it on [Kalmbach] about getting names of the
committees, and he said he would.” 84 Nelson concurred and the meet-
ing ended. Contrary to Chotiner’s account, Nelson remembers no men-
tion at the meeting of Colson, Harrison, or Hillings, or the meeting
with the President, and says he was not aware of any dispute between
Colson and the Harrison firm. 85
Nelson denied that there was any remark at the meeting that
“linked” the reaffirmation and the expected announcement:
Mr. Sanders. * * * do you have any recollection of any re-
marks by Chotiner which conditioned the anticipated an-
nouncement on any reaffirmation from you ?
Mr. Nelson. No ; I feel certain that he didn’t.
Mr. Sanders. Did he indicate to you that the price support
decision was linked to this reaffirmation you were to make?
Mr. Nelson. No.
Mr. Sanders. Did you have any understanding on the 23d
that the price support decision might not come about if the
reaffirmation was not made ?
Mr. Nelson. No. * * * 88
With respect to his overall understanding of any relations and the
price support decision, Nelson testified :
Mr. Sanders. Did you at any time articulate any promise to
any official of the Nixon administration or the Nixon re-
election effort to make a certain amount of money available
for the reelection of the President in return for an increase in
milk price supports?
Mr. Nelson. No, sir.
Mr. Sanders. Do you have knowledge that anyone else in
AMPI did so ?
Mr. Nelson. No, sir.
82 Nelson. 15 Hearings. 6570.
83 Ibid.
84 Nelson, 15 Hearings 6573 ; Nelson interview.
85 Nelson, 15 Hearings 6560, 6573.
8(5 Nelson interview, July 1, 1974.
662
Mr. Sanders. Do you have knowledge that any official of
any other dairy co-op or trust did so?
Mr. Nelson. No, sir.
* Jjc * * *
Mr. Sanders. There would be a difference between making
the contributions in the way of gratitude for action taken by
the administration as opposed to making the payments in ful-
fillment of an obligation ?
Mr. Nelson. That is right. There is a matter of semantics
involved there, too. There is no obligation to fulfill because of
the price support increase.
5j! 4: # *
Mr. Sanders. At any time since March 24, 1971, have you
been apprised by any responsible official in the Nixon admin-
istration or reelection effort that any action taken by you on
March 24, 1971, or any representations made by you on that
day resulted in the price increase, the increase in the support
level the following day ?
Mr. Nelson. No. 87
However, Nelson assumed that an unwillingness on his part to go
forward with the contributions would have an adverse effect on the
price support matter. He testified :
Mr. Sanders. Was anything articulated by Chotiner or
Kalmbach to lead you to this conclusion?
Mr. Nelson. No. I think it would have certainly cast a
cloud on our credibility had we then said, no, we won’t make
the contribution. I think they would have been fully justified
in saying, we don’t want any more conversations with you
about anything.
Mr. Sanders. But that was purely subjective?
Mr. Nelson. Right.
* * * * *
Mr. Weitz. You felt that a failure to reaffirm would have
had an adverse effect. Was it not true that the meeting was
to notify you or inform you of the status of the price support
matter and, at the same time, try to move forward on the
pledge ?
Mr. Nelson. Yes.
Mr. Weitz. Did that have some influence on your feeling
that there might be an adverse impact if you refused ?
Mr. Nelson. Oh, certainly.
With respect to what Nelson considered his alternatives, he replied :
Mr. Sanders. When you made that reaffirmation that night,
did you consider that it would be reversible if the next day,
or the next few days there had not been an increase?
Mr. Nelson. No, sir.
But he explained that :
We were perfectly willing to make the contributions. We
knew, and he knew that we were interested in matters other
87 Nelson, 15 Hearings 6694-95.
663
than just the price support decision. We weren’t in any posi-
tion to say, if you don’t do this we’re not going to make the
contribution. 88
c. Kalmbach's Account
Based upon his typed agenda for March 24, 89 Kalmbach believes
that it was Ehrlichman — and not Chotiner — who first informed him
of the fact and purpose of the 11 p.m. meeting. 90
With respect to the meeting itself, Kalmbach testified before the
committee on March 22, 1974, that, like Nelson, he recalled no reference
by anyone at the meeting to Colson or Harrison or Hillings or the
Harrison firm. 91 Instead :
the main, and almost sole, purpose of that meeting was the
reaffirmation of the $2 million pledge and the fact that they
told me that the price support decision was to be announced
the next day and that in view of that fact and in view of the
fact that Mr. Ehrlichman had asked Mr. Chotiner to make
sure that I was informed of this reaffirmation, that they were
in fact reaffirming the $2 million pledge to the campaign. 92
Kalmbach, when questioned further, restated his testimony in more
precise terms ; he said :
that Mr. Chotiner, in telling me of the fact that Mr. Ehrlich-
man had asked him to advise me or relay to me the fact that
they were reaffirming their pledge of $2 million in contribu-
tions to the 1972 campaign * * * There was to be an announce-
ment the next day and this was , in fact, linked to this reaf-
firmation of the $2 million pledge 93 . . .
Kalmbach testified again on June 13, 1974, and adopted his prior
testimony as to the purpose and content of the meeting, but further ex-
plained it as follows :
Mr. Kalmbach. ... my very best recollection, that at the
5 :30 meeting with Mr. Ehrlichman, he advised me that I
would be meeting with Mr. Chotiner and Mr. Nelson later that
evening, at which time a reaffirmation of the pledge would be
received.
Mr. Sanders. So that to the best of your recollection Mr.
Ehrlichman did not place the reaffirmation in the context of
the anticipated price increase.
Mr. Kalmbach. I do not have that recollection ; no, sir . . .
I was not to seek a reaffirmation, but ... I would be supplied
such a reaffirmation.
*****
Mr. Sanders. In your conversation with Nelson and Chot-
iner, and in connection with some mention by them, as you told
us, of the price increase to be announced the next day, did it
appear to you that that announcement was already a foregone
conclusion, that was to occur!
Mr. Kalmbach. Yes.
88 Nelson interview, supra ; see Nelson, 15 Hearings 6698-99.
89 See Kalmbach Exhibit 4. IT Hearings 7816.
90 Kalmbach, 17 Hearings 7600.
91 Kalmbach, 17 Hearings 7601.
92 Kalmbach, 17 Hearings 7602.
93 Kalmbach. 17 Hearings 7607. (Emphasis added.)
664
Mr. Sanders. Did it appear to you that it was in any way
reversible ?
Mr. Kalmbach. It did not.
Mr. Sanders. Did it appear to you that if the reaffirmation
was not made, that the price announcement would not be
made?
Mr. Kalmbach. It did not. It appeared to me, Mr. Sanders,
that the decision had been made as to the announcement the
following day of the price increase; and that the purpose
of my meeting with Mr. Chotiner and Mr. Nelson was to re-
ceive a reaffirmation of the earlier pledge. And that I would be
the one for them to see, inasmuch as I was the principal fund-
raiser for the 1972 campaign at that point in time.
Mr. Sanders. Do you have any concept of what might have
occurred if the reaffirmation had not materialized that night ?
Mr. Kalmbach. No, sir ; I do not, although it is my impres-
sion that I felt that I was simply to be advised of the reaffir-
mation.
Mr. Sanders. Now, you have told us during previous testi-
mony that the announcement — I believe the terminology was
“linked” to the reaffirmation.
Mr. Kalmbach. That is correct, I so understood that it
would be.
Mr. Sanders. What do you mean by “linked,” if the an-
nouncement was already a foregone conclusion and was not re-
versible, did you mean to say that the reaffirmation was con-
ditioned upon the announcement of the increase?
Mr. Kalmbach. No, Mr. Sanders, my understanding was.
as I think I testified, was that when I met with Mr. Nelson and
Mr. Chotiner, that they indicated that the milk support deci-
sion would be — they understood that the milk support deci-
sion would be announced the following day, and in view of
that fact they were in fact reaffirming the pledge by the milk
producers to the President’s 1972 campaign. That is what I
meant by the fact that the two matters were in fact linked.
Mr. Sanders. So that you had no understanding with
Haldeman, Ehrlichman, Nelson, Chotiner, or anyone that
the reaffirmation of the so-called pledge was being made in
any way as a condition of the announcement of the price
increase ?
Mr. Kalmbach. I did not so understand.
* sfc * *
Mr. Kalmbach. I think, Mr. Dorsen, that my understand-
ing was simply, as I stated, that the price support would be
announced the next day ; and that in view of that fact, that
the pledge to the President’s 1972 campaign was being reaf-
firmed to me as a principal fundraiser.
Mr. Dorsen. But it was also your understanding that the
pledge had already been reaffirmed at an earlier time, prior
to the 11 p.m. meeting.
Mr. Kalmbach. Well, it was my impression that they were
simply advising me of something that they probably had in-
dicated to someone else earlier.
665
Mr. DoRiSek. So, that essentially yon were going to be a
witness to the reaffirmation in yonr capacity as the fund-
raiser.
Mr. Kalmbach. I so understood. Mr. Dorsen, they wanted —
it was my impression that, the reason I was being advised of
this is that they wanted the milk producers to tell me that
such a pledge was in fact being reaffirmed, yes. 94
Taking the three accounts of the 11 p.m. meeting together, it is
undisputed that Chotiner, Nelson, and Kalmbach met late on the
night of the 24th in Kalmbach’s room in the Madison Hotel, and
that they referred to milk producer contributions. On other matters,
the evidence can be summarized as follows :
(a) The purpose of the meeting. — There is no evidence to corrobo-
rate Chotiner’s account of his conversation with Ehrlichman or of the
purpose of the meeting with Nelson and Kalmbach; in fact, there is
substantial evidence that tends to refute it. Ehrlichman says that
although he was aware of occasional problems of communication be-
tween Colson and certain other interest groups, he does not remember
any such problem involving the milk producers or their representa-
tives. 95 Contrary to the versions of Chotiner and Kalmbach, Ehrlich-
man denied telling Chotiner to meet with the dairy people, and went
on to say : “I don’t recall ever steering Chotiner to Kalmbach.” 96
Haldeman, too, was not aware of any trouble between Colson and
the dairymen. 97 And, as stated above, Nelson and Kalmbach testified
that they recalled no such reference at the meeting. If, as Chotiner said,
Harrison was the subject of the meeting, it, is strange that, according
to Harrison, Chotiner did not inform him of the meeting for 114
years— until December 1972, at the time Chotiner’s deposition was
taken in Nader v. ButzN Nelson’s and Kalmbach’s versions indicate
that the purpose of the meeting was to reaffirm the pledge and to dis-
cuss dairy contributions. Kalmbach’s account of the arrangements for
the meeting — beginning on the 23d — is further corroborated by his
typewritten agenda.
(b) Discussion of the price support announcement. — Kalmbach
makes clear that, Chotiner told him at the meeting that the price sup-
port announcement would be the next day. Nelson says that, on the
23d, and again on the 24th, Chotiner also told him of the possible
announcement, apparently based on information “from the President
or someone close to the President.”
The question must be asked whether, contrary to his account,
Chotiner, a former White House counsel and a longtime friend of the
President, was in fact told — either by Ehrlichman or Colson or both —
of the, imminent price support announcement. Ehrlichman certainly
knew of the decision in advance — indeed, he was present when it was
made 99 — and he ( at the direction of the President) and then Chotiner
in fact met with Colson less than 1 hour after the President, made the
decision on the afternoon of the 23d.
94 Kalmbach, 17 Bearings 7812-15.
96 Ehrlichman, 16 Hearings 7392.
90 Ehrlichman, 16 Hearings 7391. Kalmbach testified to his conversation and meeting
with Ehrlichman on March 23 and 24 after Ehrlichman was interviewed about his In-
volvement in the milk fund, and Ehrlichman was therefore not questioned about Kalmbach’a
account of those contacts.
97 Haldeman, 16 Hearings 7169.
08 Harrison, 17 Hearings 7690-91.
99 Ehrlichman. 16 Hearings 7392. See White Paper, 17 Hearings 8080.
666
(c) Relation between, contributions and the price support announce-
ment . — Further questions then arise: was there a link between the
announcement and the reaffirmation of the pledge ? If so, why was the
reaffirmation sought and what was its significance ?
As set forth in his testimony quoted above, Kalmbach was informed
that the pledge had been reaffirmed “in view of” the upcoming an-
nouncement. Kalmbach also makes clear that by the time he became
involved on the 24th, both matters — the reaffirmation and the announce-
ment to which it was linked — were already certain; that is, at that
point the announcement was set and the pledge had already been
reaffirmed to someone other than himself. In fact, he believes he was
told at the 5 :30 p.m. meeting on the 24th with Ehrlichman that he
would receive the reaffirmation at the 11 p.m. meeting.
As for Nelson, he says he was notified of a possible increase and of
the need for a reaffirmation of the pledge at the same time — but on the
23d, from Chotiner. While Nelson has denied that there was any
obligation because of the price support increase, he expressed the
opinion that the difference between, on the one hand, making contri-
butions by way of gratitude for action taken by the administration
and, on the other, making the payments in fulfillment of an obligation,
was to some extent “a matter of semantics.” 1 Moreover, he explained
that he felt his refusal to reaffirm would have had an adverse impact
on price supports and other matters of concern to dairy farmers.
If the dairymen knew in their own minds that they were willing to
meet their commitments, the question arises as to why was the re-
affirmation sought by Ehrlichman at that time? It should be noted
that as of March 23, 1971, over 7 months had passed since the time the
$2 million pledge was first discussed by the dairymen with Colson (and
communicated to the President) and 5 months since the meeting at the
Madison Hotel was held with Colson, Evans, and Kalmbach to arrange
for the contributions. In the intervening period, the milk producers’
attempts to secure a price support increase from the administration
had been rebuffed, and a boycott of Republican fundraising efforts
was being seriously contemplated by at least several dairy leaders.
Certain White House and campaign officials may thus have genuinely
feared a loss of dairy support. If that developed, it would have meant
a loss to the President’s campaign of that $2 million from the milk
producers at a time when the President’s fundraisers were trying to
raise “early money” for the campaign while the President trailed Sen-
ator Muskie in a leading Presidential poll by a full five percentage
points.
Moreover, since the dairy lobby had sought an increase to 90 percent
of parity, it might not have appeared certain to White House and cam-
paign officials that an increase by the President to 85 percent would
“get them off our backs”, that is, satisfy the milk producers and as-
sure the President of the milk producers’ campaign support. When
viewed in that light, the contemporaneous acts of (1) notifying the
dairymen that an increase to 85 percent was imminent and (2) solicit-
ing a reaffirmation of the pledge, would indeed have been critical 2
and sufficient to resolve the mutual concerns of White House and
1 Nelson, 15 Bearings 6695.
2 Indeed, while the milk producers proceeded after the March 1971 decision to openly
contribute to the President’s campaign, they were secretly providing corporate assistance
to certain Democratic Presidential candidates, as detailed In another portion of the
Report.
667
dairy industry officials with respect to both the price support increase
and the dairy contributions to the President’s campaign.
(d) Statutory Restrictions . — In evaluating these events, it should
also be noted that it is a Federal felony for a public official to solicit,
accept or agree to receive anything of value “in return for . . . being
influenced in his performance of any official act or . . . being in-
duced to do or omit to do any act in violation of his official duty” or for
any person to offer anything of value to a public official for such pur-
pose. 3 Moreover, it is a felony for a person to offer to a public official
or for a public official to solicit, accept or agree to receive anything of
value for himself “for or because of any official act performed or to be
performed” by such official. 4 Finally, if anything of value is offered
“for or because of” an official act even if it has no impact on that
act and the official responsible for the act accepts it with that knowl-
edge, the official may violate the Federal bribery statute.
5. NELSON-PARR CONVERSATION
The evidence that an arrangement was confirmed at the Chotiner-
Nelson-Kalmbach meeting is further corroborated by testimony con-
cerning an incident that appears to have followed the meeting. Parr
testified on December 21, 1973, that sometime on the night of March 24,
after the Republican fundraising dinner, Nelson spent about 1 y 2 hours
away from Parr and the rest of the milk producers. 5
Parr testified about his conversation with Nelson when he returned :
Mr. Weitz. When he came back, did you ask him where he
had been ?
Mr. Parr. Yes, sir.
Mr. Weitz. What did he tell you ?
Mr. Parr. None of my business.
Mr. Weitz. Did he tell you anything further referring to
the meeting or what he may have found out ?
Mr. Parr. Yes. . . . He was optimistic towards the price
support.
Mr. Weitz. What did he say ?
Mr. Parr. He said that — gave me the impression that he
was optimistic, completely optimistic about the price support.
* * * * *
Mr. Weitz. It was pretty clear that it was going to be in-
creased, not just, “gee, I hope, or we have got a good chance,”
but pretty certain ?
Mr. Parr. Something along that line. Yes sir. 6
When asked about the reason for the dairy commitment and contribu-
tions, Parr replied :
Mr. Sanders. Did you ever state to anyone in the White
House or in the reelection campaign of the President, that
AMPI or the other dairy co-ops would contribute a certain
amount of money to the President’s reelection, if the milk
price-support level was raised in March 1971 ?
3 IS U.S.C. § 201(b), (e).
* 18 U.S.C. 5 201(f), (g).
5 Parr, 15 Hearings 6824.
6 Parr, 15 Hearings 6823.
668
Mr. Parr. No, sir.
Mr. Sanders. You never made any such representations?
Mr. Parr. No, sir.
Mr. Sanders. To your knowledge, did Mr. Nelson?
Mr. Parr. No ; not to my knowledge.
Mr. Sanders. To your knowledge, did any other responsible
official in AMPI ?
Mr. Parr. No, sir.
Mr. Sanders. Or any of the other dairy co-ops?
Mr. Parr. No, sir, not that I know of.
Mr. Sanders. No doubt you have some appreciation for the
fact that substantial contributions followed in 1971 and 1972
to the Nixon reelection, and an observer might feel from the
fact that those heavy contributions were made that there is
some relationship between those two events.
If those latter contributions were not made as a result of a
commitment to make them in return for an increase in the sup-
port, why in fact were they made ?
Mr. Parr. As I have testified, we were going to make sub-
stantial contributions, and we made them.
Mr. Sanders. In other words, it was something to the effect
that you have said before, that you support persons who have
helped you ?
It is not a matter of a commitment in advance, but it is a
matter of being willing to help those who have helped you?
Mr. Parr. That’s the way that I always was taught. 7
Nelson testified that when he returned to his hotel suite after the
meeting with Kalmbach and Chotiner, Parr and perhaps others were
present. Although he is certain he spoke to Parr, he does not believe
he told him of the meeting. 8
The next day, the 25th, the price support increase was announced.
Kalmbach testified that the same day he met with Ehrlichman and
reported to him that he had met with Chotiner and Nelson who had
reaffirmed the commitment. 9
H. March 25 Price Support Decision and the Aftermath
On March 25, the USD A announced the decision to raise the price
support level. The reaction to the increase was immediate — many offi-
cials at the Department of Agriculture were shocked and disheart-
ened ; the milk producers were elated and within 1 week, initial steps
were taken to contribute $250,000 to the President’s campaign.
1. THE MARCH 2 5 ANNOUNCEMENT
The March 25 announcement of the price support increase was
issued in the form of a press release. OMB Assistant Director Bice
said that he and Whitaker reviewed the release before its issuance,
■> Parr, 15 Hearings 6881-82.
8 Nelson, 15 Hearings 6574-75.
0 Kalmbach, 17 Hearings 7811. According to Ehrlichman’s logs, Kalmbach met Ehrlich-
man and some other Individuals for lunch at noon on the 25th. Kalmbach’s agenda Indi-
cated It was originally scheduled for 1 :00 p.m. Kalmbach says that although they
discussed matters unrelated to the milk producers, he took the opportunity to tell Ehrlich-
man, privately, that the milk producers’ pledge had been reaffirmed the previous evening-
669
although the announcement was prepared and issued with apparently
little or no consultation with the line officials at USDA responsible
for the price support program.
The USDA release, setting the price support level at $4.93, or
approximately 85.1 percent of parity, 10 presented the following single
justification :
Secretary Hardin stated that there is a constant analysis of
the milk production situation, and that farmer costs have
escalated sharply paricularly in concentrate feed which has
gone up $10 to $20 per ton. Farmers have no way to cut
other costs to compensate for those which have risen. 11
As discussed above, the increase in farmer costs had been argued
to Hardin prior to the March 12 decision not to increase price sup-
ports. Moreover, there had, in fact, been no new economic data devel-
oped by either USDA or the milk producers between the first and
second decision, 12 and the USDA line officials normally responsible
for price support matters had no input in the “constant analysis” to
which Hardin referred. Although Under Secretary Campbell could
not point to any specific reconsideration of the economic data at the
Department, he observed that reasonable men could arrive at different
conclusions on an appropriate price support level on the basis of
economic data available in March 1971. 13
On March 7, 1972, Hardin executed an affidavit in the civil case of
Nader v. Buts, in which he presented his account of the circumstances
of and the reasons for the second decision. He stated that :
The decision to set the price support level at $4.93 per cwt.
was based entirely on a reconsideration of the evidence on the
basis of the statutory criteria. 14
He specifically denied that the decision had been based on any con-
sideration other than those outlined in his affidavit. However, he
made no reference whatsoever to the fact that it was the President
who announced the decision at the afternoon meeting on March 23
which Hardin attended, and that the President’s decision was based
“first and foremost” on grounds other than the economic merits. 15
Sidney Cohen, the ASCS official responsible for preparing milk
price support dockets and who prepared the docket for the March 12
decision, was not involved prior to the March 25 public announcement
in the preparation of either the press release or an amended docket,
a procedure he considered somewhat unusual. 16
When Cohen was asked shortly after March 25 to prepare an
amended docket after the decision was announced, he was told he was
“to keep it as brief and simple as possible.” 17 He complied with a two-
10 Undersecretary Campbell said in a staff interview that the $4,93 figure, rather than
$4.92 (85 percent of parity) was proposed to “confound the experts" who relied on the
parity concept. As discussed in Section IV. I, below, this extra penny exceeded the level
m almost every pending bill before Congress, and was worth an estimated additional $2
million to $10 million to dairy farmers.
11 Cohen Affidavit, Exhibit C, 17 Hearings 7875.
See Vol. 117, pt. 7 Congressional Record 8625 (1971) (Remarks of Senator Allen).
13 Campbell, 17 Hearings 7784.
14 Hardin Affidavit, 17 Hearings 7919.
15 White Paper Press Release, 17 Hearings 8073.
16 Cohen Affidavit, 17 Hearings 7847-50.
17 Ibid. According to Cohen’s superior. Keister Adams, Adams was told by Carl Farring-
ton, Deputy Director of Commodity Operations at ASCS, to have an amended docket
drawn up with “the less said the better."
670
page docket including a one paragraph “justification” which referred
“to increasing labor, waste disposal, and other costs on dairy farms,” 18
but not specifically to Hardin’s sole justification in the March 25
press release, rising feed costs. The docket was not approved by the
CCC Board until May 12, 1971. According to US I)A. officials, includ-
ing Cohen, Don Paarlberg (Director of Agricultural Economics) , and
Clarence Palmby (Assistant Secretary for Commodities), this was
the first time in the history of the milk support program in which
an increase was announced before the original level was implemented
and given an opportunity to take effect. 19 Cohen’s aide, S.E.T. Bogan,
says there was a certain amount of “shock and unhappiness” at USD A
over the decision, and USDA Economist Anthony Mathis says that
those who worked on the original docket were “horror stricken” and
that there were no technical reasons for the reversal. 20
Paarlberg was particularly upset, because he felt at the time — and
still did when he testified before the Select Committee — that the deci-
sion was not economically justified and that it put Hardin in the most
embarrassing situation of being reversed in so short a time by industry
action. Paarlberg was also deeply concerned because of the rumors
that milk producers’ money had played a role in the administration’s
reversal. 21
Paarlberg explained his concern as follows :
I am an official of this Government, and I like to think that
decisions are made on the basis of the merits of the case or on
the basis of political forces as they customarily operate and
as they are accepted, and the departure from or the indica-
tions of departure from that kind of deportment was a matter
of concern to me. 22
Paarlberg received what he considered “indications of departure
from [customary] deportment” when, some weeks after the decision,
Palmby told him that, contributions to President Nixon’s reelection
campaign was a factor in the reversal. 23 Although Palmby did not
recall such a conversation and says he knew of no such facts, he did
say that he felt bad about the reversal and may have “spouted off”
about, its effect on then-pending international trade negotiations. 24
Paarlberg, who has known Palmby for over 15 years, and who
testified he did not believe it was Palmby ’s habit to engaged in “loose
talk,” took the conversation quite seriously and told only his wife about
it. 25 Since Paarlberg felt there was nothing more he could do about the
matter and that, it was particularly “difficult” and “unpleasant” for
Hardin, he never discussed it again w i th either Hardin or Palmby. 2 ®
Whether or not Palmby had any basis for the remark he appears to
have made to Paarlberg, the fact that such a remark could have been
made — and accepted — is indicative of the effect the price reversal had
on the morale of the Department of Agriculture.
18 Cohen Affidavit, Exhibit C, IT Hearings 7879.
10 IMd. Palmby, 16 Hearings 7145-46 ; Paarlberg, 16 Hearings 7522.
20 Bogan and Mathis interviews.
21 Paarlberg, 16 Hearings 7521-22. Paarlberg testified on March 13, 1974 ; the sub-
stance of his testimony was obtained in a staff interview on January 18, 1974.
22 Paarlberg, 16 Hearings 7526.
23 Paarlberg, 16 Hearings 7524.
24 Palmby, 16 Hearings 7148.
23 Paarlberg, 16 Hearings 7524-25.
23 Paarlberg, 16 Hearings 7523, 7526.
671
2. MILK PRODUCER REACTION TO THE DECISION
In light of the circumstances surrounding the milk price support
increase, it is understandable that, like some USD A personnel, the milk
producer officials who had participated in the events leading to the
decision apparently believed there was a quid pro quo. In a letter to a
farmer-member of Mid- Am, written a few clays after the decision,
Hanman stated :
Mid- Am and AMPI, with some help from DI, got this re-
versal from the Nixon administration on the price support-
level. And I can assure you, that the TAPE and ADEPT
programs, as well as SPACE (DI’s program) played a major
part in this administrative decision. This just proves that a
minority, regardless of its number, if it is well organized,
dedicated, and adequately financed, can prevail. 27
William Powell, President of Mid-Am and one who attended the
meeting with the President, was even more blunt in a letter to another
dairy farmer in assessing the impact of the daily trust contributions:
The facts of life are that the economic welfare of dairymen
does depend a great deal on political action. If dairymen are
to receive their fair share of the governmental financial pie
that we all pay for, we must have friends in Government.
I have become increasingly aware that the sincere and soft
voice of the dairy farmer is no match for the jingle of hard
currencies put in the campaign funds of the politicians by
the vegetable fat interests, labor, oil, steel, airlines, and
others . . .
On March 23, 1971, along with nine other dairy farmers,
I sat in the Cabinet Room of the White House across the table
from the President of the United States, and heard him eorn-
pliment the dairymen on their marvelous work in the consoli-
dating and unifying of our industry and our involvement in
politics. He said, “You people are my friends and I appreci-
ate it.” Two days later an order came from the U.S. Depart-
ment of Agriculture increasing the support price for milk to
85 percent of parity, which added from $500 to $700 mil-
lion to dairy farmers milk checks. We dairymen cannot afford
to overlook this kind of economic benefit. Whether we like
it or not, this is the way the system works. 28
Within 1 week after the price-support increase, (1) TAPE took
steps to lend ADEPT $50,000 to contribute to Republican committees
(the subject matter of the earlier Louisville airport meeting with
Alagia) and ( 2) 100 committee names were sent by Harrison to Nelson
for a $250,000 contribution to be made for the President’s reelection.
Within a month’s time, TAPE checks were drawn, each for $2,500,
to 76 of the committees. Although these checks were voided and the
process eventually took several more months to complete, by Septem-
ber 1971 TAPE had contributed to 75 committees and the other two
dairy trusts to 18, for a total contribution of $232,500 to 93 committees.
27 Hanman letter. IT Hearings 8139.
23 Powell letter, 17 Hearings 8141-42.
672
A more detailed discussion of these contributions is presented below
in section Y.B.
In the course of this contribution activity, there were repeated
references by the milk producers to the fact that these contributions
were part of a commitment which, according to some, was made in
exchange for the increase by the President. For example, in the course
of preparing to make those contributions to the President’s campaign
in April (several weeks after the price-support decision), Sarah Bez-
dek, Bob Lilly’s secretary, says she was told by Lilly that “this is what
we agreed to do ... to get the price support raised” and “this is the
way they [the Republicans] wanted it.” 29
Marion Harrison, in a letter to Nelson in June 1971, forwarding
the names of some of the first 100 committees for the series of $2,500
contributions, stated, “Sometimes it is difficult to honor a commit-
ment.” 30
When questioned concerning his understanding of the circumstances
of the commitment, Harrison testified :
Mr. Weitz. Do you know whether the matter of political
contributions or this commitment or intention was ever dis-
cussed with any representatives in relation to the milk
support ?
Mr. Harrison. Not to my knowledge.
Mr. Weitz. No one ever told you about any conversation?
Mr. Harrison. No.
% % H* ■ *
Mr. Sanders. Do you know of any facts that would prove
or tend to prove that the March 25, 1971, decision to raise
the support level for milk was based on any promise, agree-
ment, understanding, or commitment that the dairy trusts
or any of their affiliates would provide funds to a certain level
for the reelection of President Nixon ?
Mr. Harrison. I know of no such fact. ... 31
Gary Hanman, in a report to the ADEPT committee in September
1971. referred to the $15,000 ADEPT contribution to 6 of those same
100 committees as “part of the continuing commitment which we had
with the Administration.” 32
Hanman explained his use of the term “commitment” :
Mr. Weitz. And the contributions that were in fact made
by ADEPT were made as a part of the general commitment
to the President or in support of the President, and not in ex-
change for or as part of the commitment specifically for the
milk price support decision in 1971 ?
Mr. Hanman. That’s right. 33
In September 1971, after the contributions were made and adverse
publicity arose with regard to a possible connection between the price
support decision and the contributions, Ted Van Dyk, one of AMPI’s
consultants, cautioned Parr about AMPI’s activities. According to
Van Dyk, Parr explained that they made the contributions to the
29 Bezdek interviews, March 14, 1974, and April S, 1974.
30 Harrison Exhibit 3, 14 Hearings 6287,
81 Harrison, 14 Hearings 6270, 6280.
32 Hanman Exhibit 2, 14 Hearings 5903-04.
33 Hanman, 14 Hearings 5894.
673
President because they had no choice — they felt they “had to” do it. 34
Looking back on their effort in March to secure an increase, George
Mehren says that Nelson observed that . . of all the people on the
White House staff, the one that could really make the ball move was
Mr. Chotiner.” 35
The milk producers also were willing to show their gratitude to J ohn
Connally, approximately 1 month after the favorable price sup-
port decision. As discussed in section V.A., AMPI delivered $10,000
in cash to Jacobsen who indicated it was for Connally’s use. Later in
the year, another $5,000 was allegedly delivered to Jacobsen for the
same purpose.
3. WHITE HOUSE TREATMENT OF THE COMMITMENT AFTER MARCH 2 5
A number of White House memos beginning shortly after the price
support increase was granted indicate that White House and FCKP
officials anticipated a substantial amount of money from the milk
producers and concluded that a new pledge had been made by the
milk producers to contribute as much as $90,000 each month begin-
ning on April 1 — just 1 week after the price support increase 1 . 36
In the months that followed, Haldeman met with Dean to discuss
what was to be done with the “milk money.” Throughout, there was a
concern about concealing the fact that the milk producers were sub-
stantial contributors to the campaign. Ultimately, as discussed below,
the 1971 contributions were publicized and speculation of a possible
quid pro quo ensued. Only then, late in 1971 and early 1972, were the
contributions first discontinued for a time and then finally cut off just
prior to April 7, 1972, the effective date of the new campaign dis-
closure law.
I. In Defense of the President — A “Gun to Our Head”
The White House White Paper on “The Milk Price Support Deci-
sion” was issued earlier this year “to rebut the allegation that a prom-
ise of political contributions from the dairy industry induced the
President to increase the milk price support level” in March 1971.
Conceding that the decision was not based solely on economic argu-
ments -which was the initial administration position, 37 the rebuttal
takes up three themes: (1) the principal reason for the President’s
decision was congressional pressure — a “gun to our head” 3S — in the
34 Van Dyk. 16 Hearings 6989.
35 Mehren, 16 Hearings 7237.
30 In a memorandum from Strachan to Haldeman dated September 11, 1971, Strachan
refers to the $232,500 contributed by the milk producers at that point and describes it
as “slightly more than one-half of the amount that should have been delivered on the
commitment ($90,000 per month.)” Strachan Exhibit 4, 16 Hearings 7483. This works
out to an expected amount of $450,000 by September 1 which, at a rate of $90,000 per
month, would date the commitment 5 months prior to September 1 — in other words,
April 1, 1971, the effective date of the milk price support increase. This contribution
pattern would, if continued until the election, have amounted to nearly $2 million — to
fulfill the original pledge. Kalmbach stated he may have learned of the $90,000 com-
mitment at the March 24 evening meeting with Chotiner and Nelson. Kalmbach. 17
Hearings 7603. Nelson does not think lie had discussed it that evening, but acknowledged
prior discussions with Colson about spreading the contributions over a number of months
in order to avoid the publicity over a large lump-sum payment. Nelson Interview.
37 See USDA Press Release. March 25. 1971, Cohen Affidavit. Exhibit C, 17 Hearings 7875 ;
and discussion in Section IV.H, supra; Hardin Affidavit. 17 Hearings 7916-19.
38 In the President’s press conference on November 17, 1973. before the Associated
Press Managing Editors, the President first referred to congressional pressure on milk
price support legislation as a “gun to our head.” The White Paper, 17 Hearings 8081,
refers to this “gun to our head.”
674
form of bills requiring an increase coupled with a desire on the Presi-
dent’s part to avoid a veto which might cost him farm support in his
reelection effort; (2) the economic merits of the case for an increase
were taken into account, and events since the time of the decision have
shown that the increase was, in fact, “in the national interest;” and
(3) although the President was motivated by “traditional” political
considerations, the milk producers’ political activity, including their
$2 million pledge and contributions, did not influence the President’s
decision and were in any event, small compared to the President’s
overall fundraising effort.
The committee submits the following analysis of the contentions
in the White Paper.
1. CONGRESSIONAL PRESSURE
The White Paper suggests that a price-support bill — possibly even
veto-proof— was certain to pass Congress and that the President, in
order to retain administrative flexibility and farmers’ political sup-
port, adopted a compromise approach. The White Paper’s analysis
overstates the extent and timing of congressional support. Moreover,
the President’s action was not a compromise measure but, in fact,
was more favorable to dairy farmers than nearly all the pending
bills. 39
a. Extent of Congressional Support
The White Paper appears to overstate the strength of congressional
efforts as it affected the President’s decision. In its calculation of the
Senators and Congressmen who “put a gun” to the President’s head,
the White House includes a number of bills and cosponsors not identi-
fied until after the President announced his decision. The White
Paper states :
Immediately following the Agriculture Department an-
nouncement of March 12, 1971, a campaign was initiated on
Capitol Hill by both Democrats and Republicans for manda-
tory legislation to increase the parity level to 85 or 90 per-
cent. Thirty separate hills were introduced in the House of
Representatives between March 16 and March 25 with this
specific goal in mind. One Hundred and twenty-five Members
of the House of Representatives introduced or cosponsored
legislation to support the price of manufacturing milk at a
level or not more than 90 percent nor less than 85 percent.
With 29 Senators and more than 100 Congressmen actively
spearheading the effort to achieve an increased parity rate
for the dairy industry, it thus became increasingly clear that
mandatory legislation would be enacted * * *
(Emphasis in original.) 40
In fact, the figure “30 separate bills” mentioned in the White House
press release includes 8 bills not introduced until after the President
30 Although not referred to In the White Paper, Congressional support was also mani-
fested by letters to USDA. See Section IV.B.2.
40 White Paper, 17 Hearings 8078-79.
675
made his decision. 41 Furthermore, of the 125 Members of the House of
Representatives mentioned above, 32 Congressmen did not cosponsor
legislation until after the President’s decision.
Whereas the White Paper states that “29 Senators . . . [were]
actively spearheading the effort,” only 2 Senators introduced the legis-
lation and not all of the additional 27 cosponsors had added their
names to the bills by March 23, when the President acted. Senator Gay-
lord Nelson (Democrat, ’Wisconsin) introduced S. 1277 on March 16,
1971 to support the price of milk at no less than 85 percent of parity.
On March 19, 1971, Senator Hubert Humphrey (Democrat, Minne-
sota) introduced his own bill S. 1294 calling for an 85 percent mini-
mum. Senate procedure permits a Senator to add his name to a previ-
ously introduced bill, 42 and records of the Senate enrolling clerk
indicate that the 27 cosponsors were not formally added until April 5,
1971, 13 days after the President had made his decision. 43 Records of
certain Senators indicate that at least several Senators communicated
their position to Nelson by March 23 but that at least one did so
afterward but before April 5. Thus, available records do not support
the White House contention that 29 Senators had publicly supported
the bill by March 23.
But even if it is assumed that most of these 27 Senators (1 Republi-
can and 26 Democrats) decided between March 16 and March 23 to
cosponsor the Nelson bill and that they communicated their decision
to the White House, the total number of supporters, including Senators
Nelson and Humphrey, represented less than one-third of the Senate.
The White Paper states that by March 25, 125 Congressmen
cosponsored legislation to support the price of milk at not less than
85 percent. The White Paper goes too far in two respects. First, the
actual number of cosponsors was 118; the apparent error in the
White Paper probably resulted in part from double-counting those
members who cosponsored more than one bill. Second, by the after-
noon of March 23 (the more relevant date when, according to the
White Paper, the President announced his decision), only 90 Con-
gressmen, or 21 percent of the House membership had cosponsored
bills calling for support at 85 percent or more of parity. 44
5. The Likelihood and Timing of Passage
One can only speculate whether any of the bills would have passed
both Houses of Congress. To some extent, the number of cosponsors
indicates support for the increase, and the White House White Paper,
itself, lays great stress on the number of sponsors. In addition, influ-
41 The Committee has drafted a chart summarizing information relevant to all legisla-
tion introduced in early 1971 dealing with the milk price support level. See Legislation
Chart. 17 Hearings S143-46. It should be noted that the chart Includes bills which were
introduced after the President informed his staff of his decision on March 23, 1971, but
before the President’s decision was announced on March 25. _
42 This procedure is not followed in the House. No Congressman can be be added as a
cosponsor to a bill which has already been introduced. This accounts for the fact that
Congressman Smith (D-Iowa) introduced four identical bills with different^ cosponsors.
43 Although the cosponsors decided to go on the bill prior to April 5. most of them have
indicated through their staffs to the Select Committee that their records do show
either ivhen the decision to cosponsor was made or whether it was communicated to the
White House. , . .
44 In his November 17 press conference, the President stated that 102 Members of
Congress signed a petition demanding not 85 percent of parity but 90 percent support
price . . This statement is grossly inaccurate and is contradicted by the White Paper.
As noted above, only two Congressmen introduced bills calling for a minimum support price
level of 90 percent.
676
ential Members of Congress, including some key members of the
Democratic congressional leadership, supported the bills. As noted
above the congressional support resulted at least in part from an
intensive lobby by the dairy co-ops of dairy States representatives, and
there is a question whether the bills would have gained sufficient sup-
port for passage from representatives of other areas.
Enactment of a price support bill, if forthcoming at all, was not
imminent in March 1971. The 1971 activities on Capitol Hill must be
evaluated within the context of the overall legislative process. Under
normal circumstances, several events precede the enactment of legisla-
tion dealing with the milk price support level. After a bill is intro-
duced, it is referred to the committee responsible for agriculture bills
of the House in which it is introduced. The committee requests from the
Department of Agriculture a report evaluating the bill. In order to
acquire sufficient information upon Which to base its report to the
full Senate or House, the committee usually conducts hearings on the
bill. Considering the evidence gathered during its hearings, the com-
mittee submits a report on the bill to the full Senate or House. The
bill must, of course, pass both Houses of Congress before it is sent to
the President for his consideration. Of course, on occasion, bills are
moved rapidly through the legislative process.
As of March 23, 1971, no hearings had been conducted or even
scheduled for the purpose of considering milk price support legisla-
tion. At that point, the Department of Agriculture had not issued a
report on any of the bills, although a USD A report was requested
by the Senate and House Agriculture committees on three bills setting
an 85-percent minimum, S. 1277, S. 1294, and H.R. 6188. Four
months later, in July 1971, the Department issued an unfavorable
report in H.R. 6188. 4B In light of the chronology of events prior and
subsequent to March 23, the President’s alleged reaction was, at best,
premature.
c. The Question of a Presidential Veto
The White Paper does not say that the President could not have
successfully vetoed a price support bill. 46 It states that such a move
would have been “foolish and futile” and “politically disastrous” —
that he “could not veto it without alienating the farmers — an essential
part of his political constituency.” 47
Here again, the White Paper contradicts the President’s own prior
statement. In his November 17 press conference, the President stated
that he was advised that Congress would be able to override his veto
of any milk price support legislation. However, in the above quoted
passage from the White Paper, it is evident that the President ques-
tioned, not his ability, but the political wisdom with respect to his
chances for re-election, of exercising his veto power.
It is not clear why the President considered it “foolish and futile”
45 The report said that, in view of the March 25 announcement, the bill would have
been “without effect,” and that, in any event, the Department opposed further restrictions
on the discretion vested in the Department for commodity proexams.
48 As noted above, there is a question whether a bill would have passed. The likelihood
of Congress overriding a Presidential veto was even more remote, and, in fact, nine of
eleven vetoes by President Nixon up to March 1971, had not been overriden by Congress.
See Veto Chart, 17 Hearings 8149 for an analysis of congressional attempts to override the
President's vetoes from January. 1969 to March, 1971.
47 White Paper, 17 Hearings 8079.
677
to stick by a long-standing agricultural policy of his administration
of moving “away from Federal policies which provide massive subsi-
dies to agriculture.” 48 The emphasis on the White Paper and seem-
ingly at the March 23 meeting was, thus, not on the possibility of a veto
being overridden but, rather, on the “politically disastrous” impact of
a veto on the President’s “political constituency.”
d. Impact of the President's Decision
With regard to the impact of the President’s decision on price
support policies, the President’s action was no less “mandatory” than
the bills introduced in Congress. As noted above, the price support
level announced by the administration in March of each year may not
subsequently be lowered during that year. Therefore, the increase
in the price support level established by the President was effective
for 1 year, the same time period proposed in each of the bills intro-
duced in response to Secretary Hardin’s initial announcement.
More than neutralizing congressional demands, the President ex-
ceeded the impact of a legislated price support increase in two sig-
nificant respects. First, the administration established a support level
of $4.93 per hundredweight, a level 1 cent higher than that called for in
virtually every bill introduced in 1971. Various experts, including the
Department of Agriculture’s leading economist, Dr. Paarlberg, have
estimated that the total cost of the March 1971 increase was at least
$50 million and perhaps $300 million 49 and might have been much
higher were it not for the general inflationary ti'end. Based on this
estimate, the 1 cent addition to the suggested 85 percent level was
worth $2 million to $10 million more than 34 of the 36 bills introduced
in Congress.
Second, the President’s decision was of even greater impact on con-
sumer milk prices — because of its timing — than a comparable minimum
support level which might have been legislated later by Congress. As
noted above, some time was likely to have passed following March
1971 before Congress and the President (and, in the event of a Presi-
dential veto. Congress again) would have been able to enact milk price
support legislation. During the so-called spring “flush” period, when
milk production and the supply of milk are customarily greatest, milk
prices are at their nadir ; later in the year, milk prices customarily rise
and the support level has little or no direct effect on prices producers
(and consumers) pay for milk. In 1971, a legislated increase in the
support level almost assuredly would not have become effective by
April 1 and would thus have had less impact on the cost of milk to
consumers and the Government during at least part of the spring
“flush period” as well as the remainder of the year. In contrast, the
President’s decision, in March, raised the support level just in time
to have the maximum impact on milk prices.
In the President’s November 17 press conference before the Asso-
ciated Press managing editors, the President said that his concern, in
March 1971 was that “I don’t want to have the price jigged up here if
we can keep it and get the supply with the present support price.”
48 White paper, 17 Hearings 8078. That a high level of farm subsidies was a policy of
the Democrats rejected by the administration is another reason why the President should
have been prepared to resist Democratic congressional pressure.
40 Paarlberg, 16 Hearings 7520 ; Campbell, 17 Hearings 7785-86.
678
2. JUSTIFICATION ON THE MERITS OF THE PRESIDENT’S DECISION
As explained above, there were arguments advanced by dairy leaders
and by certain Members of Congress in March 1971, in favor of a milk
price support increase, particularly in view of rising farm costs and
falling income, and the Select Committee did not weigh the merits of
the economic arguments for and against an increase. The allegation
investigated by the committee with respect to the President’s decision
is not whether he made the right decision but whether he or his aides
under his direction made the decision at least in part for the wrong
reasons, that is, in contemplation of or because of an offer of political
contributions.
Quite understandably, the White House, in its White Paper, does not
contend that the economic merits for an increase constituted the sole
reason for the President’s decision or that it was even one of the two
fundamental themes of the March 23 afternoon meeting when the
President announced his decision. True, the merits of the case had
presumably been presented to the President, and the White Paper says
they were a factor upon which the President based his decision. 50
However, at the time the President made his decision, key agricultural
experts in the executive branch responsible for the price support pro-
gram were against a higher price support level on the merits.
The White Paper is willing to assert only that Treasury Secretary
Connally argued that the milk industry’s case also had merit on strictly
economic grounds, and rising costs for dairy producers were men-
tioned at the March 23 afternoon meeting. 51 In his testimony before the
Select Committee before the issuance of the White Paper, Secretary
Connally did not recall any reference at the meeting to increased feed
co^ts, 52 the sole justification stated by Secretary Hardin in his public
announcement of the increase 2 days later 53 and presumably the
strongest economic ground for a price increase. Dr. Rice of OMB
recalls no sophisticated economic discussion at the meeting and, in
fact, Hardin and Campbell were still opposed at the outset of the
meeting to an increase on the economic merits.
Nonetheless, the White Paper attempts to justify the President’s de-
cision by claiming that, in hindsight, the decision “proved to be sound
economics.” 54 The committee questions the probative value of this
hindsight justification in view of the issue of a quid pro quo. More-
over, the USDA’s chief economist, Dr. Paarlberg, disputes the accuracy
and relevancy of the White Paper’s analysis.
The "White Paper refers to the downward trend in milk production
in the late 1960 's and the decision by Secretary Hardin, in March 1970.
to grant a substantial price increase to reverse this trend. It also notes
that, the 1970 increase — the largest ever granted by an administration
at the start of a marketing year 55 — helped to end the decline and that
50 White Paper Press Release, 17 Hearings 8073-75.
61 White Paper, 17 Hearings 8080.
52 Connally. 14 Hearings 6064.
63 Cohen Affidavit. Exhibit C, 17 Hearings 7875.
64 White Paper, 17 Hearings 8086.
53 March 12 1971 USDA press release, Cohen affidavit, exhibit A. 17 Hearings 7852.
679
the 1971 increase “provided still further assurances against the resump-
tion of a, downward trend in production.” 56
The problem with this proof is that it consists of a truism — -higher
price supports usually mean more production — and, like all truisms, it
proves nothing. 57 Of more relevance is the fact that at the time of the
increase in March, 1971, there was unanimous agreement among all
Government experts (apparently including Secretary Hardin and
Under Secretary Campbell) that milk production would rise substan-
tially with a $4.66 support level, although not quite as much as with a
$4.93 level. 58
The White Paper argues that the level of Government purchases was
at least relatively lower in the 1972 fiscal year — which it asserts is the
“fiscal year in question” — than in 1971. In fact, its emphasis on the
fiscal year (July 1 to June 30) rather than the marketing year (April 1
to March 31) is in part misplaced. Since milk supply is usually greatest
during the spring months (say, April, May, and June) immediately
following the price support decision each March, milk prices are more
likely to fall to the support level requiring the Government to pur-
chase greater amounts during that period than at other times of the
year. Therefore, contrary to the suggestion in the White Paper, the
high figures for the 1971 fiscal year (which cover the crucial April-
May-June period immediately following the President’s decision in
March 1971) are at least as relevant to assessing the impact of the
President’s decision as do figures for fiscal year 1972.
The White Paper tries to minimize the fact of high milk production
in 1971-72 by showing a drop in CCC inventories as of January 31,
for the years 1968 through 1972. 59 Dr. Paarlberg made several criti-
cisms of that presentation. First, he pointed out that there is nothing
68 White Paper, 17 Hearings 8086. The view of the White Paper puts extraordinary reli-
ance in the ability of supply to increase almost instantaneously in response to an increase in
the price level. Obviously, the number of dairy farmers and the productivity of individual
cows cannot increase rapidly. While a higher price for milk might occasion a reduction
in the number of cows sold for beef, this effect might not be noticeable at a time when
the price of beef also was rising. For 1971, the wholesale price index (wpi) for cows sold
for commercial purposes increased approximately 10 percent while the wpi for manu-
facturing milk rose 5 percent. .
57 According to the logic in the white paper, any increase could be viewed as providing
“further assurances against the resumption of a downward trend in production.
58 As of Mar. 5, 1971, the USDA estimated a production increase at the $4.66 level
of 0.5 billion pounds and at the $4.92 level of 0.9 billion pounds. See Cohen affidavit,
exhibit B, 17 Hearings 7866. The actual amount of increased production from 1970—71
to 1971-72 fiscal years w r as 2 billion pounds. See Paarlberg exhibit 2. 16 Hearings 7533.
What’s more. Government purchases continued at a high level as a result of this in-
creased production — the effect that Hardin, Campbell and others at USDA had predicted
if an increase were granted. See Paarlberg exhibit 2, supra. The figures, in billions of
pounds, are as follows : ,
USDA net
purchases
1969- 70
1970- 71
1971- 72
1972- 73
4. 4
7. 2
6 . 6
5.0
Also, a high level of purchases coupled with the higher support price-— both resulting
from the President’s decision — also meant a continuation in 1971—72 of the high cost to
the Government of the milk price support program. See Paarlberg exhibit 1, 16 Hearings
7532. The figures, in millions of dollars, are as follows : „
Net support
Fiscal year : purchases
1969- 70 6
1970- 71 315. 4
1971- 72 267. 0
1972- 73 135 - 8
59 White Paper, 17 Hearings 8087.
680
to demonstrate that the January date is a representative time of the
marketing year. Second, since inventories are a function of both pur-
chases and distribution, these figures do not necessarily prove that
the Government bought less — instead, it may have decided to distribute
more. Third, even if inventories were low as a result of a low level
of production and purchases, Dr. Paarlberg testified that the need for
milk for distribution for USD A and other governmental programs
is not a proper basis to raise the milk price support level. He pointed
out that, if more milk is needed by the Government, the CCC is
empowered to go into the market and buy it, instead of pushing up the
support level of all milk marketed in the country* 60
With regard to the inflationary impact of the President’s decision, it
was Avorth anywhere from $50 million to several hundred million dol-
lars to the dairy farmers. 61 The White Paper conceded that the retail
price of Avhole milk rose in 1971-72 but stated that the rate of increase
was less than the general rate of inflation, and that Avithout more
production occasioned by the President’s decision, milk prices would
have been even higher. 62
3. MILK PRODUCER CONTRIBUTIONS AND THE PRESIDENT
The White House Paper states that although the President was
advised of the milk producers’ $2 million pledge and, on March 23,
of their decision to begin making political contributions, this informa-
tion did not influence his decision that day. To reinforce this denial, it
attempts to show ( 1 ) that the actual amount of reported milk producer
contributions of several hundred thousand dollars to the President’s
campaign Avas a relatively insignificant part of the President’s cam-
paign effort, and (2) that these Presidential contributions were a
relatively small proportion of the total amount of milk producer con-
tribution activity.
The facts are that (1) AAdien the President made his decision, the
milk producer commitment represented one of the three largest and
earliest pledges to his campaign at a time Avhen he trailed in a leading
Presidential poll, and there Avas every reason to expect that the com-
mitment would be honored; and (2) the milk producers contributed
far more to the President than to all other 1972 Presidential candidates
combined.
a. Significance to the President of Milk Producer Contributions
When the President considered the price support decision in March
1971, he Avas deciding a matter of great financial interest to one of his
00 Paarlberg, 16 Hearings 7527-28*
91 Campbell set the figure at between $50 million and $100 million. Campbell, 17 Hearings
7785—86. Nelson, in his yearend report to AMPI in 1971, estimated it at $300 million.
Nelson, 15 Hearings 6655. William Powell, President of Mid-Am, put the figure at from
$500 million to $700 million. Dr. Paarlberg says the $300 million figure is credible. Paarl-
berg, 16 Hearings 7520. Campbell agreed that different people could reach different con-
clusions based on the data and that Paarlberg was more qualified to do so than he. Camp-
bell, 17 Hearings 7787.
92 White Paper, 17 Hearings 8087. Nelson testified before the committee that during the
morning meeting with the President on Mar. 23. the point was made that higher prices
to the farmer would mean higher income to them, higher taxes paid by them to the Fed-
eral Government, and a reduction in the cost to the Government of a price support increase.
Nelson stated that the President seemed to be impressed by this argument. Nelson. 15
Hearings 6566. In staff interviews, both Dr. Paarlberg and Dr. Rice characterized the
argument as unsophisticated, inasmuch as such an argument would logically support any
increase in subsidies. Furthermore, even if there were some validity to the argument and
the cost to the Government would be less than anticipated, one important factor is left
out of the analysis — the cost to the consumer.
681
most important contributors. The President knew that the milk pro-
ducers had pledged $2 million to his campaign. Even by the standards
of the 1972 Presidential campaign, this amount was enormous, rep-
resenting one of the three largest pledges to his campaign, 63 and a
full one-twentieth of his entire projected campaign budget of $40
million.
Xor did the President and his fundraisers as of March 23, 1971, have
any reason not to expect the full amount of the pledge ; after all, by
that time the milk producers had already contributed $100,000 in cash
in 1969 to the President’s chief fundraiser. The events that ultimately
led to a cessation of milk producer contributions to the President be-
fore the $2 million pledge was fulfilled did not take place until long
after the President’s decision in March 1971, and there was no reason
to anticipate them at that time. Indeed, as discussed below, Republican
fundraisers were still working in early 1972 (and again in October
1972) to obtain first the full $2 million and then, later, at least $1
million.
The milk money was particularly important to the President in two
other respects. First, the pledge — made over 2 years before the election
and apparently reaffirmed on March 23-24, 1971 — represented the
“early money” which is critical to every campaign. 64
Second, since the dairy co-op leadership normally made substantial
contributions to the Democratic Presidential nominee, and in March
1971, one Presidential poll showed the President trailing the leading
Democratic candidate, Senator Muskie, by a full 5 percentage points,
the pledge took on an even greater significance.
b, Significance to the Milk Producers of Their Contributions to the
President
According to the White Paper, the milk producers reported con-
tributions to the President’s 1972 campaign of approximately
$427.000. 65 In addition, they delivered $100,000 in cash in 1969, and
there is evidence that another $200,000 was provided to his campaign
in late 1972. 66 Taking just the reported contributions, however, they
amounted to a substantial portion of their overall contribution
activity.
The White Paper tries to minimize the “some $427,000” by compar-
ing it to contributions of the three dairy trusts to all candidates at
all levels. This comparison is misleading since the dairy trusts con-
tributed to hundreds of Federal, State and local candidates — not one
of whom reportedly received from the dairymen more than one-sixth
of the amount they contributed to the President.
With respect to dairy trust reported contributions in the 1972 Presi-
dential campaign — certainly a more relevant measure of dairy par-
ticipation in Presidential politics than that used by the Whte Paper
the dairymen’s reported contributions to the President were more than
®Kalmbach stated that he had received only two other pledges of similar magnitude—
John Mulcahv and Clement Stone each pledged $1 million for 1971 and $1 million for
1972, and another $1 million for 1973 if there was a deficit in the campaign. Kalmbach,
17 Hearings 7592.
w See Haldeman. 16 Hearings 7169-70. _ . , Knr ,
65 The milk producers reported contributions to the Presidents campaign or ■ SooAouu,
plus $95,000 to Republican committees that the white paper apparently includes in its
computation. See Keema Affidavit, 17 Hearings 7959—69 ; White Paper, 17 Hearings 8083.
66 See Section VII, infra.
682
three times greater than those to all Democratic Presidential candi-
dates combined. 67 What’s more, the greater portion ($237,500) was
contributed prior to April 7, 1972 — while all Democratic candidates
were reportedly receiving slightly more than $18,000 from the dairy-
men. 68
The White Paper claims that the President had in mind “support”
of the milk producers only at the foils when he made his decision in
their favor ; by all accounts, however, the “support” they had promised
(of which he was aware) and, in fact, provided, included substantial
contributions to the President’s campaign. Perhaps the most cogent
argument in this connection are the facts which speak for themselves —
as discussed above, at the same time the President was making his
decision privately, his top aides were arranging for the milk producers
to reaffirm their “support” as a condition for the public announcement
of the increase. The dairymen agreed, the announcement was made
and, as detailed in the following section, the promised contributions
began to flow.
Y. MILK PRODUCERS’ CONTRIBUTION ACTIVITY IN 1971
FOLLOWING THE MILK PRICE SUPPORT DECISION-
MONEY FOR CONNALLY, THE PRESIDENT’S CAM-
PAIGN, AND THE ELLSBERG BREAK-IN
After the favorable price support decision was announced on
March 25, 1971, the milk producers turned their attention to honoring
their commitment of contributions to the President’s campaign. Within
1 week after the announcement, arrangements were underway to con-
tribute another $50,000 to the RNC committees and to begin giving the
first $250,000 to 100 committees whose link to the President’s campaign
was kept confidential. Nearly the entire $250,000 was in fact contrib-
uted by early September 1971, at which time AMPI also accomplished
one of its long sought-after objectives — the President attended and
addressed an AMPI annual convention.
At the time of that convention, an additional contribution was made
by the milk producers — at the special request of Charles Colson.
Colson testified before a State grand jury that the milk money was
used to pay for the break-in of the office of Daniel Ellsberg’s psychia-
trist, Dr. Lewis Fielding.
Even before these contributions were made, the milk producers made
at least one, and perhaps two, payments to Jake Jacobsen for Secretary
Connally’s use. About 1 month after the milk price support increase
was granted, Jacobsen requested and received from AMPI $10,000 in
cash stating it was for Connally, but Connally and Jacobsen denied
that Connally accepted the money. There is evidence that another
$5,000 in cash, also from corporate funds, was requested and provided
later in the year by Jacobsen for Connally and that these payments
were related to Connally’s assistance not only in the price support
matter, but also other matters, including a Justice Department anti-
trust suit against AMPI. Both Jacobsen and Connally have denied
any knowledge of the second transaction.
07 See Keema. Affidavit, supra.
68 Ibid. Even taking into account alleged corporate contributions to 1972 Democratic
Presidential candidates, discussed elsewhere in the committee report, the contributions
to the Nixon campaign still far surpassed the total Democratic Presidential campaign
activity of the milk producers.
683
A. AMPI Cash Payments foe Connally
Shortly after Jake Jacobsen had sought — and obtained — the assist-
ance of Treasury Secretary Connally in the effort to secure a price
support increase in 1971, Jacobsen sought — and obtained — $10,000
in cash from AMPI for Connally ’s use. Both Connally and Jacobsen
deny that Connally ever took or used the money and Jacobsen has
testified that the $10,000 remained in his safe deposit box untouched
for over 214 years. However, the committee has obtained documenta-
tion from the Bureau of Engraving and the Federal Reserve System
indicating that some of the bills of the $10,000 were not even placed
into circulation until almost 2 years after Jacobsen says he placed
them in his box.
There is also evidence that Jacobsen acquired another $5,000 in
similar fashion later in the year. Jacobsen denies even requesting,
much less receiving, the $5,000 payment, and Connally denies any
knowledge of the $5,000 matter.
1. $10,000 FOR CONNALLY
a. Lilly's Testimony
Based on his contemporaneous notes and bank records, Lilly testi-
fied that on April 28, 1971 — approximately 1 month after the milk
price support increase— Jacobsen called Lilly in San Antonio and
requested $10,000 in cash for John Connally. 09 Although Jacobsen says
that lie asked for the money so that Connally could make personal
political contributions, Jacobsen concedes that he told Lilly only that
it was “for Connally’s use.” 70 He says he made the request “since [Con-
nally] had been helpful to us in the price support thing.” 71
Jacobsen says he didn’t know where Lilly was going to obtain the
money. 72 It should be recalled that Jacobsen had participated in the
$100,000 loan in December 1969, and the payback scheme, allegedly
involving the use of corporate funds. 73 In addition, J acobsen requested
and received the $10,000 from Lilly in the form of cash and failed to
provide to Lilly committee names to enable TAPE to meet its report-
ing requirements, virtually obliging Lilly to use corporate, rather than
TAPE, funds.
Lilly did. On May 3, he contacted AMPI’s principal conduit, Stuart
Russell, and asked for $10,000 without telling him it was for Connally.
Because it would necessitate his double-billing AMPI to recoup the
money, Russell allegedly asked Lilly whether there wasn’t a less
“costly” means of getting the money, such as setting up “dummy”
expense accounts for AMPI to cover the $10,000 and eliminate the need
for the conduit double-billing AMPI for the $10,000 as income to the
68 Lilly, 14 Hearings 5961.
70 Jacobsen, 15 H earings 6421— 22.
71 Jacobsen, 15 Hearings 6421. As detailed in Section IV above, Connally was indeed
“helpful’' in urging the President to grant an increase. According to materials publicly
released by the House Judiciary Committee and included in appendix D to the Select Com-
mittee's report, Connally reminded the President at the afternoon meeting on March 23,
1971 — when the President granted an increase — of the milk producers’ substantial contri-
bution activity.
73 Jacobsen, 15 Hearings 6421.
73 See Section II, supra.
684
conduit and another $10,000 for his excess taxes. 74 Lilly conferred with
Nelson who, according to Lilly, authorized him to borrow the money
from the bank, as he had done for the $100,000 in December 1969. Lilly
did so and the loan was eventually repaid by means of the costly
scheme of laundering AMPI corporate funds through its conduits. 75
On May 4, 1971, Lilly borrowed $10,000 in cash from Jacobsen’s
bank. Citizens National Bank in Austin, and executed a 60-day note
as he had done for the December 1969 loan. When Lilly delivered the
cash to Jacobsen at the bank, Lilly says Jacobsen told him he was
going to put it in Connally’s “cash box” or in his “cash box” and hold
it for Connally. 715
b. Jacobsen's and Connolly's Testimony
Jacobsen says that Lilly delivered the money in $100 bills to him,
and that, instead of placing it intact in his box, he took it home and,
during the next week or two, changed it at several banks into smaller
bills and then placed that money in his safe deposit box. He says he
took these steps in mid-1971 “because there are a lot of politicians
that do not like to take $100 bills.” 77
Jacobsen says he then met with Connally sometime in June or July
1971, and told him that he had $10,000 available from the milk people
for Connally’s use for personal political contributions. He says that
Connally told him that since he was a Democrat in a Republican ad-
ministration, he felt, it was inappropriate for him to contribute to
either party and that therefore he refused the money. 78
Jacobsen says that he kept the money in his box since he “knew we
were going to get into this Presidential campaign,” and, in the second
half of 1972, after Connally had left the administration and headed
Democrats for Nixon, offered the money to Connally for Democrats for
Nixon. 79 Jacobson, who was assisting Connally in the campaign effort,
says that Connally refused without explanation, although Jacobsen
assumes the reason was the adverse publicity (discussed below) over
the series of $2,500 milk producer contributions in 1971 to the multiple
committees. 80 He failed to reconcile the fact of Connally’s alleged
refusal in 1972 with Connally’s contemporaneous acceptance ( arranged
by Jacobsen) of $50,000 for Democrats for Nixon (headed by Con-
nally) from the other two dairy co-ops who had been involved in the
same series of 1971 contributions. 81
Connally’s testimony before the committee on this matter is vir-
tually identical to Jacobsen’s. He testified that in the latter part of
June or early July 1971, Connally met, with Jacobsen who told him
that the milk producers were prepared to start making contributions
to various candidates in the 1972 campaign and that “he had avail-
74 Lilly, 14 Hearings 5961. Like Lilly, AMPFs comptroller, Robert Isham, told the
Select Committee staff, even before Lilly testified, that Russell once complained about the
conduit scheme and asked whether another system could be used, such as fake expense
accounts or the like. Isham Interview, supra.
75 See Lilly, 14 Hearings 5961—62. Nelson does not recall discussing this matter with
Lilly. Nelson, 15 Hearings 6648.
78 Lilly. 14 Hearings 5962.
77 Jacobsen, 15 Hearings 6423. Jacobsen testified that, while keeping the monev at home,
he went to a number of different banks, although not to his own bank, the Citizens’ National
Bank, to convert the money to smaller bills. He stated that he did this before talking to
Connally about the money. Jacobsen, 15 Hearings 6423-24.
78 Jacobsen, 15 Hearings 6424-25.
79 Jacobsen, 15 Hearings 6427-28.
80 Jacobsen, 15 Hearings 6428-29.
81 See section VII. A. 1, infra.
685
able $10,000 in cash” for candidates of Connally’s choosing. 82 Connally
says he refused and told Jacobsen that as a Democrat in a Republican
administration he wanted to be “nonpolitical” and not take “any inter-
est in party partisan politics . . Connally says that his refusal “ended
it” 83 until the next year when Jacobsen again offered Connally the
money.
According to Connally, Jacobsen raised the matter one more time —
in 1972 when Connally and Jacobsen were involved with Democrats
for Nixon. Connally says he again refused but, unlike Jacobsen’s ac-
count, he says he did explain his reasons. He says he told Jacobsen
that since AMPI had undergone a change in management and had tax
and antitrust problems with the administration, he preferred not to
take the money. 84
Jacobsen and Connally each testified that Connally did not tell him
to return the money to AMPI. 85 In fact, there is evidence that Jacob-
sen did not keep the money in his box as he testified, but that instead
Jacobsen disposed of some or all of the money.
c. Other evidence
Jacobsen says that the $10,000 in small bills remained in his safe
deposit box untouched from May 1971 until late 1973 when the FBI
took an inventory of it and that he did not give the money to Connally,
use it himself, or know of any other use of the money in the interim. 86
To the contrary, the committee has proof that some money in Jacob-
sen’s box on November 27, 1973, could not have been placed there until
well after 1971 and in one instance until March 1973 — nearly 2 years
after Jacobsen swears he put the money in the box.
On November 27, 1973, with Jacobsen’s consent, the FBI took an in-
ventory of $10,000 in one of Jacobsen’s safe deposit boxes. 8 ' The inven-
tory revealed a total of 4 $100 bills, 91 $50 bills and 250 $20 bills. 88 All
of the $100 bills were printed and distributed to commercial banks in
the 1960’s or before. However, an analysis of the records of the Bureau
of Engraving and of the Federal Reserve System indicates that at
least 34 of the 91 $50 bills were either not printed or issued to a com-
mercial bank for public use until after May 1971 when, according to
Jacobsen’s sworn testimony, he put the bills in his box. In fact, at least
16 of the bills were not put into commercial circulation until 1972, and
at least 1 bill not until 1973. 89 One $50 bill was not even yet in the
possession of a commercial bank as of March 28, 1973 — roughly 8
months before the inventory was taken. 90
82 Connally, 14 Hearings 6069,
« Connally, 14 Hearings 6071. In January 1072, George Mehren replaced Harold Nelson
as general manager of AMPI. In 1971 and 1972, the IRS and the Justice Department were
engaged in investigations of AMPI and on February 1. 1972, a civil antitrust suit was
filed by the Department. There is evidence that Connally, while still Treasury Secretary,
was consulted by AMPI on both these matters and assisted them in seeking a favorable
resolution of both matters, although Connally denies doing anything more than passing
on their complaints to Mitchell, then CRP Chairman. See Section VI., infra.
85 See Connally, 14 Hearings 6071 ; Jacobsen, 15 Hearings 6425.
88 See Jacobsen, 15 Hearings 6426-27. . », 00 fw
« See Jacobsen, 15 Hearings 6426 and Jacobsen Exhibit 18, 15 Hearings 6488-94.
88 This totals $9,950; Jacobsen’s attorney informed the committee that Jacobsen told
him that the full $10,000 was counted and that there was apparently one $50 bill acci-
dentally omitted from the FBI list. Jacobsen, 15 Hearings 6426.
89 See Elmore Affidavit, 17 Hearings 7891. , . ,
90 Since Federal Reserve Bank records for $20 bills are less comprehensive than for
$50’ s and $100’s, the committee did not determine the distribution dates for the $20 bills
in the inventory.
686
On February 21, 1974, Jacobsen was indicted by a District of
Columbia Federal grand jury for perjury in testifying before the
grand jury that he did not touch the $10,000 in his box between May
1971 and November 1973. 91 The indictment was dismissed by the Chief
Judge, George L. Hart of the Federal District Court of the District
of Columbia on May 3, 1974. 92
Since the original $10,000 was received in cash and used sometime in
the past 3 years, it has not been possible to determine its disposition
with any certainty. Jacobsen maintained two safe deposit boxes at the
bank. The bank entry records for box number 998, in which $10,000
was found in November 1973, shows no entries into the box by Jacob-
sen in May 1971 — the month he put the money in the box according to
his testimony — and only one, on May 19, by his secretary. 93 However,
entry records for the other box, number 865, show an entry by Jacob-
sen on May 4, 1971, at 4 :50 p.m. — the day he received the cash from
Lilly.
Although the first time Jacobsen and Connally met after Jacobsen
received the money was May 14, 94 Connally and Jacobsen each testi-
fied that they did not discuss the matter of the cash until June or
July, and Connally ’s logs show no private meeting between them until
June 28, almost 2 months after the payment from Lilly.
2. $5,000 FOR CONNALLY
Lilly testified that in late 1971 he made another payment to Jacob-
sen who said it was for Connally’s use, and there is independent evi-
dence to corroborate Lilly’s testimony. Jacobsen denied requesting or
receiving any additional money and Connally denies any knowledge
of the matter.
Lilly says that on October 13, 1971, he received a message that
Jacobsen had called, and, when he returned the call, Jacobsen told
him that he was going to Washington soon and wanted to tell Con-
nally that he would have another $5,000 for him in “Jake’s safety
deposit box at the Citizens National Bank in Austin in a short time.”
Lilly says he told Jacobsen, “OK, he could tell Mr. Connally that.” 95
Lilly obtained the money directly from Russell in the form of a
check dated November 3 for $5,000 payable to cash. 96 Lilly says that
on the morning of November 10, 1971, he flew from San Antonio to
Austin with the Russell check. When he arrived at the Austin airport,
91 Jacobsen was indicted for one count of lying under oath for the following testimony.
Q. And it is your testimony that that $10,000 was the $10,000 which you put into
that box within a number of weeks after it was given to you by Mr. Lilly and it was
untouched by you between then and the time you looked at it with the FBI agent?
A. That is correct.
Q. You are certain about that?
A. Yes, sir.
02 Judge Hart ruled that since Jacobsen was asked whether that was his prior testimony
and not whether that testimony was true, Jacobsen’s answer was literally true and, under
a Supreme Court precedent, not perjurious. On July 29, 1974, subsequent to the preparation
of this report, a Federal grand jury in Washington, D.C.. handed down an indictment
charging Jacobsen with a violation of Federal law, title 18, United States Code, section
201 (f), prohibiting the giving of a gratuity (a total of $10,000) to a Federal official, Treas-
ury Secretary Connally. Connally was charged with tw T o counts of violating Federal law,
title 18, United States Code, section 201(g), by accepting the $10,000, two counts of per-
jury, In violation of title 18, United States Code, section 1623, and one count of conspiracy
to obstruct the grand jury and Select Committee investigations, in violation of title 18,
United States Code, section 371.
63 See Bethke Affidavit, 17 Hearings 7835.
84 Connally’s logs, subpenaed by the Committee, also reveal that on both May 7 and
May 8. Jacobsen called and spoke to Connally by telephone.
05 Lilly. 14 Hearings 5962-63.
03 See Lilly, 14 Hearings 5963-64; Lilly Exhibit 23, 14 Hearings 6042.
687
he met by accident Parr, Jacobsen, Joseph Long, Jacobsen’s law
partner, and Tom Townsend, another AMPI employee. Lilly then
went to the Citizens National Bank, cashed the check and delivered
the cash to Jacobsen in Long’s presence, at their law offices. Lilly says
that Jacobsen left at about 11 :45 a.m. to go to the bank and put the
money in his safe deposit box. 97
Jacobsen and Long deny any knowledge of the request or delivery
of the money; similarly, Connally states that he never discussed the
$5,000 with Jacobsen. 98 However, since November 14, 1973, when Lilly
testified before the Select Committee concerning these events, the
committee has obtained several pieces of relevant evidence unknown
and unavailable to Lilly at the time of his testimony. First, according
to his logs, Connally met with Jacobsen on October 14, 1971 — the day
after Jacobsen allegedly told Lilly that he was going to Washington
soon and wanted to tell Connally about another payment. Neither
Jacobsen nor Connally gave any inkling as to why Jacobsen would
have any other reason to discuss with Lilly his plan to see Connally
other than in connection with Jacobsen’s request for more money,
purportedly for Connally.
Second, with respect to the chance meeting between Lilly and
Jacobsen, Long, Parr and Townsend, on November 10, Townsend
testified that sometime in 1971 he was on his way with Parr from Little
Rock to San Antonio, and they stopped in Austin to see Jacobsen.
While they were in the airport with Jacobsen and Long, he says Lilly
accidentally met them, exactly as Lilly had testified, and Parr cor-
roborates this. 99 Third, the $5,000 Russell check was, according to the
stamp on its reverse side, negotiated at Citizens National Bank in
Austin on November 10, 1971. Fourth, Jacobsen made an entry into
one of his two safe deposit boxes at 12:30 p.m. on November 10,
1971 1 — 45 minutes after the time Lilly testified that Jacobsen left to
put the money in his box.
The committee attempted to recall Jacobsen but his attorney in-
formed the staff that Jacobsen would not testify as to matters relating
to his receipt and use of AMPI cash for Connally but would, if called,
plead the fifth amendment. On May 22, 1974, the committee voted to
apply to the court for an order compelling Jacobsen to testify and
granting him use immunity for that testimony, and the court ruled
it would issue the order on June 21, 1974. However, at the request of
the office of the Special Prosecutor, which informed the committee that
it was conducting an ongoing investigation of matters involving
Jacobsen, the committee on June 19 voted to withdraw its application,
and the court granted the committee’s motion to withdraw its appli-
cation on June 20, 1974.
07 Lilly. 14 Hearings 5963.
08 See Connally, 14 Hearings 6073; Jacobsen, 15 Hearings 6428-30; Long Affidavit, 17
Hearings 7969-73.
09 Townsend, 16 Hearings 7092, 7103. This airport meeting is discussed elsewhere in
the Report. See Chanter 7. Lilly testified that, in his presence in the airport, Jacobsen
gave an envelope to Parr, saying “Here is the $5,000 for Wilbur Mills.” Lilly, 14 Hearings
5963. Although they could not specify a time, both Jacobsen and Parr admit that Jacobsen
gave Parr $5,000 at the Austin airport for Mills’ Presidential campaign sometime in 1971
or 1972. and Parr says that Lilly was present on some other mission. See Jacobsen, 15
Hearings 6430-32; Parr. 15 Hearings 6776-77, 6791, 6899. Moreover, although he cannot
recall if this was the time of the Austin airport meeting. Townsend’s calendar shows
that he went to San Antonio on November 10, 1971. See Townsend. 16 Hearings 7102.
The 85,000 for Parr may have been generated by two checks from Jacobsen and Long.
7990 d 9i nd Cashed on November 10, 1971, totaling $5,000. See Parker Affidavit, 17 Hearings
1 See Bethke Affidavit, supra.
688
B. Milk Producers’ Contributions to the President’s
Campaign — the 1971 AMPI Convention
During the balance of 1971 after the price support decision in March,
the three dairy trussts contributed another $287,500 to Presidential and
other Republican committees— $232,500 to the first 93 Nixon commit-
tees; the $50,000 to other Republican committees and committed on
March 24 ; and as discussed in the following section, $5,000 for the
President’s campaign that was used to pay for the Ellsberg break-in.
This was in addition to the earlier $10,000 and $25,000 contributions
to Republican committees on March 22 and 24. There is no suggestion
or evidence that anyone connected with the RNC was aware of the
reason for the contributions.
1. $50,000 FROM ADEPT AND $10,000 FROM SPACE
Within 1 week after the meeting at the Louisville Airport on the
night of March 23-24, steps were taken by TAPE to loan $50,000 to
ADEPT which then contributed the $50,000 as part of a commitment
made by Hanman for ADEPT on March 24. 2
On March 30, 1971, W. DeVier Pierson, one of AMPI’s attorneys
who advised TAPE, wrote a letter to Robert O. Isham, the trustee
for TAPE, giving his opinion that TAPE could legally make the
loan and was not required to report it. 3 That same day, Marion Har-
rison sent nine committee names — the same committees to which
SPACE and TAPE had contributed $35,000 the previous week — -
to Hanman of Mid-Am and stated that he would be sending a 10th
name later when it was available. 4
Upon receipt of the committee names, William Delano of ADEPT
drew nine checks, each for $5,000. He dated them April 5, but they
were not sent until later in the month, after the loan from TAPE
to ADEPT was made. On April 16, Isham sent to Delano a $50,000
TAPE check together with a note to cover the ADEPT loan, and on
April 19, Delano signed the note and returned it to Isham. That same
day, Hanman mailed the first $45,000 to Harrison. 5 6 The 10th commit-
tee name was not sent to Hanman by Harrison until the fall of 1971
when, on November 9, 1971, ADEPT contributed $5,000 to that com-
mittee ( Salute to the President Dinner Committee) , e
The $50,000 contribution was made to fulfill a commitment made
on March 24, 1971 7 — as a result of discussions between the milk pro-
ducer leaders at the Louisville Airport meeting. 8 As noted above,
Hanman understood that at least part of the ADEPT contributions
would go for the President’s reelection campaign. 9 However, there is
no evidence that any portion of these moneys were transferred to any
Presidential committee.
3 See Hanman, 17 Hearings 7741-42, 7744.
3 See Nelson Exhibit 9, 15 Hearings 6716.
4 See Hanman Exhibit 1, 14 Hearings 5901.
5 See Isham Deposition and Exhibit D, Nader v. Butz (November 29, 1972).
6 See Keema affidavit, supra.
7 Hanman, 17 Hearings 7741, 7744. In Hanman’s April 19 letter to Harrison, he said :
As I mentioned on the phone, we need the name of one more committee to finish onr
commitment.” See Hanman letter, 17 Hearings 8150.
8 See Nelson. 15 Hearings 6640, As discussed above, the AMPI people present at the
meetin S had told Alagia they needed the loan to ADEPT by March 29. See Section
IV.F.10, supra.
9 Hanman, 14 Hearings 5884-85.
689
2. PUBLIC DISCLOSURE OF $232,500 TO NUMEROUS NIXON COMMITTEES
a. The Contributions
The late-night meeting on March 24 attended by Chotiner, Nelson,
and Kalmbach was followed not only by the price support announce-
ment but also shortly thereafter by 100 committee names being sent
to the milk producers for a $250,000 contribution to the President’s
campaign. By April 1, 1971 (the effective date of the new price sup-
port level), Nelson had received from Marion Harrison a list of the
committee names. 10 Although Nelson testified that it was his under-
standing and intent that all three dairy trusts woidd contribute to
those committees, 11 he acknowledged that TAPE, the largest and
most active, was to contribute the major share. 12 Accordingly, on April
26 and May 3, 75 TAPE checks each for $2,500 were drawn to 75 of
the committees on the list. 13 However, these checks were never deliv-
ered and later were voided, and the contributions were not completed
until July 1971 and thereafter.
The delay in consummating the contributions was attributable not
to the milk producers who, following the favorable price-support
decision, were apparently anxious to honor their commitments, but
to those responsible for the work of organizing the committees, which
included drafting a charter, selecting a chairman and treasurer, and
opening a bank account. As discussed in section IV.E, Robert Bennett
had been given that primary responsibility by Colson and Kalmbach.
Bennett says that he received a copy of the charter form for the com-
mittees from Thomas Evans, who in turn had received it from John
Dean in March 1971. 14 When Lee Nunn (the former director of the
Senatorial Campaign Committee) joined the staff of the Citizens Com-
mitee for the Re-Election of the President in April 1971, the com-
mittees were not yet formed, and Nunn says that one of his first
assignments was to help Bennett organize the committees. 15
In his discussions with Kalmbach and with Hugh Sloan, who was
treasurer of the Citizens Committee (and later of FCRP), Nunn
learned that several hundred committees would be needed ultimately
for milk producer contributions but that 100 committees were needed
immediately. 16 However, the process of forming the committees pro-
ceeded slowly even after Nunn and Sloan began helping Bennett.
White House aides discussed the expected milk producer contribu-
tions and expressed concern over the delay in the formation of com-
mittees. Since the contributions were expected to be substantial — $2
million — and to be made in regular monthly installments of $90,000
beginning April 1, 197l. 17 Haldeman considered them a “good funding
base for the setting up of the [Citizens Committee]” which had been
organized in March 1971, just a few weeks earlier. 18 In fact, on May 18,
Haldeman and Dean met and decided that “[t]he milk money can pay
10 See Nelson Exhibit 11, 15 Hearings. 6718-22.
11 Nelson, 15 Hearings 6641-42.
12 Nelson. 15 Hearings 6631.
13 See Lilly exhibit 27, 14 Hearings 6050 ; and Wright report, p. 73. Lilly first provided
to the Select Committee in November, 1973, copies of TAPE check stubs for 13 voided
checks. Later, records of the remaining 62 checks were discovered.
14 See charter attached to Dean memorandum. 17 Hearings 8131—34.
15 Nunn, 17 Hearings 7541 ; Sloan interview, October 13, 1973.
18 Nunn, 17 Hearings 7541-42.
17 See Strachan, exhibit 4, 16 Hearings 7483, and discussion in Section IV.H.4, suara.
18 Haldeman, 16 Hearings 7170 ; see 2 Hearings 532-33.
690
for the 1701 activities up to the campaign.” 19 However, based upon
the recommendation of Kalmbach, Nunn, and Strachan, Haldeman
decided several days thereafter not to use the “milk money” to pay
for campaign expenses, because both Kalmbach and Nunn were afraid
of the “risk of discovery.” 20 But Strachan says that, even after he
made the decision, Haldeman was still anxious to receive the “milk
money.” 21
Despite Haldeman’s reported concern with the expected dairy con-
tributions, he stated :
Mr. Sanders. And the gist of your testimony, then, is that
the milk producers had a desire to contribute to the reelection
of the President, and had made known the specific level of
contribution, but that this was totally unrelated to any favor-
able action taken by the Government or to be taken by the
Government.
Mr. Haldeman. That is my specific understanding of what
the basis of their intent to contribute was, that it was not to
be considered to be related to any action or any desired action
or any completed action by the Government.
Mr. Sanders. That is all I have.
Mr. Dorsen. Tn that connection, Mr. Haldeman, you men-
tioned one occasion when you believed the subject was raised
as to whether there might be a quid fro quo for the contribu-
tions, and I believe you said it Avas made clear to you that
the dairy industry expected no quid fro quo.
Mr. Haldeman. I don’t think I said — my recollection is not
that the question was raised of whether there was a quid fro
quo , but rather that the positive was raised. The point was
made that it was to be understood that there was no quid
fro quo , there was no commitment contingency.
Mr. Dorsen. Did this come up once or more than once?
Mr. Haldeman. I think probably more than once. 22
Although the 75 $2,500 checks from TAPE discussed above had
been drawn and, according to a memo from Strachan to Haldeman,
transferred as of May 21 to the Nixon committees being formed by
Bennett, 23 another 2 to 3 months passed before the committees were
in proper form, apparently necessitating the Avoiding of those checks
and reAvriting of them later. Accordingly, the process of sending Nixon
committee names to the milk producers began all over again in June.
On June 16, Harrison sent a letter to Nelson AA r ith the names of 25
of the 100 committees and the name and address of each chairman
and treasurer. As noted above, Harrison’s letter expressed his apparent
frustration over the process : “Sometimes it is difficult to honor a com-
mitment.” 24 Tavo Aveeks later, on June 29, Harrison sent to Nelson
ie Exhibit 34-26, 3 Hearings 1230. It was estimated at the meeting that those expenses
would run approximately $35,000 to $40,000 per month, or slightly less than one-half of
the milk producers' monthly commitment. However, Sloan says that the monthly expenses
were at first approximately $50,000 to $100,000 and, by the fall of 1971, $200,000 to
$300,000 per month. Sloan interview, supra.
20 See Strachan, exhibit 3, 16 Hearings 7478-82.
21 See Strachan, 16 Hearings 7429.
22 Haldeman. 16 Hearings 7184. As noted in section III.B. above, Haldeman noted :
[Olbviously an offer of a $2 million contribution is a matter of interest. . . . And
the question, if not spoken, automatically arises as to why. Haldeman, 16 Hearings
7167.
23 Strachan Exhibit 3, 16 Hearings 7478-82.
24 Harrison Exhibit 3, 14 Hearings 6287.
691
information on more committees. 25 Since, as Harrison pointed out,
these additional committee names were all included in the original list
Nelson had received in April, Harrison urged Nelson to make the con-
tributions immediately : “[I]t might be good politics to move fast.” 26
Harrison may have been concerned that, through no fault of their
own, the milk producers had not been meeting their commitment, a
fact of which, as discussed below’, the White House did take notice. 27
In any event, Nelson did “move fast.” On July 9, Isham sent 50 TAPE
checks to Harrison in the amount of $2,500 each for a total of $125,000
and made payable to the 50 committee names sent by Harrison. Harri-
son gave the checks to the Citizens Committee and they w T ere deposited
in the accounts of the 50 respective committees in August.
The second round of contributions to the remainder of the 100 com-
mittees — this time by all three trusts — was made in August and Sep-
tember 1971. Harrison testified that when he sent the names of the
committees to Nelson, he sent copies to the other two co-ops, Mid-Am
and HI. 28 When the expected contributions were not immediately re-
ceived, Harrison enlisted the assistance of his colleague, Murray
Chotiner. 29
Chotiner says that before Harrison left in early August for a trip
to Europe, Harrison told him that the money was not coming in as
planned. 30 Chotiner confirmed this with the Citizens Committee (pre-
sumably Nunn) and then called Parr who told him that the milk pro-
ducers didn’t have the necessary committee names. On August 5, 1971,
Chotiner sent to Parr and Isham a list of names of 100 committees
which had finally been organized, including the 50 to which TAPE
had already contributed. 31
Immediately thereafter, Parr distributed the 49 32 remaining names
to the three trusts : 25 to Isham, 12 to Gary Hanman of Mid-Am and
12 to DI. 33 On August 19 and 20, both SPACE and ADEPT sent their
checks to Chotiner: SPACE contributed $30,000 to the 12 commit-
tees assigned to it but ADEPT contributed to only 6 committees
for a total of $15,000. 34 In a letter to Parr on the same day, Hanman
explained that: “[o]ur balance in the fund was insufficient to handle
all 12 committees.” 35 The following month, on September 10, TAPE
contributed its $62,500 to the remaining 25 committees. 30
Of the $232,500, TAPE contributed $187,500 to 75 committees (to
complete its portion of the contribution it had undertaken in April),
ADEPT $15,000 to 6 committees and SPACE $30,000 to 12.
25 Nelson Exhibit 12, 16 Hearings 6723-29.
20 Ibid.
27 See Strachan Exhibit 4, 16 Hearings 7483.
28 Harrison. 14 Hearings 6473.
29 Both Chotiner and Harrison have said that Chotiner was not involved in the mechanics
of the contributions until that time. See Harrison 14 Hearings 6273 ; Weltz Affidavit,
Exhibit B. 17 Hearings 8009-10. However, Chotiner was certainly instrumental in the
meeting on the night of March 24 leading to the contributions, and, according to the
May 21 memo from Strachan to Hahleman, Chotiner communicated with Nunn about the
progress on organizing the committees and transferring those first 75 checks to the com-
mittees. See Strachan Exhibit 3, 16 Hearings 7478-82, and discussion supra.
30 See Weitz Affidavit, Exhibit B, supra.
31 See Parr Exhibit 9, 15 Hearings 6930.
32 Only 99 of the 100 committees were to be used. The 100th was chaired by E. Howard
Hunt, and Bennett says it was decided that, in view of Hunt’s work at that time on the
White House “Plumbers” unit, it would have been inappropriate and too risky to link
him publicly to the multiple committees and the President’s campaign.
33 See Parr Exhibit 10, 1'5 Hearings 6931 and Townsend Exhibit 6, 14 Hearings 6372.
The Committee subpenaed the relevant records of AMPI, TAPE, DI and SPACE but was
not provided with any written record of how or when the 12 committee names were sent
to DI.
34 Keema Affidavit, supra.
as Townsend Exhibit 6, 14 Hearings 6372.
30 See Keema Affidavit supra.
692
b. Rose Mary Woods’ List
The $232,500 contribution by the milk producers to the 100 secret
Presidential committees was important enough to merit separate at-
tention by the President’s personal secretary, Pose Mary Woods, by
being placed in a separate category in a campaign report to her. In the
list of large contributions to the President’s campaign prior to April 7,
1972, and kept by Woods, there is a separate page with the following
information : 37
HOUSE ACCOU NT
M.P._ $232,500
Milk Producers Association
T.A.P.E.
P.O. Box 32287
San Antonio, Texas 78216.
A.D.E.P.T.
Springfield, Missouri.
S.P.A.C.E.
Kentucky Trust
508 Portland Building
Louisville, Kentucky 40202.
Hugh Sloan, FCRP treasurer, says he prepared several lists of large
pre-April 7 contributors for use in soliciting moneys for the cam-
paign after April 7, and that he gave one copy to Stans, chairman of
FCRP. 88 Although Rose Mary Woods, in an executive session before
the Select Committee, said that she could not even identify a copy of
the list shown to her, 39 she did testify that she received such a list in
the latter part of June, 1972. 40 Neither she nor Sloan nor anyone else
connected with the fund-raising effort interviewed by the committee
could explain what was meant by the “House Account” for the milk
money.
Despite her custody of the list of contributors which, according to
Sloan, Avas used for fundraising for the duration of the campaign.
Woods denied ever having had “anything to do with raising of political
campaign funds,” and claimed that she kept the list only for invita-
tions to White House dinners. 41 However, Sloan says that a list of
contributors for White House invitations Avas put together in 1973
when the campaign Avas over — not in mid-1972 when Woods says she
received the list. 42 In fact, a question is raised as to Avhether her cus-
tody of a list of large contributors — and the amount of their contri-
butions — even for the purpose of extending White House dinner in-
vitations to such persons because of their large contributions Avas in-
consistent Avith the President’s announced policy of not being in-
formed of contributions to his campaign until after the election. 43
37 See Woods exhibit 2, p. 121. reprinted at 17 Hearings 8168.
38 Sloan interview, December 1, 1973.
39 The list had been furnished to the committee by the White House.
40 Woods, 22 Hearings 10233.
41 Woods, 22 Hearings 10209.
42 Sloan interview, December 1, 1973.
43 See section III, supra .
693
c. Public Disclosure
White House aides were concerned about disclosure of a link be-
tween the milk producers contributions and the President’s campaign, 44
and they took certain precautions to minimize the possibility of such
disclosure. Ultimately their efforts proved unavailing.
Since District of Columbia political committees were not required
to report their expenditures (including any transfers to the President’s
campaign), the Bennett committees were organized in the District
of Columbia to receive the dairy contributions. As previously noted,
the dairy trusts reported to the Clerk of the House, but the ultimate
beneficiary, the President’s campaign effort, was not disclosed in the
trusts’ reports.
Furthermore, the committees were made to appear as anonymous as
possible. For treasurers of the committees, Bennett enlisted employees
of the two banks in Washington used for the 100 committee accounts,
and the bank addresses were designated as the official addresses for the
committees to be included in reports to the Clerk of the House. 45 The
names of the committees did not include the President’s name 46 and
were drawn in such a way so as not to be linked to the President, such
as “Americans United for Honesty in Government.”
Despite all their efforts, the link between the milk contributions
and the President’s campaign was uncovered. Apparently because the
milk producers erroneously reported the address of the chairmen of
several committees, rather than the bank addresses given for the
treasurers, 47 some of the chairmen were contacted by investigators and
it became known that the committees were established by Bennett for
the President’s campaign. Tn addition, two persons (who had orig-
inally been included as chairmen and then replaced by Bennett) were
inadvertently included in the lists sent to the milk producers and
subsequently included in their public reports ; these individuals then
informed the Clerk of the House that they knew nothing of the com-
mittees that had been reported as receiving the contributions. 48
The milk producer reports were corrected, but the publicity linking
the President and the milk producers had begun, and White House
officials and fundraisers were quite upset. Internal White House
memorandums in September 1971, indicate that Haldeman, Dean,
Colson. Kalmbach, Nunn, Strachan, Bennett, Evans, and Bobert Odell
(executive director of the Republican National Finance Committee)
met and discussed the investigations and stories by several newsmen
on the milk money situation. 49 According to one memo, Bennett advised
Nunn that: “No damaging information has been released.” 50
But the damage had been done. Newspaper articles appeared which
suggested that a quid pro quo may have taken place for the President’s
milk price-support decision, and all parties to the transaction — the
44 See Strachan exhibit 3, 16 Hearings 7478-82.
45 See Nunn. 17 Hearings 7542.
40 In fact. Nelson requested an opinion letter from Harrison before making any contri-
butions and Harrison complied on July 8 (the day before TAPE contributed $125,000) say-
ing that the committees were l)ona fide and were to support the reelection solely of the
President. See Nelson, 15 Hearings 6645 and Nelson exhibit 13, 15 Hearings 6730-41.
47 Bennett interview, supra.
48 See Nelson, 15 Hearings 6627, 6646-47.
49 Strachan Exhibits 4 and 7, 16 Hearings 7483, 7485-88.
50 Strachan Exhibit 4, 16 Hearings 7483.
694
milk producers, the White House, and Bennett and his chairmen —
were embarrassed. Sloan says that, accordingly, some time in the fall
of 1971, Harrison put a hold on additional contributions by the milk
producers. 51 Later, in late 1971 and early 1972, after the September
contributions from TAPE were reported, more adverse publicity arose
and, as a result, Bennett had the committees closed and the funds
transferred to FCRP, and the milk producers began looking for other
less embarrassing ways to meet their commitments to the President’s
campaign. 52 Their efforts in that connection, including meetings in
1972 with Kalmbach, Connally, and others, is discussed in section VI.
3. 1971 AMPI CONVENTION AND THE PRESIDENT
After most of that $232,500 had been contributed by the milk pro-
ducers and just prior to the September 10 contribution of $62,500,
the President attended and addressed AMPI’s annual convention in
Chicago on September 3, 1971 — fulfilling one of AMPI’s three ob-
jectives described to Kalmbach 2 years earlier. 53 After Nelson and
Parr personally escorted the President to the podium, 54 the President
spoke for 35 minutes 55 to a crowd of approximately 40,000 during
which he warmly congratulated the dairymen :
You have pioneered in developing a total marketing con-
cept which, I think, many other producers would do well to
consider. And all of this you have done on your own, neither
whimpering helplessly about uncontrollable economic forces
nor waiting passively for Government to bail you out. 56
Almost simultaneously with the President’s address, two other
events were taking place — the White House plumbers were breaking
into the offices of Daniel Ellsberg’s psychiatrist in California, and
the milk producers were delivering to" Harrison at the convention
another $5,000 contribution for the President’s campaign which was
used to pay for the break-in operation, as discussed in the following
section.
4. FUNDING THE ELLSBERG BREAK-IN
A $5,000 contribution from the milk producers to the President’s
campaign was solicited and then diverted by Colson to pay for the
Ellsberg break-in. Those involved in the transaction included Nelson,
Chotiner, and Harrison representing the milk producers, George
Webster, a Washington attorney, and Joseph Baroody, a Washington
public relations consultant. Each denies that he knew of the disposi-
tion of that contribution.
a. -J oseph Baroody and AMPI
Joseph Baroody is a partner in a Washington public relations firm
of Wagner & Baroody, which was retained (at Colson’s insistence) by
AMPI and paid $40,000 apparently without providing any serv-
ices whatsoever— at least not to AMPI.
61 Sloan Interview, October 31, 1973.
52 Bennett interview, supra . See .Jacobsen, 15 Hearings 6437-38.
m See Section IT, supra.
54 Van Dyk, 16 Hearings 6989, 7026.
35 Dairymen Digest, p. 9, October, 1975.
63 Public Papers of the President: Richard Nixon (1971), p. 931.
695
Testifying on December 19, 1973, before the Select Committee, Nel-
son says that in late 1970 or in January, 1971 (when Nelson was
meeting with Colson from time to time and discussing the $2 million
pledge as well as AMPI’s requests) , Colson recommended to Harrison
that AMPI hire Wagner & Baroody for public relations work for
$25,000 ; since Nelson did not see any need for their services, he
refused. 57 Colson then repeated his request to Harrison and urged that
AMPI hire the firm. 58 Nelson testified that, this time, he complied :
Mr. Nelson. And we decided that we had better do it.
Mr. Weitz. Why ?
Mr. Nelson. Well, because it had been suggested by Mr.
Colson was the only reason.
Mr. Weitz. Did you feel that if you did not hire the firm
at Mr. Colson’s repeated request that you somehow might
lose some favor or it might impede vour efforts with Mr.
Colson?
Mr. Nelson. Yes. 59
AMPI’s records show that Wagner & Baroody was paid $2,500 a
month from October 1970 through January 1972 (until the change
in AMPI management) for a total of $40,000. Nevertheless, Nelson
says that the Baroody firm not only failed to perform any services
for AMPI but even failed to meet with anyone from AMPI. 60 Nelson
called the $40,000 — paid from corporate funds — a “contribution”. 61
Although Baroody says that his firm “was expected to look for ways
in which we could advance the interests of AMPI,” he cites no work
performed for the co-op for the fees. 62
A question arises as to why Colson might have insisted on AMPI
hiring the Baroody firm, and what use was made of the $40,000. As
discussed above, Patrick J. Hillings, counsel to Harrison’s firm,
wrote to the President on December 16, 1970 — at about the same time
that Baroody’s firm was put on retainer to AMPI — that AMPI
was “funding a special project.” No one interviewed by the com-
mittee — including Hillings and Harrison who composed the letter —
could explain what was that “special project.” 63
However, Baroody has acknowledged that he received moneys from
Colson on several occasions for certain projects. In 1971, Baroody
received more than $3,000 to use in preparing television responses to
a Common Cause statement on ending the Vietnam war, and in the
spring of 1972, he received $22,000 from Colson to run newspaper
advertisements in support of the President’s Southeast Asia policies. 64
From August 1971 until the spring of 1972, Baroody worked with
the private committee organized at Colson’s direction, Citizens for
57 Nelson, 15 Hearings 6651-52. AMPI records reflect that no bills were submitted from
Wasrner & Baroody until December 31. 1970. at which time bills for the last 3 months
of 1970 and for January. 1971 were submitted. It is possible, therefore, that the arrange-
ment was not made final until December with the proviso that Wagner & Baroody would
obtain $7,500 as a result of back billing.
58 Nelson, 15 Hearings 6652.
50 Nelson. 15 Hearings 6652— 53.
60 Nelson, 15 Hearings 6653.
61 Nelson, 15 Hearings 6653—54.
62 Baroody Affidavit. 17 Hearings 7817.
63 8ee Harrison Exhibit 2, 14 Hearings 6285-86, and Section III.B.S.b., supra.
84 Baroody affidavit, supra. Baroody says that he returned the $22,000 when the project
was suspended and, later, he was given $6,800 to pay for a similar but scaled down project.
696
a New Prosperity, in support of the President’s economic policies
including phase 1, and phase 2. 65
One White House project that was funded by AMPI was the covert
entry by the White House Plumbers into the office of Daniel Ellsberg's
psychiatrist, Dr. Lewis Fielding, on the night of September 3, 1971.
Headed by Egil Krogh the White House Plumbers had been orga-
nized in July 1971 to investigate the source of the leaks of sensitive
information highlighted by the newspaper publication of the so-called
Pentagon Papers on the Vietnam war. 66 The activities of the Plumbers
included an investigation of Daniel Ellsberg, who had been accused of
leaking the papers to the press, and that investigation extended to
matters such as uncovering and publicizing certain aspects of Ells-
berg’s background and private life including his psychiatric records. 67
According to Colson, Ehrlichman called him from the west coast
the week before Labor Day, 1971 and told him that Krogh needed
$5,000 quickly for one of their projects. 68 As recalled by Ehrlichman,
he referred Krogh to Colson for the necessary funds and did not per-
sonally telephone Colson. 69 In any event, Colson has testified that he
called Baroody, with whom he had already begun to work on the Citi-
zens for a New Prosperity project, and asked him for a loan of $5,000
within the next day or two. 70
Baroody says he immediately obtained the $5,000 — $1,500 to $2,000
from personal funds and the balance from funds Colson had given to
him to use in preparing television responses to a Common Cause
statement on ending the war in Southeast Asia. The next day he took
the money in an unmarked envelope to Colson who directed him to
deliver it to another individual whom Baroody didn’t knoAv at the time
but whom he now believes was Krogh. 71 The money was apparently
given to Hunt and Liddy and went directly to pay for the expenses of
the break-in.
While Colson Avas arranging for the delivery of the money to
Krogh, he was also taking steps for its repayment to Baroody by con-
tacting Chotiner and George Webster.
h. Repayment for the Break-in
George Webster Avas the director of the national 1 aAvvers for Nixon
organization in the 1968 campaign. 72 In 1971, he organized committees
at the request of Colson ostensibly to receive contributions to the
President’s 1972 campaign. In fact, one of the committees, People
United for Good Government, Avas used to furnish a $5,000 milk pro-
ducer contribution to pay for the Ellsberg break-in.
Webster’s involvement with Colson began in early 1971 when Col-
son, Avhom he met in 1970, asked him to form 17 political committees
in the District of Columbia to receive a $51,000 contribution ($3,000
85 Colson testified before the State grand jury investigating the Ellsberg break-in that
he often provided money from outside interest groups at the request of Haldeman or
Ehrlichman for special White House projects. People v. Ehrlichman, Cal. Sup, Ct. Cr. No.
A 300 388, Grand Jury Transcript at 654-55 (testimony of Charles Colson) (hereafter
Ellsberg break-in Grand Jury Proceedings.) .
88 Ellsberg Break-In Grand Jury Proceedings, 629-38.
67 See Id. at 647-49. On June 3, 1974, Colson pleaded guilty to one count of obstructing
justice in the trial of Dr. Daniel Ellsberg.
68 Id. at 652—53.
09 Ehrlichman, i.6 Hearings 7394-95.
70 Ellsberg break-in grand jury proceedings, at 652, 655-56.
71 Baroody Affidavit, supra.
72 Webster interview, December 10, 1973.
697
per committee). 73 Webster secured four friends to serve as committee
officers and organized the committees. 74 The money was subsequently
transferred to another District of Columbia political committee fund, 75
part of which went to the President’s reelection campaign.
Webster again accommodated Colson later in 1971. Webster says
that in early September 1971, Colson called, asked if one of the 17
committees was still in existence to receive another contribution, and
explained that he wanted to deposit some money in one of them. 76
Several of the 17 committee accounts were still open, and Webster gave
Colson the name of one of the 4 committees of which he was chair-
man — People United for Good Government.
Colson, who had obtained $5,000 from Baroody for Krogh at
Ehrlichman’s request, then arranged with the milk producers to repay
the $5,000 to Baroody through Webster’s committee. Chotiner says
that Colson contacted him and asked if his client, AMPI, would con-
tribute another $5,000 — over and above the contributions to the 100
committees — for some “project.” Chotiner says he relayed the request
to Harrison who then called Colson or Henry Cashen at the White
House to work out the details. 77
Harrison says, “I was pleased to get the name of a committee — I
thought Mr. Colson was doing us a favor — which had a prominent
lawyer as a treasurer” 78 and he passed the request on to AMPI. A
$5,000 TAPE check was issued on September 2. Although he does not
remember, Harrison says he may have received the check at the
AMPI Convention 79 during the next day or so — when the President
spoke — and he then delivered the check to Webster on or about
September 7. 80
The last step was to transfer the money to Baroody. Webster says
that Colson called him about 10 days later and told him that he wanted
the $5,000 in cash. Webster cashed a check on the committee account
for $5,000 on September 21 and put it in his safe. 81 According to
Baroody, he received a call from someone in Colson’s office some time
in September and was told to go to George Webster’s office to get the
cash, which he did. 82 Webster, who was out of town at the time, had
told his secretary to follow Colson’s instructions. Colson or someone in
73 Webster interview, supra.
74 Webster, who served as chairman of 4 of the 17 committees, asserted that, although
he received all 17 checks from Colson, he did not organize the remaining committees.
Webster interview, supra. However, the four other chairmen told the committee staff that
Webster had prepared the necessary documents and that they did nothing more than sign
the documents.
75 Webster says that sometime after the checks were deposited, Colson called him and
asked that checks be drawn and made payable to the Republican National Committee, and
Webster says that, with respect to his four committees, he did so. However, according to the
other chairmen, Webster arranged for the transfer at the time the committees were formed.
These checks were not, however, received by the RNC but were instead deposited in the
account of a District of Columbia political committee, the D.C. Republican Support Com*
mittee.
Webster assured the Committee staff that the checks drawn on the committee accounts
were delivered promptly because “as a lawyer you don’t leave things sitting around too
long.” (Webster interview", p. 20). Someone did, because the checks were not negotiated for
6 months. According to the bank records of the committees, the 17 checks were deposited
in their respective committee accounts on Feb. 9, 1971, and the 17 checks to the RNC
drawn on these accounts were dated Feb. 22, 1971, but were not negotiated until Aug. 20,
1971, when they were deposited in the account of the D.C. Republican Support Committee.
Before that committee was closed in February, 1972, its funds were distributed to a number
of political committees, including the Illinois FCRP.
76 Webster interview, supra.
77 See Weitz affidavit, exhibit B, 17 Hearings, 8010.
78 Harrison, 14 Hearings 6263.
73 Ibid.
80 Webster interview 7 , supra.
81 Ibid.
82 Baroody Affidavit, supra.
698
his office had told her to give the money to Baroody, and when he
came, she did so. 83
Although Webster says that he assumed that the $5,000 was “just
like the other [$51,000] that was going to the Republican National
Committee,” he conceded that he did not know “where the funds
went.” He says that, in any event, he considered himself the trustee
for Colson and felt his only obligation was to follow Colson’s
instructions. 84
Later, Webster told Colson he didn’t want to know the facts of the
disposition of the money. In June or July of 1973, after Federal and
State grand jury investigations of the break-in had begun, Colson and
his law partner, David Shapiro, met with Webster to discuss the
transaction. However, according to Webster, when Colson started to
explain that the money went to repay Baroody for the money he had
extended to Krogh, Webster cut him off by saying :
Chuck, you know you never told me. I assumed this money
was going to the Republican National Committee at the time ;
and I have no knowledge about that. And whatever you did
with the money, was your own business. 85
c. Haldeman and Ehrlichman Approved of the Milk Producer Re-
payment
There is evidence that the payback of the expenses of the Ellsberg
break-in with milk producer contributions was carried out by Colson
with the knowledge and approval of Haldeman and Ehrlichman. On
September 11, 1971 — 4 days after Harrison had delivered the $5,000
TAPE check to Webster — Strachan reported in a memorandum en-
titled “Milk Money” to Haldeman that, according to Lee Nunn and
Hugh Sloan, “Colson has established a separate agreement with the
milk people in order to have cash available.” 86
The memo went on to say that “ [i] f the alleged Colson agreement
has your approval the matter will be dropped.” On the bottom of the
memo were instructions from Haldeman to Strachan to check with
Colson. 87 Strachan testified that he raised the matter with Haldeman
in the momorandum because Haldeman had been concerned about
secret solicitation of contributors during the 1972 campaign by indi-
viduals in the White House without his knowledge and that Halde-
man had previously sent a memorandum to Colson, Magruder, Choti-
ner and others instructing them to stop the practice. 88
Strachan did check with Colson and, in a followup memorandum to
Haldeman on September 16, also entitled “Milk money,” Strachan
reported :
63 Webster interview, supra.
84 Webster interview, supra. Webster says he mistakenly thought that the Baroody
who received the “contribution” was William Baroody, a brother of Joseph Baroody, who
at that tme was an official of the Department of Defense.
86 Webster interview, supra.
80 Strachan exhibit 4, 16 Hearings 7483.
87 Ibid. As described above, the White House has denied to the Committee many documents
relevant to the milk fund investigation. The Sept. 11, 1971, memo which referred to
a $90,000 a month commitment and $232,500 in actual contributions from the milk pro-
ducers. was not even included by the White House in the list of materials relevant to milk
producer contributions ; it was. however, appended to a motion by defendants in Nader v.
Bute on Jan. 18. 1974, opposing production by the President to plaintiffs of assertedly
privileged documents.
88 Strachan, 16 Hearings 7462.
699
You asked me to check Colson regarding an independent
agreement with the milk people for Colson to get cash. Col-
son confirmed that he had made a separate arrangement to
obtain five thousand. This money was committed by Ehrlieh-
man but never delivered in connection with a “project we
(Colson and Ehrlichman) worked on together.” 89
Although Ehrlichman told the Select Committee staff that he did
not commit the money for Krogh, 90 Haldeman testified that another
of his aides, Lawrence Higby, checked independently with Ehrlich-
man who confirmed the accuracy of Strachan’s September 16 report. 91
Strachan testified that Haldeman was apparently satisfied with
Strachan’s report and did not ask him for any further information
or direct him to cancel the “separate arrangement.” 92
VI. MILK PRODUCER CONTRIBUTION ACTIVITY IN
1972 PRIOR TO APRIL 7— THE JUSTICE DEPARTMENT
ANTITRUST SUIT AGAINST AMPI
By the end of 1971, the milk producers had received much of the
favorable treatment from the President that they had sought — low
import quotas, higher price supports, meetings with the President, and
the Presidential address to their convention — but they had also been
the subject of a great deal of unfavorable publicity in connection with
their attempts to honor their commitment for contributions. In order
to make additional contributions in 1972 without that attendant pub-
licity, they recontacted Kalmbach and tried to develop a different
procedure for those contributions.
At about the same time, a Justice Department antitrust investiga-
tion of AMPI culminated in the filing of a civil suit. This action
impacted upon the contribution activity of the milk producers — at first
chilling their interest in making additional contributions, and, accord-
ing to Kalmbach’s testimony and other evidence, later, just prior to
April 7, 1972, resulting in a last-ditch effort by AMPI to seek a
cessation of the suit as a quid pro quo for more secret contributions to
the President’s campaign.
A. The Justice Department Antitrust Suit Against AMPI
In the late 1960’s and early 1970’s, the Antitrust Division of the
Justice Department received a number of complaints from independent
dairy farmers against MPI and then later AMPI, alleging that
the cooperative had engaged in predatory practices to squeeze smaller
cooperatives out of their markets in order to monopolize those mar-
kets. 93 A staff investigation was initiated, which led to a recommenda-
89 Strachan Exhibit 5, 16 Hearings 7484. This is consistent with what Strachan identified
as his handwritten notes written on the Sept. 11 memo and reflecting his followup
activity : “5G separately on E committed siphoned.”
90 Ehrlichman, 16 Hearings 7395.
91 Haldeman, 16 Hearings 7175. This is corroborated by a handwritten note following
Strachan’s report in the Sept. 16 memo : “Right L.”
02 Strachan, 16 Hearings 7462-63.
03 Interview of John E. Sarbaugh, Chief of the Chicago office of the Antitrust Division.
Department of Justice, Dec. 20, 1973. The practices alleged included “loading the
pool (shipping supplies of milk into a particular area for the purpose of depressing
prices paid to competitors of the shipper) and “full line forcing” (forcing milk haulers
to stop hauling milk for its competitors by threatening to discontinue AMPI’s use of their
services).
700
tion for a grand jury investigation leading to possible criminal
prosecution. Attorney General Mitchell rejected that recommendation
and limited the Department’s action to a civil suit, which was filed on
February 1, 1972.
1. DEPARTMENT STAFF INVESTIGATION AND RECOMMENDATIONS
On February 23, 1971, the Justice Department authorized a pre-
liminary investigation of AMPFs activities in the Dallas, Tex. area,
which soon expanded to a number of States in the central United
States. Much of the original investigation was conducted by Rebecca
Schneiderman, a trial attorney in the Chicago regional office of the
Antitrust Division who, after a several month investigation, 94 con-
cluded that AMPFs activities were sufficiently anticompetitive to neces-
sitate a grand jury investigation of the cooperative with a view to pos-
sible criminal prosecution. John Sarbaugh, Chief of the Chicago of-
fice, concurred with Schneiderman, and on August 11, 1971, requested
authority to conduct a grand jury investigation of AMPI. 95 The re-
quest was forwarded to the Antitrust Division in Washington, D.C.,
where it was reviewed and approved by a succession of officials, all of
whom concurred in the recommendation of the Chicago office. These
officials included Baddia J. Rashid, Director of Operations for the
Antitrust Division, Gerald Connell, Chief of the Department’s Gen-
eral Litigation Section, and Robert Hummel, Deputy Director of
Operations.
After the approval, the grand jury’s request was sent to the office
of the Assistant Attorney General for Antitrust, Richard McLaren, 96
where it was reviewed by McLaren and his assistant, Walker B.
Comegys. McLaren consulted with Assistant Secretary of Agriculture,
Richard Lyng, to determine whether the Department of Agriculture
objected to a grand jury investigation of AMPI, and Lyng indicated
that the Department had no objection. 97 Both Comegys and McLaren
then approved the request, and on September 9, 1971 — 1 week after
the President had addressed the AMPI convention — McLaren for-
warded a memorandum to Attorney General Mitchell requesting au-
thority for a grand jury investigation. 98
McLaren says he normally received a response from Mitchell on
such matters within a week or two. When, by October 29, 1971 (7
weeks later). McLaren received no response but had continued to
receive complaints from milk producers about AMPI’s conduct, he
sent Attorney General Mitchell a second memorandum requesting
M In the course of her Investigation. Schneiderman conferred not only with complaining
dairy farmers, hut with Tom McDade. a Texas attorney who was representing Marketing
Assistance Plan. Inc. (MAPI in a private antitrust suit against AMPI. In addition, she
met with attorneys in the State of Illinois attorney general’s office and obtained infor-
mation from them relating to the activity of AMPI and other dairy coopera tires in that
State.
93 Wilson affidavit, exhibit 2. 17 Hearings 8016-18.
06 Mr. McLaren is now a T7.S. district nudge in the TT.S. district court for the Northern
District of Illinois, having assumed office on Feb. 2. 1972.
97 flee McLaren affidavit, 17 Hearings 7981.
"See Wilson affidavit, exhibit 7. 17 Hearings 8025. Exhibit 7 is the transmittal memo-
randum only, and excludes, at the request of the Department of Justice, the underlying
memo which discusses the internal deliberation on the merits of the case.
701
authority for a grand jury and emphasizing those allegations that
AMPI was continuing its predatory practices. 90
2. ATTORNEY GENERAL MITCHELL’S ACTIONS
On November 30, 1971, in a departure, according to McLaren, from
Department practice, Attorney General Mitchell rejected the request
for a grand jury investigation of AMPI. In a one-line memorandum,
he instructed McLaren, “per our conversation I request that you go the
civil route,” thereby limiting the case to a civil suit only. 1 Although
Mitchell does not remember the conversation or even turning down a
request for a criminal investigation, he acknowledged that the memo-
randum must have reflected his decision, 2 and Judge McLaren has
stated that he did discuss the AMPI case with the Attorney General on
November 30. 3 Apparently, in the course of their discussion, the At-
torney General expressed the opinion that the Justice Department
would have difficulty obtaining a criminal conviction in light of
AMPI’s defense that a Federal statute applicable to farmer coopera-
tives, the Capper- Volstead Act, exempted its activities from the
antitrust laws and that AMPI could claim they relied on advice of
counsel. However, from the very start of the investigation, the Anti-
trust Division was cognizant of the provisions of the act and the
argument that that statute exempted AMPI from the otherwise
applicable provisions of the antitrust laws ; based upon a long-standing
Supreme Court precedent, everyone concerned had rejected that
argument — except Attorney General Mitchell. 4
In response to a recent staff request, McLaren stated that Mitchell’s
action was unusual, and that he could not recall any other specific
instance in which Attorney General Mitchell turned down a recom-
mendation from the Antitrust Division. McLaren further pointed
out that, to his knowledge, Mitchell had no particular expertise in
99 See Wilson affidavit, exhibit 8, 17 Hearings 8026 ; letter from Richard W. McLaren
to David M. Dorsen, dated May 10, 1974, 17 Hearings 8051-54. According to John Sar-
baugh, while the grand jury request was pending in Washington, the Chicago office
received further complaints against AMPI. Sarbaugh recalls that the Chicago office encour-
aged the complainants to make their plea for relief to the Washington office of the Anti-
trust Division. Sarbaugh interview, supra.
1 See Wilson affidavit. Exhibit 10, 17 Hearings 8028.
2 Mitchell interview, January 14, 1974.
3 In his affidavit filed in the antitrust suit as part of a response to defendant’s dis-
covery motion, Judge McLaren states :
To the best of my recollection and belief, on or about Nov. 30, 1971, Attorney
General Mitchell discussed with me the requests I had made for a grand jury investi-
gation and, after reviewing the legal and tactical questions involved, in the face of a
defense that the defendants’ activities were exempt from the antitrust laws, Attorney
General Mitchell suggested that the Antitrust Division proceed along civil rather than
criminal lines. McLaren affidavit. 17 Hearings 7982.
4 In his memorandum to his superiors in the Department, including McLaren, requesting
the grand jury investigation. Sarbaugh included a discussion of a possible defense by AMPI
that its activities were exempted from the antitrust laws, based upon the Department of
Agriculture’s jurisdiction over milk pricing by cooperatives. See Capper-Volstead Act, § 2,
7 U.S.C. § 292. Sarbaugh acknowledged that the Secretary of Agriculture has wide powers
under the Act, including the power (1) to issue a cease-and-desist order against certain
monopoly practices, (2) to regulate the minimum price which is paid by milk processors
and manufacturers, and (3) to establish rules governing local pricing orders. Apparently,
anticipating an AMPI defense that the Capper-Volstead Act exempted its activities from
the strictures of sections 1 and 2 of the Sherman Act. Sarbaugh expressed his opinion
that the issue had been resolved clearly and unequivocally 30 years before by the
Supreme Court in United States v. Borden Company, 308 U.S. 188 (1939), which held that
milk marketing orders and related regulations of the Department of Agriculture did not
exempt predatory non-price-fixing activities of dairy cooperatives from the Sherman Act —
the alleged AMPI activity under investigation.
702
this area and had no information that was not available to the
Antitrust Division. 5
Of the various alternatives available to the Justice Department
under the circumstances in the case — a criminal prosecution, simul-
taneous criminal and civil suits, or a civil suit, only 6 — the Attorney
General’s directive to McLaren limited the Department to the mini-
mum action which the Government will pursue when the evidence indi-
cates an antitrust violation. In interviews with Select Committee staff,
some of the staff attorneys in the Chicago office who had concurred in
the appropriateness and need for a grand jury investigation stated
that they were disappointed and surprised at the Attorney General’s
decision.
Aside from other considerations, the decision to pursue the AMPI
case as a civil suit had an impact on the subsequent investigation in
the case. Normally, investigation of a civil suit is conducted by Civil
Investigative Demand (CID) — a cumbersome procedure which moves
very slowly if the person or organization under investigation resists
the demand for information and documents. A grand jury, on the other
hand, has more extensive compulsory procedures, including the ability
to subpena testimony and documents relevant to the case from the
party under investigation or from third parties. Recognizing the limi-
tations of the CID and the apparent urgency of the complainants —
and perhaps in expectation of resistance by AMPI — McLaren di-
rected the staff to obtain by interviews any further evidence needed
to prepare a civil complaint, in addition to that accumulated during
the preceding 9-month investigation.
These instructions were carried out and a civil complaint against
AMPI was drafted which alleged generally that the co-op had vio-
lated sections 1 and 2 of the Sherman Act. Among the specific allega-
tions of the complaint, it was asserted that AMPI had (1) depressed
the price which its competitors could receive for their milk by “load-
ing the pool” while protecting AMPI members from economic loss;
(2) agreed that processors who purchase milk from AMPI would not
purchase milk from competitors of AMPI or would pay a substantially
higher price for their milk than those who did not deal with AMPI’s
competitors; and (3) agreed that some processors would not sell or
deliver milk acquired from AMPI to other processors except as di-
rected by AMPI. The complaint also alleged that AMPI had acquired
competing processors and haulers and, as part of its base-excess plan,
forced its producer-members to sign membership agreements forbid-
ding the producers from competing with AMPI for a period of 5 years
after terminating membership in the co-op.
In late December 1971, the Chicago office sent a copy of the proposed
complaint and a memorandum summarizing the evidence to support
the suit to Washington. On January 18, 1972, following review of the
case in the Antitrust Division, including the making of minor changes
in the complaint, McLaren met again with Assistant Secretary Lyng
and showed him a copy of the proposed complaint against AMPI.
Lyng stated that he had no objection to the complaint and that he
B McLaren letter, supra.
6 Evidence sufficient to support a criminal case will, by definition, support a civil case.
Ordinarily, if the Government determines that injunctive or structural relief is necessary
to ston the activity which constitutes the criminal violation, it will simultaneously seek
an indictment and file a civil complaint against the defendant. See McLaren letter, supra ,
Of course, a civil suit alone may be justified if the grand jury investigation does not
result in indictments.
703
would advise the Secretary of Agriculture of McLaren’s proposed ac-
tion. McLaren then forwarded the complaint and fact memorandum
to the Attorney General with an accompanying note in which he
stressed AMPI’s “grossly predatory practices” and “strongly” urged
the Attorney General to approve the suit.
On January 22, 1972, Attorney General Mitchell approved the
complaint and sent it to McLaren with a note which said : “I suggest
you get these people in before you file.” 3 * * * 7 McLaren says that Mitchell
specifically directed him at that time to give AMPI the opportunity
to enter into “prefiling negotiations.” 8
The committee received conflicting evidence on the regularity of
undertaking prefiling negotiations. Prefiling negotiations are under-
taken in an attempt to have the parties agree to a consent decree which
is then filed with the complaint in settlement of the case. While
according to McLaren, prefiling negotiations are very common and
it is “not unusual” for the Antitrust Division “to inquire of the
(prospective) defendants whether they wished to prefile,” in all
cases, 9 other Antitrust Division officials told the committee staff that
they viewed prefiling negotiations to be appropriate only when the
defendants have agreed in principle to the terms of the relief sought
by the Government in its complaint. 10 Although it apparently was
not unusual for Mitchell to send notes to McLaren on a variety of
subjects and that at the time McLaren “did not consider his written
communication . . . unusual or significant,” 11 Mitchell’s written di-
rective to McLaren must be viewed in the light of Mitchell’s partici-
pation at that time, described in VI.B., below, to raise $1 million ox-
more in campaign contributions from AMPI.
Nonetheless, the Division earned out Mitchell’s ordei’ — until it
became clear that, after all, the AMPI case was an inappropriate one
for prefiling negotiations.
3. PREFILING NEGOTIATIONS AND THE FILING OF THE SUIT
On Monday, January 24, 1972, Sarbaugh contacted Stuart Bussell,
one of the counsel for AMPI, and informed him that the Chicago
office had been authorized to file an antitrust complaint against AMPI
and to ask AMPI if it wanted to engage in prefiling negotiations
which might lead to a consent decree. Sarbaugh gave Bussell until
Thursday, January 27, to respond and, in keeping with Division prac-
tice, he stated that the Government would permit the negotiations to
continue for a period of time not to exceed 60 days; otherwise, the
complaint would be filed F riday, January 28, 1972.
In response, Bussell told Sarbaugh that AMPI would probably
want to negotiate, and that he would contact AMPI’s Chicago coun-
7 Wilson affidavit, Exhibit 13, 17 Hearings 8031.
8 See McLaren affidavit, supra.
s McLaren letter, supra.
10 Prefiling negotiations in a civil antitrust suit in which the United States is the plaintiff
are distinguishable from ordinary negotiations in -which both parties are likely to com-
promise in order to reach settlement. Prefiling negotiations are considered by the Depart-
ment to be inappropriate when the defendant disputes the major allegations of the
complaint. As a general rule, in 1972, the Antitrust Division allowed a 60-day period to
negotiate a consent decree, but this period was not a substantive right of the defendant.
If, at any time, the Government felt that the defendant was not negotiating in good faith
or did not agree in principle to the relief sought, it would terminate the prefiling nego-
tiations and file the complaint. Staff interview with Robert B. Hummel. December 4, 1973.
11 See McLaren letter, supra. In a staff interview, Mitchell said that it was customary to
have the Antitrust Division people speak to prospective defendants in a civil suit. Mitchell
interview, supra.
35-687 0 - 74 - 46
704
sel, Martin Burns, who would most likely contact the Chicago office
to see the complaint. On Tuesday, January 25, 1972, Burns read the
complaint and, on January 26, he called to say that AMPI wanted to
engage in prefiling negotiations. 12
On January 27, 1972, at a meeting with the staff of the Chicago
office, Burns and his partner Erwin Heininger confirmed AMPI’s
intention to engage in prefiling negotiations. However, it soon became
clear that AMPI was not prepared to agree in principle to the relief
requested by the Government — the threshold requirement for the nego-
tiations to continue. For example, according to Sarbaugh, Heininger
questioned the propriety of the civil antitrust complaint, and stated
his belief that a number of AMPI’s alleged activities were exempt
under the Capper- Volstead Act.
There also seemed to be another component to AMPI’s tactics in
the negotiations. At that point in late January, McLaren was sched-
uled to leave his post for a Federal judgeship in less than a week. The
60-day prefiling negotiations, if completed, would extend well beyond
the time of his departure. Sarbaugh says that, at the January 27 meet-
ing, Heininger mentioned that with McLaren leaving the Depart-
ment, the complaint would probably have to be signed by his successor
before it could be filed. Heininger also referred to the fact that dairy-
men were big political contributors.
Sarbaugh, who had known Heininger professionally for a number
of years, was shocked and concerned by the reference to political con-
tributions. He thought that this was the most “blunt and tactless”
comment he had ever heard Heininger make. 13 Its meaning was clear,
at least to Sarbaugh and McLaren — by stalling beyond the time of
McLaren’s departure, AMPI might be able to use the pre-filing ne-
gotiation period to “block politically” the filing of the suit. 14 Although
the meeting ended with the understanding that negotiations would
continue, Sarbaugh made it clear to Heininger that the Government
was not committed to prefiling negotiations for the full 60-day period
and that the complaint would be filed if, at any time, the parties
reached an impasse in the negotiations.
Sarbaugh was concerned about Heininger’s attitude toward the ne-
gotiations; he felt that there had been no real agreement by Heininger
that AMPI would accept the relief sought in the complaint. He was
aware that dairy cooperatives had been big contributors and, in light
of Heininger’s comments, he brought the matter to the attention of
Assistant Attorney General McLaren, who instructed him to call
(Heininger and tell him that the Chicago office would give him a pro-
posed consent decree by the close of business on Friday, January 28.
McLaren said that, unless AMPI consented to the basic terms of the
proposed decree by the close of business on Monday, January 31, the
suit would be filed the next day, February 1.
Sarbaugh relayed the message to Heininger, and told him that the
AMPI case was not an appropriate case for pre-filing negotiations
since AMPT had not requested the negotiations in the first place and
that AMPI had not agreed in principle to the relief requested. The
proposed final judgment was submitted to Heininger at 3 :30 on Fri-
12 McLaren affidavit, supra.
13 Sarbaugh interview, supra .
14 McLaren affidavit, supra.
705
day afternoon along with a letter requesting that AMP I make a writ-
ten response before the close of business on Monday, January 31. On
Monday afternoon, Heininger called Sarbaugh and told him that
AMPI could not meet the Suggested deadline of the Antitrust Division
since it could not resolve all of the problems raised by the proposed
judgment before the close of business that day.
The antitrust suit was filed February 1, 1972, McLaren’s last day
in office at the Justice Department. 16
B. White House Involvement Prior to the Filing of the Suit
McLaren’s original recommendation for a grand jury in the AMPI
case went to Mitchell on the very same date — September 10, 1971—
that the milk producers were contributing the last $62,500 of the
$232,500 to the multiple Presidential campaign committees. During
the next 2 months, while Mitchell was considering what action, to
take, White House aides began monitoring the antitrust investigation
and there is evidence that Mitchell conferred with Haldeman about
the milk producer contributions and the antitrust problem before
he turned down McLaren’s recommendation for a grand jury in-
vestigation. There is also evidence that in J anuary 1972, .Mitchell was
taking an active role in further solicitations of the milk producers
at the very time he directed McLaren to enter into pre-filing negotia-
tions with AMPI.
1 . MONITORING OF THE ANTITRUST INVESTIGATION BY WHITE HOUSE
AIDES
Although a resolution of antitrust problems was not on the original
list of milk producer objectives outlined to Kalmbach in 1969, it was a
subject of some discussion between them and the White House in 1970
and 1971. Jack Gleason says he remembers meeting with Nelson and
Parr, in early 1970, and discussing their concern over possible trouble
from the Justice Department, Henry Cashen, one of Colson’s assistants,
told the committee staff that sometime in 1971 or 1972, Marion Harri-
son told him that the dairy people were going to get clobbered by the
Antitrust Division. Cashen says that since Justice Department matters
were the responsibility, in the White House, of John Dean, he may
have passed on the information to Dean and, because of Colson s inter-
est in the milk producers, to Colson, too. 16
On September 24, 1971—3 weeks after the President spoke to the
AMPI convention and 2 weeks after the $62,500 contribution was made
and McLaren’s recommendation went to Mitchell — Colson sent a memo
to Haldeman, “Eyes only,” entitled “Milk Producers” with the follow-
ing information on the antitrust investigation :
There is underway in the Justice Department at the mo-
ment an Antitrust Division investigation of the milk producer
cooperatives. Attached is the 1956 court decision exempting
the milk producers from application of the antitrust laws. If
this goes too far there will be a number of very serious adverse
1S See Wilson affidavit, exhibit 18, 17 Hearings, 8036-47.
Cashen interview, supra.
706
consequences which I would be glad to elaborate on in
detail. 17
Haldeman says that he does not know what “serious adverse con-
sequences” Colson meant and does not remember any White House
concern about the antitrust investigation, despite the continued in-
terest evidenced by the President and his staff over milk producer
support for the President's reelection effort and despite the negative
impact that criminal prosecution of the co-op and its leaders would
be expected to have on that support. Haldeman, apparently, did want
at least some further information on the matter, because on October 6,
Dean sent to Haldeman aide, Gordon Strachan, “the information you
requested” — a report on a possible antitrust exemption for AMPI and
the “current activities within the Department of Justice” concerning
AMPI. 18 At that point, the “current activities” included the recom-
mendation for a grand jury investigation which was awaiting
Mitchell’s approval.
In his September 24 memo to Haldeman, Colson indicated that he
wanted to “stay out of it,” 19 and he suggested that the antitrust in-
vestigation “should be taken up at one of your meetings.” 20
Haldeman apparently discussed the matter with Mitchell at a sub-
sequent “political matters” meeting.
2. HAEDEMAN-MITCHELE MEETING
There is evidence that Mitchell was deeply involved in the Presi-
dent’s campaign long before he resigned as Attorney General, and
that he regularly met with Haldeman, Presidential assistant (and later
deputy campaign director for CRP) Jeb Stuart Magruder and others
to pass on campaign matters. One political matter scheduled for dis-
cussion at such a meeting was the antitrust investigation of the mi]k
producers.
On November 4, 1971—6 days after McLaren’s second memorandum
to Mitchell repeating his recommendation for a grand jury investiga-
tion — a “political matters meeting” was held, attended by Haldeman
and Mitchell and, for a part of the meeting, Magruder and Strachan. 21
In preparation for the meeting, Strachan prepared an agenda of sub-
jects to be discussed and a talking paper briefly detailing each subject;
the agenda was distributed to all four attendees, but the talking paper
was distributed to only Haldeman and Mitchell and not Magruder. 22
Item 15 of the paper indicates that the Department’s antitrust investi-
gation of the milk producers was to be discussed, as well as “milk
money” :
15. As you probably know, the milk producers currently
enjoy an antitrust exemption resulting from a 1956 decision
17 Strachan Exhibit 7, 16 Hearings 7485—98. The attached District Court opinion. United
States v. Maryland Cooperative Milk Producers , Inc., 145 P. Supp. 151 (D.C.D.C. 1956),
did not hold AMPI’s non-pricing predatory practices exempt from the antitrust laws.
See Section V.I.A.2.. supra. Strachan’ s memo was requested and then subpenaed by the
Committee but the President refused to provide it. It was subsequently made public in
connection with the civil suit of Nader v. Butz.
18 Strachan Exhibit 8, 16 Hearings 7499. The Select Committee has obtained a copy of
the cover memo from Dean to Strachan, but the White House has refused to provide the
committee with a cop.v of the underlying report.
19 According to Kalmbach and Strachan. as discussed in Section VI. C., infra , Colson and
Mitchell did not get along well, and Colson usually tried to avoid becoming involved in
matters involving Mitchell and the Justice Department.
20 Strachan Exhibit 7, 16 Hearings 7485.
21 See Mitchell’s logs located in the Committee's files.
22 See Strachan exhibit 9, 16 Hearings 7500-01.
707
by the Federal District for the District of Columbia. A report
here at the White House indicates the Antitrust Division at
J ustice is now investigating that exemption. Another report
indicates that the Washington Post has assigned four report-
ers full-time on the milk money project. Do I understand cor-
rectly that you have directed John Dean to review any reports
that have to be filed on the Hill connected with the receipt of
the milk money ? 23
Neither Haldeman nor Mitchell remembers any discussion at that
meeting of the antitrust matter. 24 Mitchell does not even remember
knowing that the milk producers who were the subject of the investi-
gation were the milk producers who were making campaign contri-
butions. 25 There seems little doubt, however, that the subject was taken
up. Strachan has testified that matters not covered in one meeting
were taken up at the next, 26 and the White House has not disclosed
any agenda or talking paper for a subsequent political matters meet-
ing in which the matter is listed. Although Mitchell denies it, the talk-
ing paper clearly suggests that the Attorney General was informed
of the connection between the milk producers under investigation
and “milk money” and that Haldeman and the Attorney General
discussed the investigation in the context of the campaign and milk
producer contributions.
The day before his meeting with Mitchell, November 3, and again on
November 29 (the day before Mitchell’s rejection of the request for
a grand jury), Haldeman met with Chotiner, who was counsel to the
milk producers. Haldeman does not remember discussing the antitrust
suit with Chotiner at either of these meetings. 27
3. OTHER MITCHELL CONTACTS
Mitchell also met with Kalmbach several times during the Septem-
ber 10-November 30 period while the McLaren recommendation lay
on his desk. Although he does not specifically recall speaking to him,
Mitchell said in a staff interview that the only person other than
Kalmbach with whom he may have discussed the antitrust suit was
Chotiner. 28 On November 18, according to Mitchell’s logs, he had
a series of afternoon meetings or conversations with Kalmbach and
others who were familiar with the milk producers, although there is
no evidence of what was discussed in those contacts : at 2 :10 he met
with Dean and Kalmbach ; at 3 :15, Harry Dent called him, and at 4 :30
Haldeman called him. It appears that Mitchell then met with the
President because, according to John Connaily’s logs, Connally re-
ceived a call at 4:58 p.m. from Mitchell in the President’s office.
Twelve days later, Mitchell rejected McLaren’s request for a grand
jury investigation.
In early 1972, when McLaren went back to Mitchell for his approval
of the civil complaint against AMPL Mitchell was again making
23 Strachan exhibit 9, 16 Hearings 7501. There are at least 16 other items listed in
the talking paper, hut the White House has excised the entire agenda and those para-
graphs of the talking paper from the copy it has made available. The document was re-
quested and then subpenaed by the committee from the President who refused to .provide
it to the committee. The excised document was subsequently made public in the Naaer v.
Butz suit.
24 Haldeman, 16 Hearings 7179 ; Mitchell interview, January 14, 1974.
25 Mitchell interview, supra.
Strachan, 6 Hearings 2454.
27 Haldeman. 16 Hearings 7180.
28 Mitchell interview, supra.
708
campaign decisions concerning AMPI. As discussed in the following
section, Kalmbach met with AMPI officials in J anuary and February
of 1972 to make arrangements for the remaining contribution toward
their campaign commitment. On January 13, 1972, the day before
one such meeting, Kalmbach conferred with Mitchell who is reported
to have been informed, and to have approved, of the continued Kalm-
bach- AMPI contacts to seek ways for the co-ops to fulfill their $2
million commitment.
On January 21 at 2 :30, Mitchell met with Kalmbach on the subject
of campaign contributions. At that meeting Kalmbach reported to him
that he had met with the milk producers who had confirmed that the
“milk money * * * will continue to come in.” 29 The next day, Mitch-
ell approved the civil suit, but directed McLaren to begin prefiling
negotiations.
McLaren has stated that he caused the AMPI suit to be filed on
February 1 before he left the Department because he felt that AMPI
was not engaging in the negotiations in good faith and that he Avanted
to “preclude any possible attempt by AMPI to resist the filing of the
suit by some political means * * *”. 30 In view of the White House in-
A'olvement, Heininger’s reference during the pre-filing negotiations to
political contributions and Mitchell’s previous decision in the case
favorable to the milk producers, there Avas a basis for McLaren’s con-
cern over the progress of the negotiations and the ultimate filing of the
suit. There is also evidence that in the months that folloAved, AMPI
officials offered more substantial contributions to gain a favorable
resolution of the suit.
C. Fundraising Meetings Betaveen AMPI and Kalmbach in
January and February 1972
The Bennett committees Avere closed after the adverse publicity over
the 1971 milk producer contributions, but there Avas still a large
amount to be contributed by the milk producers to honor their com-
mitment to the President’s campaign, and Nelson wanted to honor that
commitment. 31 Instead of Avorking through Harrison and Chotiner,
as he had done the previous year, 32 Jacobsen was asked to contact
Kalmbach and Avork out a different set of arrangements, and as a
result, several meetings were held betAveen AMPI officials and Kalm-
bach in January and February. 33 In the meantime, on January 12,
1972, Nelson Avas replaced as general manager of AMPI by George
Mehren, and 2 Aveeks later, the antitrust suit was filed by the Justice
Department against AMPI.
1. KALMBACII-NELSON- JACOBSEN MEETING ON JANUARY 14
Kalmbach was generally uninvolved in the milk producer contribu-
tions from the summer of 1971 until the end of the year. At that point,
Jacobsen contacted him, explained that lie was a partner of Milton
Semer (who had delivered the $100,000 to Kalmbach 2 years before)
20 Strachan Exhibit 10, 16 Hearings 7502. See Kalmbach, 17 Hearings 7608-09.
30 McLaren letter, supra .
31 See Nelson, 15 Hearings 6662-63, 6665-66.
32 Nelson apparently felt that Harrison had been ineffective in arranging for the 1971
contributions. See Mehren, 16 Hearings 7254 and discussion infra.
33 Jacobsen, 15 Hearings 6437-38.
709
and told him the milk producers wanted to meet with him again. 34
A meeting was then arranged for Kalmbach, Jacobsen and Nelson for
January 14, 1972, in California.
Before the meeting, a major change was made in AMPI’s top man-
agement. On January 12, the AMPI board voted to remove Nelson as
general manager and elected George Mehren. a former Assistant Sec-
retary of Agriculture in the Johnson administration and, from 1968
until 1972, a consultant and then director of programing of AMPI. 35
Nelson was given a 7-year consulting contract renewable annually,
at $100,000 per year, 36 and over the next few weeks Parr and several
other AMPI officials and employees left AMPI.
Within hours after his removal, Nelson went to Mehren to ask
permission to use the AMPI corporate jet for his trip to California
to meet with Kalmbach on the 14th. Nelson says that he told Mehren
of the scheduled meeting and Mehren instructed him to follow through
with it; Jacobsen testified that before the meeting Nelson told him
that Mehren had authorized him to meet with Kalmbach. 37 Mehren
denies being told of the meeting but acknowledges that he gave Nelson
permission to use the jet “to clean up odds and ends.” 38
On January 13, Nelson and Jacobsen flew to California. When they
met with Kalmbach the next morning, 30 they told hiin that they
wanted to continue the contributions in 1972 with as much money as
possible but, hopefully, without the type of publicity of the previous
year. They indicated that since Nelson had been replaced, Mehren
would have to be consulted before any final decisions were made. 40
It is evident that both Ilaldeman and Mitchell were monitoring
these contacts between Kalmbach and the milk producers. As men-
tioned above, Kalmbach had met with Mitchell on the 13th, the day
before the meeting with Jacobsen and Nelson. Kalmbach says that since
J acobsen was a partner of Semer, who had been active in the Muskie
campaign, Kalmbach checked with Mitchell who approved of him
meeting with Jacobsen and the milk producers to arrange for fur-
ther contributions. 41 Kalmbach also reported the results of the Jan-
uary 14 meeting to Straehan who relayed the report to Haldeman
in a “Political Matters” memo on January 18 :
(1) Herb Kalmbach met with Messrs. Jacobsen and Nel-
son on January the 14th concerning the milk money. Kalm-
bach had a “good meeting” ; the money will continue to come
in, but the milk people do not want to continue to deal with
Reeves & Harrison (Chotiner’s firm). Kalmbach would take
over this project as a special assignment. He will ask the
Attorney General on J anuary the 20th. The Attorney Gen-
eral approved of Kalmbach meeting with Jacobsen even
though Milt Seimer [sic] is Jacobsen’s law partner and treas-
84 Kalmbach, 17 Searings 7608.
35 Mehren, 16 Hearings 7230.
33 Nelson, 15 H earings 6506-07.
37 See Nelson. 15 Hearings 6661 ; Deposition of Harold Nelson, p. 13, Nader v. Buts
(March 21, 1974) ; Jacobsen, 15 Hearings 6440.
38 Mehren, 16 Hearings 7250-51.
^Although there is no record of the flight in the AMPI jet log, the Committee has
obtained records of hotel charges for Nelson and the pilots in the Los Angeles area for the
night of the 13th and of airport charges to AMPI for an airplane on the 14th. See Mehren,
16 Hearings 7250.
40 Jacobsen, 15 Hearings 6442-43. See Kalmbach, 17 Hearings 7606.
41 Kalmbach, 17 Hearings 7608.
710
urer of the Muskie campaign. Kalmbach informed Colson of
the meeting but would not tell Colson who asked him to see
Jacobsen. Kalmbach believes someone should give all in-
formation about the milk situation to Colson. I told him Col-
son was no longer involved.
Recommendation. — That you inform Colson of the milk
situation and that Kalmbach be asked not to discuss the milk
situation with Colson in the future. 42
As related by Kalmbach, there was a great antipathy between Col-
son and both Mitchell and Semer; 43 because of Mitchell’s and Jacob-
sen’s involvement, Strachan recommended to Haldeman that Colson
not be informed of all aspects of the continuing solicitations of the
dairymen. Haldeman approved Strachan’s recommendation and wrote
at the top of the memorandum “Good job.” 44
According to Mitchell’s logs, he next met with Kalmbach on J an-
uary 21 when Kalmbach reported the results of the meeting to Mitchell.
As noted above, this briefing took place the day before Mitchell ap-
proved the institution of a civil antitrust suit against AMPI while
directing McLaren to delay the filing and begin prefiling negotia-
tions. 45
2. KALMBACH -AMPI MEETING ON FEBRUARY 3
By the time the next meeting in 1972 between Kalmbach and AMPI
leaders occurred on February 3, three developments had taken place
that would have an impact in subsequent meetings with Kalmbach :
First, the Justice Department antitrust suit against AMPI, described
above, had been filed on February 1. Second, a lawsuit had been filed
by Ralph Nader and several public-interest groups against the Secre-
tary or Agriculture alleging that the 1971 price support increase was
illegal. Third, George Mehren had become involved in AMPI’s polit-
ical affairs.
a. Nader v. Butz
On January 24, 1972, a suit was filed in the Federal District Court
in the District of Columbia by Ralph Nader, Public Citizen, Inc., Fed-
eration of Homemakers and Consumers Association of the District of
Columbia, against Secretary of Agriculture Butz who had replaced
Secretary Hardin in November 1971, and the Commodity Credit Cor-
poration, alleging that the 1971 milk price support increase was not
based on statutory grounds but on political considerations, including
contributions. The complaint further alleged that the increase was
“unlawful and unenforceable,” and sought a declaratory judgment
and an injunction against continuing support at the $4.93 level. 46
There was immediate reaction to the suit in the White House. On
February 1, Dean sent a memorandum to Ehrlichman describing the
suit and its background. Although he thought the suit could be de-
feated, he warned that “the discovery proceedings could prove dis-
astrous.” 47 In particular, he pointed out that dairy industry officials
42 Strachan Exhibit 10, 16 Hearings 7502. This document was requested by the Committee
but the President refused to provide it. An excised portion of the document was made
public in connection with the Nader v. Butz case.
43 Kalmbach, 17 Hearings 7609. Mitchell once called Colson “a walking time bomb.” Ibid.
44 See Strachan Exhibit 10, 16 Hearings 7502.
45 See Section VI. B., supra,
40 IT.S. district court civil action No. 148-72.
47 Strachan Exhibit 13, 16 Hearings 7507.
711
“will certainly be questioned in detail” about “all commitments made
by the President” at the March 23, 1971, meeting and that, in the
course of their depositions, “questioning about their duties with the
committees and the manner in which the committees operate could
prove highly embarrassing in an election year.” 48 That same day,
February 1, Strachan sent a “Political Matters” memo to Haldeman
in which he described Kalmbach’s apparent concern about the Nader
suit : . . . ,
Kalmbach is very concerned about his involvement m the
milk producers situation. . . . Kalmbach will accept the risk
of being subpenaed by the court in connection with the Nader
milk suit. The Attorney General believes Kalmbach should
continue to handle the milk project, but Kalmbach wants
your advice.
Recommendation. — That Kalmbach not be involved in the
milk project because of the risk of disclosure. 49
Haldeman wrote on the memo “I’ll disc. w/AG.” Based on his notes
written on the memo, Strachan says he relayed this comment to Kalm-
bach on the 3d (the day of Kalmbach’s next meeting with the AMPI
people) and included this item in a talking paper He prepared for a
Haldeman-Mitchell meeting on February 9. 50 As discussed below,
White House plans to proceed with the milk producer contributions
and Kalmbach’s involvement were not changed until March — when
the ITT scandal broke and it appeared to Kalmbach that the AMPI
case, too, might involve a quid fro quo.
b. George Mehren and the Question of Previous Commitments of
Contributions
Although George Mehren had assisted Nelson in the dairy efforts to
secure a price-support, increase in March 1971, he claims that when he
succeeded to Nelson’s position in January 1972, he did not know of any
commitments for contributions to the President’s campaign. 51 Mehren
explained that, with the publicity in late 1971 over the price decision
and dairy contributions and with widespread rumors among AMPI
members of commitments, when he assumed office he did ask AMPI’s
former officials what political commitments were outstanding, but
that no one told him any commitments existed, perhaps because they
felt he would not have honored them. For example, Mehren had heard
from AMPI employee Byford Bain that Parr had made a commitment
to the President’s campaign of $2.6 million. Mehren says that in the
48 Ibid. Also on February 1. Dean sent another memo to Ehrlichman notifying him that
the antitrust suit had been filed against AMPI — “the largest of the cooperatives in-
volved in the Nader case and the organizer of TAPE.” Strachan Exhibit 13. 16 Hearings
7509. , x
49 This document, along with a number of other White House documents referring to milk
producer contributions w r ere denied by the President to the Select Committee. Some, but
not all of the documents, including an excised portion of the above-described memo, were
subsequently made public in the Nader v. Butz suit.
In referring to White House communications to him from Colson. Strachan. and perhaps
Dean on dairy money, commitments, the antitrust and Nader suits, and related matters,
Haldeman observed that they “tended to overdramatize a lot of things, and to lay more
import on the language than they really needed.” Haldeman tried to discount the colorful
language,” as he put, it of these White House memos and explained that [ t ] hese were
written as internal office memorandums, not as public documents.” Haldeman, 16 Hearings
7173 7181
58 Bee Strachan exhibit 11, supra; Strachan. 16 Hearings 7468-69. The White House
has omitted any reference to this alleged talking paper from its list of relevant milk
documents.
51 See Mehren, 16 H eatings 7246-47.
712
presence of John Butterbrodt, the AMPI board president, he asked
Parr in early 1972 whether such a commitment existed; according to
Mehren, Parr told him, “that no commitment had been made ; and he
further said that he was not acquainted with Mr. Colson.” 52 Mehren
says he also asked Nelson and Jacobsen who he says denied knowledge
of any commitments but who advised Mehren to make further con-
tributions, by telling him: “We have to live w T ith those people for
another 4 years.” 53
Both Jacobsen and Parr dispute Mehren and say that he never
even asked them about a commitment, although Jacobsen says he
recommended on his own to Mehren that they make a substantial con-
tribution. 54 Moreover, there is evidence that Mehren knew of a com-
mitment and reluctantly had decided to honor it.
Nelson testified that there had been a commitment which in January
1972 he felt had not yet been satisfied, and he says he told this to
Mehren. 55 In fact, Robert O. Isham, the TAPE trustee and AMPI
comptroller whom Mehren was consulting, says that in the first several
months of 1972 Mehren indicated to him that he felt he was going
to have to honor their commitments and contribute to the President’s
campaign. 56 Indeed, Isham says he resigned from TAPE just prior
to April 7, in order to avoid involvement in any such contributions.
There is evidence that after Mehren was informed of the facts some-
time between January 14 and the February 3 meeting with Kalm-
bach, the original $2 million commitment was scaled down to $1
million. In his February 1st memo to Haldeman, Strachan reported
on Kalmbach’s progress in raising funds from the milk people, in-
cluding Kalmbach’s belief that, “Jacobsen and Nelson will deliver
though they have cut the original 2000 commitment back to 1000.” 57
Nelson testified that he reaffirmed at the January 14 meeting the
original $2 million commitment 58 and, as of January 18, Kalmbach
had reported to Strachan no change in that commitment. 59 Although
he could not pinpoint the date, Kalmbach presumably was informed
of the change between January 18 and February 1, during the period
when Nelson and Jacobsen were in touch with Mehren and then
Kalmbach to arrange the next meeting between AMPI and Kalmbach.
This evidence and that of the February 3 meeting and events there-
after indicate that Mehren — a life-long Democrat and an official in
the Johnson administration with no particular sympathy for the Pres-
ident’s reelection effort 60 — felt obligated under the prior commit-
ment and was indeed prepared to meet that obligation, although in
the context of AMPI’s most recent problem — the antitrust suit.
c. February 3 Meeting
On February 3, Mehren, Nelson, and Jacobsen flew to California
and met with Kalmbach and two of his law partners, Frank DeMarco
52 Mehren. 16 Hearings 7233. 7247. 7316.
63 Mehren, 16 Hearings 7249.
54 Jacobsen, 15 Hearings 6442. Deposition of David L. Parr, p. 139, Nader v. Bntz, (De-
cember 12>, 1972.)
Bn Nelson, 15 Hearings 6665-66.
56 Isham Interview, supra.
57 Strachan Exhibit 11, 16 Hearings 7503.
C8 Nelson, 15 Hearings 6662.
59 See Strachan exhibit 10, 16 Hearings 7502.
60 In his testimony before the Select Committee, Mehren stated that, with regard to
the 1972 election, “I would have had no great personal trauma if the Republicans would
have lost in the Middle West . . .”. Mehren, 16 Hearings 7268.
713
(one of the President’s tax attorneys and counsel to the California
FCRP) and Robert Olson (now a California Superior Court judge).
Although DeMarco (who had not previously met the milk producer
representatives) does not remember any discussion of contributions,
the others present agree that the making of substantial contributions
by the dairy co-op was discussed. ei After Kalmbach told Mehren that
it was to be understood that there was no qui pro quo involved, Kalm-
bach told them that he understood they were interested in making a
substantial contribution. 62 According to Mehren, the discussion cen-
tered on a contribution of $750,000, and either Kalmbach or DeMarco
suggested that most of the money — $700,000 — could be contributed
prior to April 7 and the rest later. 63 It was indicated that, as opposed
to the previous year, the pre- April 7 money would go to real com-
mittees with real officers in a number of States hut independent of the
State Republican committees. Mehren says that the purpose of the
procedure as he understood it was to avoid public disclosure of more
milk producer contributions to the President’s campaign. 64
Although Mehren claims he objected to the suggested procedure, 65
there is evidence that as a result of the meeting and further contact
with the AMPI people Kalmbach fully expected substantially all of
the $750,000 to come in prior to April 7 to fulfill the amended $1 mil-
lion commitment. In a February 16 “Political Matters” memo from
Strachan to Haldeman, it was reported that, “Kalmbach is working
with the milk people to increase the 233 currently banked to 1,000 by
April 7.” 66
At the same meeting on February 3 that there was a discussion of
contributions, there was also a discussion of a substantive problem.
According to Jacobsen, and as more fully discussed in section VI. E
below, Mehren complained to Kalmbach about the Justice Department
antitrust suit against AMPI which had been filed 2 clays earlier. 67
This was preliminary to further discussions in March and early April
which, it is alleged, resulted in an effort to link further contributions
to a favorable resolution of the suit. 68
D. Milk Producer Meetings on March 16 With Kalmbach and
Connally
In March 1972, the AMPI officials came to Washington and met
with Kalmbach and then- Secretary Connally. By then, the milk pro-
ducers were expressing their deep concern over the antitrust suit, and
in light of the emerging ITT scandal, the Republicans apparently
61 DeMarco interview. Mar. 4, 1974. In fact Olson says some of the discussion of pre-
April 7 contributions and committees took place with DeMarco present in DeMarco's
office, and that Kalmbach perhaps wanted Olson and DeMarco present as witnesses. Olson
interview, March 4. 1974.
62 Jacobsen, 15 Hearings 6443.
63 See Mehren, 16 Hearings 7259; Nelson, 15 Hearings 6664. Jacobsen says the pre-April
7 contribution was to be made in several installments such as one-third, one-third, and
one-fourth of the total $750,000 contribution. Jacobsen, 15 Hearings 6444.
u Mehren, 16 Hearings 7259—60.
cr> See Mehren, 16 Hearings 7260. John Butterbrodt, AMPI's President, testified that
Mehren subsequently told him that Kalmbach suggested the contributions be made to
state committees and that the ultimate source — the President’s campaign — *would not
be disclosed and would remain secret. He says that he and Mehren rejected that alter-
native. Butterbrodt, 17 Hearings 7644.
66 Strachan Exhibit 12, 16 Hearings 7504. Kalmbach says lie was working out the de-
tails of the transaction with Jacobsen after the February 3 meeting. See Kalmbach, 17
Hearings 7612—13.
67 Jacobsen, 15 Hearings 6447— 48.
68 See Section VI. E., infra.
714
were developing a new strategy to avoid further embarrassment from
milk producer contributions by postponing them until just prior to
the election.
1. MEETING WITH KALMBACH
By mid-March, Mehren was “beginning to get nervous” about a
commitment because of the “remarkable temporal association of con-
tributions” and the price support effort in 1971. 69 As noted above,
Isham understood from Mehren that TAPE would contribute and
this is corroborated by Nelson who says that Mehren in fact had
decided after February 3 but before the next meeting with Kalmbach
to contribute more money to the President’s campaign. 70
But by that, time, damaging information had been publicized link-
ing the settlement of a Government antitrust suit against ITT and a
large contribution by ITT through its subsidiaries for the Republican
National Convention, following high-level meetings between Mitchell
and ITT officials. 71 Kalmbach says that he anticipated an effort by
AMPI to seek a quid pro quo on the antitrust suit and that he decided
to tell the AMPI officials that he would not solicit any more contribu-
tions from them and that any pledge for contributions would
be abrogated. 72
On March 16, Mehren, Nelson, and Jacobsen met with Kalmbach
in his room in the Madison Hotel. 73 The meeting was brief. Kalmbach
told them of his decision, and Mehren replied that it should be clearly
understood that he (Mehren) was not breaching any commitments. 74
It is not clear whether, as a result of the meeting, all further solicita-
tions for the President’s campaign were terminated or just whether
Kalmbach personally was withdrawing and that solicitations were
being suspended only for a time. Although Mehren says that it was
his understanding that no further solicitations would be made by any-
one connected with the campaign effort, 75 Kalmbach’s message was,
according to Mehren ’s own recollection, more limited ; Kalmbach told
him that, “/ will not proceed any further with discussions or nego-
tiations on political contributions,” 76 and that he “personally would
make no more representation to AMPI.” 77 Nelson says that Kalmbach
told them he was not going to seek additional contributions “presently”
and that Nelson understood that there would be further solicitations
after April 7. 78
69 Mehren, 16 Hearings 7273.
70 Nelson, 15 Hearings 6667.
71 An internal ITT memo discussing this matter was first published on February 29,
1972, by Jack Anderson. See Kalmbach exhibit 2, 17 Hearings 7624.
72 Kalmbach, 17 Hearings 7615.
73 The committee has fixed the date of the meeting based upon evidence it has uncovered
in its investigation. Mehren and Jacobsen testified that they were not sure of the date
of the meeting although they thought it probably occurred sometime in March or April,
1972. See Mehren, 16 Hearings 7271-72. 7278; Jacobsen, 15 Hearings 6450. Although
Mehren said he thought the meeting occurred on April 23 or 24, Kalmbach was not in
Washington in April after the 7th. Kalmbach, 17 Hearings 7614-15- Nelson testified that
the meeting took place on the same day they met with Secretary Connally, which, ac-
cording to Connally ’s logs, Avas March 16. See Section VI.D.2 infra. Kalmbach testified
that he. too. thought the meeting occurred in mid-March. Kalmbach, 17 Hearings 7614. The
committee staff has reviewed the logs and hotel charges of those present at the meeting and
found that the only time in March or April, 1972, when all four were at the Madison Hotel
in Washington was on March 15 and 16. Moreover, Jacobsen added that Kalmbach was about
to leave for New York at the time of the meeting, and Kalmbach’s logs indicated that he left
Washington and went to New York on March 16. Therefore, it appears that the meeting took
place on the day of the 16th.
74 Mehren, 16 Hearings 7277.
75 Mehren, 16 Hearings 7276.
76 Mehren, 16 Hearings 7273.
77 Mehren, 16 Hearings 7275. [Emphasis supplied.]
78 Nelson, 15 Hearings 6669-70.
715
Subsequent events have corroborated Nelson’s understanding; it
appears that the efforts to obtain further milk producers’ support for
the President were not terminated on March 16 but only postponed
until just prior to the election. In fact, after meeting with Kalmbach
on the 16th, the milk producers met with Secretary Connally who in
a similar fashion advised them only to postpone their contributions.
2. MEETING WITH CONNALLY
The milk producers had secured the assistance of Treasury Secretary
Connally in March 1971 in their successful effort to obtain a price sup-
port increase. A year later, in March 1972, they again turned to him for
help in the antitrust suit and several other matters. It is virtually
undisputed that they met with Connally on March 16 and discussed
their antitrust, IES, and other problems ; that Connally called Mitchell
about the impact of these problems on the President’s campaign ; and
that there was a reference at the meeting to postponing contributions
until later in the year. Lilly testified that upon Mehren’s return to San
Antonio, Mehren told him that it was also understood that the anti-
trust suit and a pending IRS investigation of MPI would be slowed
and ultimately terminated on favorable terms for AMPI. Before turn-
ing to the March 16. 1972, meeting itself, a discussion of the background
of the IRS investigation and related matters — including a possible
criminal prosecution against AMPI by the J ustiee Department for a
corporate political contribution — is set forth below.
a. IRS and Justice Department Investigations
In the course of a routine audit by IRS of the income tax return of
AMPI’s predecessor, MPI, for the 1968 fiscal year, IRS agents uncov-
ered payments in 1968 by MPI (and several of its constituent co-ops) ,
totaling over $90,000 from corporate funds to a Washington, D.C.,
printing firm ostensibly for the costs of printing a compilation of Pres-
ident Johnson’s messages to the 90th Congress, titled, “No Retreat
From Tomorrow.” 79 Upon further investigation, it w T as found that,
earlier in 1968, the printer had billed and received payment from the
Salute to the President Committee (an adjunct of the DNC) and that
the subsequent three co-op checks to that firm for the $90,000 solicited
by an official of the DNC constituted a duplicate payment and were
therefore endorsed by the printer to the Salute to the President Com-
mittee. The co-op reflected these payments on its corporate books partly
as an “Advertising” expense and partly as “Office supplies” expense. 80
The San Antonio IRS agent in charge of the audit, Doyle Bond,
notified AMPI in mid-1971 that this transaction was being investi-
gated. Bob Lilly immediately informed Jake Jacobsen, by letter dated
August 26, 1971, of the matter and concluded : “This should (and did)
raise evebrows.” 81
Jacobsen says that in 1972, after discussing the tax matter with
either Mehren or Nelson, he suggested that AMPI retain Marvin Collie
79 In addition to the amounts paid to the printing firm, approximately $14,000 more
was also paid by AMPI to two other firms for expenses relating to publication of the
book.
80 In fact, the book “No Retreat From Tomorrow” bears no indication that, it was
paid for or sponsored by AMPI and thus appears to have been of no advertising or
public relations benefit to the co-op.
81 Lilly letter, 17 Hearings 8155.
716
whom he considered “the best tax lawyer in Texas” and who was a
partner of Vinson, Elkins, Searls, Connally & Smith, Treasury
Secretary Connally’s former law firm. 82 Connally and Jacobsen each
testified that before AMPI hired Collie, Jacobsen asked Connally
whether he would have any objection. Connally told Jacobsen he did
not. 83
Connally and Jacobsen testified that their discussion took place
some time in 1972, possibly at the close of the March 16 meeting with
Mehren. 84 However, since AMPI records indicate that Collie was
retained by AMPI in January or early February 1972 and the
Jacobsen-Connally discussion took place preliminary to AMPI hiring
Collie, the conversation must have taken place prior to that meeting.
At about the same time that Collie was being retained, IRS Com-
missioner Johnnie Walters was contacted concerning the matter and
personally inquired about it from the IRS regional commissioner
from the Southwest region with jurisdiction over the MPI audit,
Albert Brisbin.
During January 17 to 19, 1972, Brisbin and Walters attended a
meeting for regional commissioners in Washington. At that time,
according to Brisbin, Commissioner Walters handed him a three-
paragraph document 85 apparently prepared by a co-op representative
stating the facts with respect to the tax matter under investigation,
and he asked Brisbin to give him a report. Brisbin says he understood
that the document had been given to Walters by some high official
at the Treasury Department, presumably Connally or one of his
Assistant Secretaries. Upon returning to Dallas, Brisbin passed the
natter (and the document) on to the then IRS District Director for
Austin, Robert Phinney, 8 ® who in turn sent it to his subordinate with
the handwritten comment : “A1 Brisbin quoted Commissioner Walters
to me saying, ‘Do what’s right but let’s close it as soon as we can.’ ”
Brisbin recalls Walters giving him those instructions at the time he
gave him the document in Washington, and he and Phinney agree that
Brisbin called Phinney personally to pass on Walters’ comment. Phin-
ney considered this a very unusual aspect of the case and said that he
did not recall any similar request from Walters.
When asked about the incident, Walters said he had no recollection
of handling the document, and he is fairly certain that he did not
receive it from Connally or any top Treasury official. Although he
knows Collie, Walters is sure Collie did not speak to him about the
case. Walters has some recollection of having heard the title of the
book and of telling an IRS official to complete the audit and not let
the matter drag on.
As a result of Walters’ inquiry, a meeting was held in Brisbin’s
office on February 1, 1972, at which agent Bond briefed the regional
officials, including Brisbin. By that time, Bond had recommended that
the matter be referred to the Criminal Division of the Justice Depart-
ment as a possible violation of title 18, section 610 (corporate political
contributions) . At the meeting, three decisions were made : the tax-
payer (AMPI) was to be given an additional opportunity to justify
the expenditures to IRS (before IRS disallowed them) ; the matter
82 Jacobsen, 15 Hearings 6470.
83 Connally, 14 Hearings 6077 ; Jacobsen, 15 Hearings 6470.
84 See Connally, 14 Hearings 6077 ; Jacobsen, 15 Hearings 6464.
85 1.7 Hearinas 8157.
86 Phinney retired from the IRS in 1973,
717
would be referred to the Criminal Division for possible criminal
prosecution; and a sensitive case report would be prepared for the
Commissioner. The report was prepared and hand-delivered by Bris-
bin to Walters a week later, when Walters was in Texas on unrelated
matters and, on February 15, the report was forwarded to Washing-
ton. Walters had no recollection of the briefing or the report.
With respect to the referral for criminal prosecution, Brisbin said
that his District Director, Phinney, still objected to the referral after
the February 1 meeting. Normally, the District Director would sign
the referral and the Regional Commissioner would not review it. How-
ever, because of Phinney’s objections, Brisbin says that, in an unusual
move, he overruled Phinney and took the matter from him and, on
February 22, 1972, personally signed the memorandum for referral of
the matter to the Justice Department. 87
Even more unusual was the reason Brisbin says Phinney gave for
his objection. According to Brisbin, Phinney didn’t object on substan-
tive grounds ; rather, Phinney expressed concern to Brisbin that- if the
matter were referred to the Justice Department, “it will be written up
in Jack Anderson.” Phinney, who was interviewed before Brisbin,
made no mention in a staff interview of any objection on his part to
the referral.
Brisbin says he understood Phinney to be concerned about possible
embarrassment to the former President and those close to him, includ-
ing Connally. Phinney had known President Johnson and Formally
for over 25 years, and had joined with Connally and several others in
1946 in investing in a local radio station in Texas.
Phinney says that he had no contact with Connally concerning the
audit, but acknowledged that Collie, whom Phinney also knew, did
speak to him once about the matter. According to Phinney, Collie told
him that he had been retained by AMPI and he was advising his client
not to oppose the IRS disallowance of the expense deduction for the
book. Phinney says that he told Collie of the referral to the Justice
Department. Although Phinney recalls Collie meeting with him in
Phinney’s office, Collie’s billings to AMPI show only one contact Avith
Phinney, a long distance telephone call on March 8, 1972.
Collie had been interviewed by the staff prior to the Phinney inter-
view. When questioned about his conversation Avith Phinney, he testi-
fied :
Q. What did Mr. Phinney tell you ? What Avas the total of
his conversation ?
A. I told Mr. Phinney that I had advised AMPI to give up
entirely on the assertions by the Internal Revenue Service and
that I hoped that, that Avould close the case.
I further said that it involved, the case involved people
of Avide public fame and that I certainly hoped that there
wouldn’t be leaks and he would take appropriate action to
make sure that the normal secrecy of the Internal Revenue
Service was asserted.
Q. What did Mr. Phinney have to say ?
A. He thanked me for the information. He said he assumed
87 Brisbin’s memo was forwarded to the Intelligence Division of IRS, according to regu-
lar IRS procedure, and then forwarded to Henry Petersen, Assistant Attorney General,
on February 29, 1972.
718
that the usual secrecy would be preserved, but he was familiar
with the case and that — well, that was about all. 88
Collie made no reference to the matter of the referral to the Justice
Department Phinney says was discussed.
During the following week (March 13-17) , the revenue agent, Bond,
met with AMPI representatives who informed him that AMPI would
not contest disqualification of the expense deduction in question.
On March 15, 1972, Bond recommended to his superior that he be
permitted to audit the returns for the subsequent 2 years (the final two
returns filed by MPI, for the periods ending June 30, 1969 and
September 30, 1969 and the first AMPI return for the period ending
June 30, 1970). In his recommendation Bond stated that “at least one
more examination should be conducted before we can really evaluate
the audit potential of the organization.” In contrast to the time spent
on the 1968 audit — according to IBS records, approximately 1,700
hours — he noted that “future examinations can be conducted in con-
siderably less time.” Within the next few days, AMPI notified IBS
that it would not contest the IBS disallowance of the expense deduc-
tions for the book, and the 1968 audit was closed. 89
At that point — after the referral to the Justice Department and
Bond’s recommendation for additional tax audits — Mehren, Nelson,
and J acobsen met with Connally.
1). The Meeting
Jacobsen says that he wanted to introduce Mehren to Connally
whom he considered to be influential in the administration. 90 Mehren
says Jacobsen told him: “Mr. Connally has become a very important
man in this administration; he is going to be an important man in
the future.” 91
J acobsen thought the first meeting would be purely introductory
and that he did not expect Mehren to take up with Connally any
problems until a later time. Instead, Mehren took the opportunity
“as a forum for discussing all the problems . . . that AMPI had been
having with this administration,” including “the antitrust suit and
dairy imports and price supports.” 92 Mehren says he told Connally
that the antitrust litigation was costing AMPI a great deal of money
and that, together with actions in other areas, evidenced “a pattern
of adverse reaction on the part of the administration.” 93
Both Mehren and Jacobsen conceded that the antitrust matter was
discussed with the hope that Connally would perhaps talk to others
to help them in the ongoing settlement negotiations, and Jacobsen
says that Connally was “sympathetic.” 94 Connally says the antitrust
suit and other problems were reviewed as “an informative type of
thing,” and he does not recall that they asked him to do anything for
them. 95
88 Collie interview, December 12, 1973.
89 The final report of the results of the IRS audit was sent to AMPI on or about April 15,
1972.
00 Jacobsen. 15 Hearings 6460.
01 Mehren. 16 Hearings 7263.
02 Jacobsen. 15 Hearings 6461. 6463.
03 Mehren, 16 Hearings 7264-65.
04 Mehren, 16 Hearings 7267 ; Jacobsen, 15 Hearings 6462.
05 Connally, 14 Hearings 6074.
719
Connally responded to AMPI’s request — immediately and appar-
ently at a purely political level. Connally says that he called Mitchell
that day or the next day to relay to him the information that the anti-
trust suit was going to have a “very damaging effect . . . [politically
upon the Republican party.” 96
By Mehren’s account Connally telephoned Mitchell during the
meeting in the presence of Mehren, Nelson and Jacobsen, despite
the fact that Connally considered this “unusual.” 97 Mehren says
Connally told Mitchell that:
I have a group of people here who seem to be somewhat
incensed with what they seem to consider systematic punitive
action of this administration . . . This can do us damage in the
Middle West ... You get some people out there and find out
what is going on because we are going to have political trouble
if we don’t. 98
Mehren says Connally also called Senator Dole, then chairman of the
Republican National Committee, and gave him essentially the same
information. 99
It appears that, in addition to these references to the political as-
pects of the antitrust suit, there was a reference to political contribu-
tions in the meeting — according to Mehren, at Connally’s initiation.
Mehren testified that at the end of the meeting Connally remarked
that political contributions “would be more useful toward the end
of the campaign than now . . . They’ll need it worse at the end of the
campaign than they do now.” 1
When Connally was asked in an executive session before the Select
Committee on November 15, 1973, whether there was any discussion of
the timing of political contributions by the milk producers, Connally
testified that he did not recall any discussion of contributions. 2 After
Mehren testified that there was, the committee asked Connally to
submit an affidavit to the committee responding to several questions
including the following :
Q. In your meeting with Harold Nelson, Jake Jacobsen
and George Mehren on March 16, 1972, was the subject of
campaign contributions from the dairy people to the Presi-
dent’s reelection effort, including the amount, form and tim-
ing of such contributions, discussed ?
Connally submitted an affidavit to the committee dated April 11, 1974,
in which, contrary to his earlier testimony, he states that he now does
recall a reference to contributions at the meeting, although he says
Mehren, not he, initiated the discussion :
During Dr. Mehren’s discourse on AMPI’s problems, in-
cluding Internal Revenue problems and the antitrust suit
which had been filed, as I recall, he made some general com-
ment to the effect that under all the circumstances AMPI
96 Connally, 14 Hearings 6075, 6078. Connally’s loss indicate a call to Mitchell on the
day of the meeting, March 16. but no record was kept of the time of his telephone calls,
except for those to and from the President. See Connally Exhibit 2, 14 Hearings 6093.
07 Connally, 14 Hearings 6075.
98 Mehren, 16 Hearings 7267. Mitchell said that he could not remember any call from
Connally about the milk producers antitrust suit. Mitchell interview, supra.
99 Mehren, 16 Hearings 7268-69.
1 Mehren, 16 Hearings 7269, 7271.
2 Connally, 14 Hearings 6076.
720
probably should discontinue all political contributions until
later. I responded by saying something to the effect that this
sounded reasonable. I do not recall any specific discussion of
campaign contributions to the President’s reelection effort
in this meeting, nor a discussion of the amount, form, and
timing of any such contributions, except as the general dis-
cussion mentioned above can be considered to encompass
these subjects. 3
Connally’s advice was consistent with Kalmbach’s message to the milk
producers that day that Kalmbach was not then accepting further
dairy contributions.
As Connally indicates in his affidavit submitted to the committee, the
tax matter was discussed at the meeting. Jacobsen expressed his opin-
ion that, although there may have been some reference to the IRS
matter at the March 16 meeting — and, according to Connally, there
was — he thought it would have been “improper” to talk to Connally
about the pending case. 4 In a conversation with Mehren after the
March 16 meeting (discussed below), Lilly recalls (based on his notes
of the conversation) that Mehren told him that Connally had called
Mitchell during the meeting and that there had been a discussion of a
“promise to go slow on IRS.” 5
At the close of the meeting, J acobsen remained behind and conferred
privately with Connally for approximately 5 minutes to discuss, in
Jacobsen’s words, “Texas politics.” Although Jacobsen and Connally
say that may have been the occasion on which they discussed Collie
representing AMPI on the IRS matter, 6 it now appears (as discussed
above) that their discussion took place at some earlier time.
c. Lilly's Account
Several weeks after the meeting, Mehren relayed to Bob Lilly the
substance of the meeting with Connally. Lilly lias contemporaneous
notes which he made of his conversation with Mehren which indicate
that it was understood that, as a result of the meeting, the antitrust
and IRS matters were going to be resolved in AMPI’s favor and milk
producer contributions were to be delayed until later in the year.
It is striking how much of Lilly’s hearsay account, given to the
Select Committee in November 1973 — the first time the Select Com-
mittee learned of the March 16 meeting — has been corroborated by
evidence subsequently obtained by the committee. According to Lilly,
Mehren, Nelson and Jacobsen met with Connally in his office in March
1972 and that, in their presence, Connally called Mitchell and discussed
(1) delaying contributions to the Republican Party by AMPI’s polit-
ical trust] (2) slowing down the antitrust suit against AMPI and,
at a later time, reducing it to a wrist slap; and (3) promising to go
slow on the IRS audit of AMPI. Lilly says that Connally then called
Senator Dole who, like Mitchell, agreed to defer any obligations
due the Republican Party, meaning contributions that might be due,
but to delay them until near the general election time. 7 Lilly says
3 Connally affidavit, 14 Hearings 6103.
4 Jacobsen, 15 Hearings, 6470-71.
5 Lilly. 14 Hearings 6117.
6 See Connally. 14 Hearings 6077 ; Jacobsen, 15 Hearings 6464.
7 Lilly, 14 Hearings. 6117.
721
he understood that the AMPI representatives had met with Kalmbach,
too, in March. 8
Since the time of Lilly’s testimony, the participants in the meeting
have acknowledged that the antitrust and IES matters were discussed,
that ('onnally called Mitchell and Dole and discussed the political
implications of these problems and that Connally at least concurred
in a delay in further contributions. Nonetheless, standing alone, Lilly’s
hearsay account, based upon a report provided by Mehren, of the under-
standings allegedly reached on the IRS and antitrust matters — not
supported by the participants — might have to be discounted. However,
at least that aspect of Lilly’s account in connection with the antitrust
suit ^is supported by events several weeks after the meeting. According
to Kalmbach and others, on April 4, Mehren — whether from a mis-
understanding of the discussions on March 16 or from an eagerness to
demonstrate to the administration his good faith intention to support
the President’s reelection effort, contacted Kalmbach and made an
attempt to make a substantial pre-April 7 contribution in exchange
for assistance in terminating the Justice Department antitrust suit
against AMPI, as discussed below.
3. DISPOSITION OF THE TAX INVESTIGATIONS
The investigation by the committee has uncovered no evidence of
any improper action taken by governmental officials after the March 16
meeting in Connally’s office either with respect to the IRS audit or
the case referred to the Justice Department. However, for several
reasons apparently unrelated to the (’onnally meeting, no further IRS
audits were undertaken that year and no criminal prosecution was ever
brought for the possible corporate contribution.
First, with respect to the IRS, the deductions in question were dis-
allowed, reducing MPI’s reported loss for the year 1968. 9 Later in 1972,
responsibility for examining farmer cooperatives was transferred from
exempt organization specialists to income tax agents. Accordingly,
Bond’s responsibility for MPI and AMPI was transferred to another
IRS agent who reviewed the returns for the subsequent years and deter-
mined that since AMPI had a loss-carryforward of over $1 million
for its tax period ending September SO, 1969, there was no “income
tax potential” to justify time-consuming audits and no additional
audits were undertaken at that time. Moreover, it was generally as-
sumed at that time that there were no additional corporate contribu-
tions by MPI or AMPI since the co-op had formed a vehicle for mak-
ing legal dairy contributions — TAPE — during the 1969 fiscal year —
the year immediately following the year that had already been audited.
It should be noted, however, that since the completion of the IRS
review in 1972 there have been disclosures of additional corporate
contributions in the 1968-72 period, 10 and full IRS audits of the returns
for 1969 forward have been undertaken. In addition, in 1974, AMPI
filed amended returns for those years, in which the loss carryforward
has been fully depleted in the 1972 return, resulting in substantial
taxable income to AMPI, including over $260,000 in 1972, alone.
8 Lilly. 14 Hearings 6123.
9 When asked of the final result in the IRS matter, Jacobsen replied that “a pretty
sizable deficiency” was paid. Jacobsen, 15 Hearings 6472. This, of course, is inaccurate.
10 See Wright Report.
722
Second, according- to Henry Petersen, Assistant Attorney General
for the Criminal Division, there was some question about the applica-
bility of section 610 to the MP1 expenditure 11 but nonetheless, the
decision was made by the Division in 1972 to investigate it further.
However, after some investigation by the FBI, the Justice Department
file was mistakenly returned to the inactive files of the Department and
not discovered until 1974 after the statute of limitations to the trans-
action in question had expired. In any event, Petersen flatly denied
any improper conduct by his Division in connection with the investi-
gation. 12
E. April 4, 1972 — An Aborted Contribution and the Antitrust
Suit
George Mehren, AMPI’s general manager, has stated publicly a
number of times that he rejected a request from Kalmbach that AMPI
make a further contribution to the President’s campaign and that his
refusal helped precipitate the Justice Department's decision to file
the antitrust suit. 13 None of the evidence uncovered by the committee
or, apparently, by the Special Prosecutor, 14 supports that contention.
In fact, as explained above, the evidence tends to show that the At-
torney General made several decisions favorable to the dairymen
after he had become fully aware of AMPI’s past and promised sup-
port for the campaign effort and after he had consulted with Halde-
man and perhaps others on the possible impact of an unfavorable
decision on further contributions. Mehren did not, even meet with
Kalmbach until after the suit was filed arid it was not until the day the
suit was filed that Haldeman was informed that the dairymen were
not going to contribute the full $2 million. What’s more, there is evi-
dence that AMPI not only tried to use its political influence to delay
the filing of the suit, but that after it was filed Mehren offered to make
a substantial contribution in exchange for assistance from the White
House on the suit.
11 The book was distributed at the end of 1967, several months before President Johnson
announced he was not seeking: re-election. Section 610 prohibits a corporate contribution
“in connection with any election „ . . political convention or caucus . . .** 18 U.S.C.
sec. 610. The question was raised by those at the Department of Justice as to the relation-
ship. if any, between the MPI expenditure and the 1968 campaign.
12 Petersen and former Attorney General Kleindienst did acknowledge in staff inter-
view that there were several inquiries in 1972 made by Connally for Jacobsen, but with
respect to another matter — a pending Criminal Division investigation of Jacobsen’s
involvement in a possible savings and loan fraud in Texas. Kleindienst remembers being
contacted by Connally and passing on the inquiry to Petersen. Petersen recalls four in-
quiries in all — two from then Attorney General Mitchell and then two more from
Kleindienst, the first after Connally had called Kleindienst and the second after a call
from the White House to Kleindienst. Petersen says he was upset over the number —
although not the content — of these calls. In any event, although it appears that Con-
nally made these calls on behalf of Jacobsen, Petersen says there was no reference to
the AMPI-IRS matter by Connally.
13 See Hoards’ Dairyman 1004 (Aug. 25, 1973). See also The Washington Post (July 26,
1973) , at A23.
14 The suggestion that political contributions in any way influenced the Justice Depart-
ment’s decision to file the civil antitrust suit against AMPI is not supported by any
documents in the possession of the Justice Department or the Special Prosecutor. Jon
Sale, Assistant Special Prosecutor, Watergate Special Prosecution Force, has filed an
affidavit in the antitrust suit in response to a motion by defendants for production of
documents. Sale’s affidavit states the following :
I am familiar with all the documents and recordings in the possession of the
Watergate Special Prosecution Force relating to political contributions from milk
cooperatives. None of these documents or recordings support AMPI’s allegations
that United States v. AMPI was filed for the purpose of inducing representatives of
AMPI to cause the Trust for Agricultural Political Education (TAPE) to make
campaign contributions directly or indirectly to individuals or organizations in-
volved in the raising of funds for the reeleetion of President Nixon. Affidavit of
Jon Sale, United States v. AMPI, W. D. Tex. (Dec. 19, 1973).
723
1. PRE-APRIL 4 DISCUSSIONS
After the antitrust suit was filed, AMPI representatives, such as
Mehren and Murray Chotiner, expressed their unhappiness over the
suit to a number of administration representatives, including Mitchell
and, as noted above, Kalmbach and Secretary Connally. At the same
time discussions about additional contributions continued.
a. Kalmbach , Jacobsen and Mehren
At the February 3 meeting with Kalmbach when the additional
$750,000 contribution was discussed, Mehren apparently talked to
Kalmbach about the antitrust suit, who according to Jacobsen, was
“sympathetic.” 15 Jacobsen says that Mehren did not want to give to
the President’s campaign after the administration had filed suit
against him and that Mehren told that to Kalmbach. 16 Nonetheless,
there Is evidence that Mehren felt- that a contribution was wise or
obligatory to fulfill prior commitments and in view of the antitrust
suit. As noted above, he told Isham early in 1972 that they were going
to have to contribute, and Jacobsen says Mehren told him that he
hoped the contribution would help alleviate the milk producers’ prob-
lem with the antitrust suit. 17
b. Chotiner and Mitchell
AMPI did not limit itself to one line of contact with the adminis-
tration about the antitrust suit; in addition to Jacobsen contacting
Kalmbach, Marion Harrison arid Murray Chotiner were contacting
the top officials at the Justice Department, including Attorney Gen-
eral Mitchell.
In late January 1972, several weeks after Mehren had replaced Nel-
son, Harrison flew to San Antonio and met with Mehren in an at-
tempt to solidify his firm’s relationship (and its $108,000 per year re-
tainer) with the new management. Mehren says that Harrison told
him that he had played a major role in arranging for the dairy con-
tributions the previous year, although, according to Mehren, Nelson,
and Parr had expressed to Mehren their opinion that Harrison had
been “ineffective” with respect to those contributions. 18 In any event,
additional contributions were discussed and Harrison gained the
impression that Mehren did not want to make any further contribu-
tions for the President’s campaign. 19
At about the same time as the Harrison-Mehren discussion of con-
tributions, Stuart Russell, one of AMPI’s counsel who was engaged
in prefiling negotiations with the Chicago office of the Justice Depart-
ment, contacted Harrison and asked him to see if anything could be
done before the suit was filed. 20 Before Harrison could act, however,
the suit was filed. Harrison then talked to Chotiner, who was coun-
sel to the Harrison firm and who had also been involved in the dairy
15 Jacobsen, 15 Hearings 6448.
10 Jacobsen. 15 Hearings 6448. 6449. Neither Mehren nor Kalmbach recall discussing
the antitrust suit at the February 3 meeting, although Kalmbach did discuss the matter
with Mitchell with whom he was discussing his solicitations of the milk producers. See
section VI.C. supra; Mehren, 16 Hearings 7260—61 ; Kalmbach 17 Hearings 7611—13.
17 See Isham interview, supra; Jacobsen, 15 Hearings 6448.
18 Mehren, 16 Hearings 7254.
19 Harrison, 17 Hearings 7689.
20 Harrison, 17 Hearings 7680-81.
724
contribution and price support activities the previous year, and the
two agreed that since Richard Kleindienst had been nominated to
replace Mitchell, who was leaving to head the President’s campaign
eflort, they should await Kleindienst’s confirmation and then speak
to him about the suit. 21
The next night, February 24, 1972, Chotiner met Mitchell at a so-
called “Agnew-Sinatra” cocktail party and asked him about the suit.
According to Chotiner, Mitchell merely puffed on his pipe. 22 Mitchell
says he attended the party but does not recall any discussion with
Chotiner. 23
Although Chotiner ’s description of Mitchell’s response seems to
indicate that the conversation was probably insignificant — and defi-
nitely one sided— Harrison thought the meeting was important enough
to describe Chotiner s account of it to George Mehren in a letter dated
the next day, February 25, 1972. The letter reads :
In view of the changing of the guard, apart from Jake’s rea-
soning, I decided, with Murray’s concurrence, not to talk with
the incumbent but to take the matter up anew with his suc-
cessor.
Then Murray ran into John at the Agnew-Sinatra party.
They had a tete-a-tete on another matter and this subject came
up. The version of the facts I surmised to you by telephone
is confirmed. I guessed “right.”
The confirmation vote will be no earlier than February 29
and probably later next week. After that, I’ll go see the new
management. ...
In a week or two I’ll endeavor to zero in. 24
Harrison explained that his “version” of the facts was that McLaren
was responsible for filing the suit and that Mitchell had merely signed
off on the suit and knew little about the circumstances of its subsequent
filing. 25 Harrison also says that his reference to “Jake’s reasoning” was
to the fact that Jacobsen felt nothing could be done about the suit. 26
However, Jacobsen testified that he does not know what was meant
by “Jake’s reasoning,” and that, contrary to Harrison’s view of his
“reasoning,” he felt political contributions could help AMPI in all its
problems, including the antitrust suit. 27
Because of the ITT scandal, Kleindienst was not confirmed by the
Senate until June 8, 1972, after which Harrison was to “zero in” and
see the new Attorney General, which he did. 28 Apparently nothing
came from that contact and, at the end of June, AMPI fired the Har-
rison firm, because, according to Chotiner, it did not get a good response
for AMPI from the administration. 29
21 See Harrison, 17 Hearings 7682 ; Weitz affidavit, Exhibit B, 17 Hearings 8010—11.
22 Weitz Affidavit, supra.
23 Mitchell interview, supra. As noted above, Mitchell in a staff interview said that
the only person other than Kalmbach with whom he would have discussed the milk
producers situation tvas Chotiner.
24 Mehren Exhibit 1~C, 16 Hearings 7352.
25 Harrison, 17 Hearings 7686.
2e Harrison, 17 Hearings 7685—86.
27 Jacobsen, 15 Hearings 6465, 6467.
28 Harrison, 17 Hearinas 7682-83. 7687.
29 See Weitz Affidavit, 17 Hearings 8011.
725
2. APRIL 4 MEETING AND CONTACTS WITH KALMBACH ABOUT THE ANTI-
TRUST SUIT AND CONTRIBUTIONS
Despite, Meliren’s alleged reluctance to contribute to the President’s
campaign and despite his conversations with Kalmbach and Con-
nally on March 16, there is evidence that Mehren made one last effort
prior to April 7 to make a substantial contribution in order to secure
White House intervention in the antitrust suit. According to Lilly
and Nelson, a meeting was held on April 4, in Mehren’s office to
discuss the matter and, as a result of the meeting, checks for a $150,000
contribution to the President’s campaign were drawn but later voided,
after Kalmbach says he rejected Mehren’s offer of a quid pro quo
involving the antitrust suit.
a. The Meeting
Present at the April 4 meeting were Mehren, Lilly, Nelson, and
perhaps for part of the meeting, Lynn Elrod, another AMPI em-
ployee and assistant to Mehren. 30 Lilly says that at the meeting it
was decided that prior to April 7 Nelson was to deliver a total of
$300,000 from the three dairy trusts ($150,000 from TAPE, $100,000
from ADEPT and $50,000 from SPACE). 31 Before consenting to
make a contribution, Mehren called John Butterbrodt, AMPI’s Presi-
dent, to obtain his approval.
As related by Lilly, Mehren also wanted to talk to Kalmbach so
that he and all Republicans would know that AMPI was not welch-
ing on its commitment made the previous year in connection with the
milk price support decision. Lilly added: “Further, Mehren stated
he expected the Justice Department to slow down its antitrust suit
against AMPI and later reduce it to a wrist slap”. 32
Lilly says that Mehren then called Jacobsen in Austin and asked
him to contact Kalmbach to arrange for the contribution. Jacobsen
called Mehren back and told him that Kalmbach would call him that
night. 33
In the meantime, 30 checks each for $5,000, for a total of $150,000,
were drawn but with the names of the payees left blank, awaiting
committee names from Kalmbach. 34 That morning, however, Robert
Isham, the sole TAPE trustee, had resigned to avoid having anything
to do with the contemplated contribution. 35 As a result, the checks
were drawn on the account of AMPI’s new T political arm, CTAPE,
which was then being organized to replace TAPE, and were signed
by the two signatories on the recently opened CTAPE account, Mehren
and Elrod. 36
30 See Lilly, 14 Hearings 6118; Deposition of Harold Nelson, United States v. AMPI,
p. 6. (March 24. 1974.)
31 Lilly, 14 Hearings 6121.
32 Lilly, 14 Hearings 6118.
83 Lilly, 14 Hearings 6121.
34 Lilly, 14 Hearings 6121 ; see Lilly exhibit 30, 14 Hearings 6191.
35 Isham interview, supra : see Isham memo, 17 Hearings 8158—63.
36 At the time the checks were drawn, there were insufficient funds in the CTAPE ac-
count to cover the checks. However, there were ample funds in the TAPE account and,
under the TAPE trust agreement, the AMPI Board had the authority to appoint a
new trustee who could either have written the checks on the TAPE account or have trans-
ferred the funds to the CTAPE account to cover the checks after they had been delivered but
before they had been cashed by the President’s campaign committees. In fact, at the
April 12-13 meeting of the AMPI board. Mehren was appointed trustee for TAPE and,
throughout the remainder of 1973, TAPE transferred over $1 million to the CTAPE account.
726
Lilly says that since only 26 checks were in the CTAPE checkbook
in San Antonio, he had to contact Jacobsen in Austin to have four
blank checks delivered that day from the Citizens National Bank, of
which Jacobsen was chairman. 37 Late in the afternoon, at 4 or 4:30,
John Parker, an officer at the bank, called Lilly and told him that
another bank employee, Don Wallace, would deliver the extra four
checks. At about 6 p.m. Wallace arrived at AMPI and delivered the
checks which were completed by an AMPI secretary, Verna Polk. 3S
It then appears that Elrod signed the four checks and took them to
Mehren’s home that evening for his signature before Mehren left San
Antonio early the next morning for an AMPI meeting in Fond du Lac,
Wis. 39
The 30 checks were voided within a day or two by Elrod at Mehren’s
direction and never delivered. Although Mehren and Elrod readily
concede that fact, both claim they have no recollection of why they
were drawn in the first place or later voided. 40 However, by Kalm-
bach’s and Lilly’s accounts, Mehren did speak that evening to Kalm-
bach who rejected Mehren’s offer of a quid pro quo.
b. Ealmbach's call to Mehren
Kalmbach says that on or about April 4 Jacobsen talked to him
by telephone and asked him to call Mehren. When Kalmbach made
the call the same evening, Kalmbach says that Mehren told him that
he was ready to make a substantial contribution but that he had
wanted to talk to Kalmbach before doing so. Mehren expressed con-
cern over the antitrust suit and asked him to speak to someone at
the White House on AMPI’s behalf. 41
Kalmbach understood the message — the contribution was to be made
in order to have Kalmbach contact the White House for help on the
antitrust suit. Kalmbach says he rejected Mehren’s offer and request.
At that point, according to Kalmbach, Mehren appeared particularly
frustrated and said something to the effect that : “here you’re asking
for contributions and you’re not willing to help.” 42 The conversation
then ended rather abruptly.
Kalmbach says he reported to Ehrlichman that, he had broken
off contact with the “milk people” because they were seeking a quid
pro quo and that Ehrlichman had told him “that’s good judgment.” 43
Although he thought it had occurred before 1972, Ehrlichman did
recall such a conversation with Kalmbach. 44
c. Corroboration of Lilly's Account
On November 16, 1973, Lilly testified in executive session that
Mehren had told him (shortly after April 4, 1972) that Kalmbach
had called him and refuse. . the contributions — just as Kalmbach testi-
37 Lilly. 14 Hearings 0122.
38 See Wallace affidavit, 17 Hearings 8001; Polk Interview, December 17, 1973.
3S> See Elrod interview, supra.
40 See Lilly exhibit 30, 14 Hearings 6191 ; Mehren, 16 Hearings 7281-84 ; Elrod interview,
supra.
41 Kalmbach, 17 Hearings 7616-17.
42 Kalmbach, 17 Hearings 7621.
43 Kalmbach. 17 Hearings 7618—19, 7622. Kalmbach is not sure whether he reported
this to Ehrlichman after his March 16 meeting 1 or April 4 conversation with Mehren.
If it was between March 16 and April 4, Kalmbach says that he anticipated that AMPI
would reauest a auid pro quo — which he says Mehren did on April 4. See Kalmbach 17
Hearings 7619, 7622.
44 See Ehrlichman, 16 Hearings 7374.
727
fled before the committee 4 months later in March 1974. As in the case
of several other incidents investigated by the committee, Lilly’s ac-
count of the meeting and of the call from Kalmbach on April 4 have
been corroborated by independent evidence, most of which was un-
known and unavailable to Lilly at the time he testified. This corrobo-
ration includes the following:
Mehren' s Logs. — Mehren’s logs indicate that a meeting was sched-
uled and held in his office on April 4 involving himself, Nelson, Lilly,
and possibly Elrod. Mehren concedes that the meeting took place but
says he cannot recall the subject of the meeting. 45
Butterbrodt? s telephone records. — Lilly testified that Mehren con-
ferred with Butterbrodt on the $150,000 TAPE-CTAPE contribu-
tion. Butterbrodt confirms that after the February 3 meeting with
Kalmbach, Mehren told him that money could be contributed secretly
to the President’s campaign prior to April 7 via State committees;
but since they had agreed to reject that approach, Mehren did not dis-
cuss another contribution with him on April 4. 46 However, Butter-
brodt’s telephone records indicate that he called the San Antonio
home office twice on the morning of the 4th and he assumes that, as
Lilly testified, he talked to Mehren at least one of those times. 47
Nelson testimony. — Like Lilly, Nelson has testified that he attended
the meeting on April 4 and that Mehren did not want to contribute
the $1 50,000 unless he was able to speak to Kalmbach to see if he could
help them with the antitrust suit. 48
The voided checks. — The CTAPE records reflect 30 checks, each
for $5,000 drawn in blank, signed by Mehren and Elrod, and voided
by Elrod. 49 Employees at the Citizen’s National Bank, John Parker
and Don Wallace, and at AMPI, Verna Polk and Lynn Elrod, confirm
Lilly’s account that 4 of the 30 checks were delivered to AMPI from
the Austin bank late on the afternoon of the 4th and apparently
rushed to Mehren’s home for him to sign them that evening. 50
Kalmbach's telephone logs. — The records of Kalmbach’s telephone
calls, and the appropriate records of the San Antonio and Austin
telephone companies, reflect that on April 4, Kalmbach called both
Jacobsen and Mehren. 51
Dwight M brris-Butterbrodt Conversation. — The committee has un-
covered further evidence to corroborate the account of Mehren’s at-
tempt. to secure a quid pro quo. In response to a committee question-
naire to present and former AMPI directors and employees, former
AMPI official Dwight Morris stated, and later testified before the
committee, that John Butterbrodt discussed the matter with him 1
week after it occurred.
45 See Mehren, 16 Hearings 7282.
40 Butterbrodt, 17 Hearings 7648-44.
47 Butterbrodt. 17 Hearings 7646-47.
48 Deposition of Harold Nelson, pp. 8-9, U.S. v. AMPI, March 21, 1974. Nelson does not
recall any discussion at the meeting of a total of an additional $150,000 from ADEPT and
SPACE.
49 See Dillv Exhibit 20, 14 Hearinas 6191—92.
50 See Parker affidavit, Wallace affidavit and Elrod and Polk interviews, supra.
61 During 1972, Kalmbach charged some of his telephone calls concerning the campaign
to an RNC credit card, and a committee search of the RNC records revealed, for the first
time to Watergate investigators, that he charged calls to one number in San Antonio and
one in Austin on the 4th. See Manuel affidavit, 17 Hearings 7977—79. A committee check
of the telephone records for the San Antonio and Austin telephone companies revealed
that, on April 4, 1972. those numbers were listed for George Mehren and Jake Jacobsen,
respectively. See Hamilton affidavit, 17 Hearings 7913—15 ; Zittle affidavit, 17 Hearings
8053.
728
Morris had been secretary to the board of AMPI and vice president
of the Southern region and Arkansas division of AMPI until Febru-
ary 1972, when he became active with some of Parr’s former assist-
ants in a rival dairy co-op group in Arkansas, the Southern Milk Pro-
ducers Association. 52 Morris says that AMPI was attempting to
squelch the revolt and absorb the rival group and that Butterbrodt met
with him in Chicago on April 11, 1972, to try to work out their dif-
ferences. In the midst of the conversation, Butterbrodt referred to the
antitrust suit and told Morris of AMPI’s efforts to handle it. Butter-
brodt allegedly told Morris that AMPI representatives 53 had gone
to Washington to see what could be done about the suit, and spent a
couple of days speaking to people at the Justice Department and else-
where, but no one would enter into a “meaningful conversation” with
them. Morris testified that Butterbrodt told him :
[F]inally after making the rounds, someone suggested that
the real way to solve their problem would be to talk to Mr.
Kalmbach.
* sje * * *
[T]hey met with Mr. Kalmbach and came to an agreement
that AMPI would pay $300,000 to Kalmbach, and that as a
result of that, the antitrust suit against AMPI would go
away.
*****
The AMPI representatives came back home with the un-
derstanding that Mr. Kalmbach would direct them where or
to whom to send the money, and before that could be accom-
plished * * * the ITT thing hit the press, and Mr. Kalmbach
sent word to AMPI that he did not want their money. 54
Although Butterbrodt does not recall telling these details to' Mor-
ris, he concedes that he may have discussed contributions with Morris
at their meeting. 55 Furthermore, he says that he knew that Mehren
and others had met with Kalmbach and Connally, and that they had
discussed pre- April 7 contributions with Kalmbach. 56
There is evidence, then, that AMPI’s top officials sought, through
Kalmbach, high-level White House assistance on the antitrust suit
in exchange for a substantial and secret pre- April 7 contribution. This
time Kalmbach — after nearly 3 years of hearing of milk producer
pledges and contributions linked to favorable decisions by the admin-
istration — backed away. At the time of the ITT scandal and in view
of the damaging publicity in connection with the previous year’s dairy
contributions and price support activities, Kalmbach decided to try
and prevent another milk producers’ scandal.
As a result, no further dairymen contributions were made to the
52 Morris, 16 Hearings 7439, 7445.
53 Morris said that he thinks Butterbrodt told him that Mehren, he and perhaps Nelson
tV* ~. ^ Washington and then met with Kalmbach. but he may just have assumed
that Butterbrodt personally was involved and that Butterbrodt’s reference to “we” may
have been merely a reference to AMPI’s representatives other than himself. Morris, 16
Hearings 7445-46. There is no evidence that Butterbrodt personally participated in con-
versations with Kalmbach.
54 Morris, 16 Hearings 7445-46.
55 Butterbrodt, 17 Hearings 7672-73.
66 Butterbrodt, 17 Hearings 7644-45.
729
President’s campaign for several months, and there is no evidence that
Kalmbach or any White House official intervened in the antitrust suit
thereafter. 57
VII. MILK PRODUCER CONTRIBUTIONS TO THE PRESI-
DENT’S CAMPAIGN AFTER APRIL 7, 1972
For the duration of 1972, the milk producers reportedly contributed
another $95,000 to the President’s campaign, primarily due to the
solicitation efforts of Lee Nunn and Clayton Yeutter of FCRP and
Jacobsen and Connally on behalf of Democrats for Nixon. In addition,
just prior to the election, Lee Nunn of FCRP solicited from CTAPE
a Presidential contribution of as much as $650,000 or $750,000, al-
legedly in satisfaction of the earlier dairy commitment dating back
at least to March 1971. In late October 1972, CTAPE contributed ap-
proximately $350,000 to Republican congressional committees, and at
about the same time, these committees transferred about $200,000 to
the RNC and then to FCRP.
While there had been transfers totaling $650,000 from RNC com-
mittees to the congressional committees some weeks before, and there
is some evidence that the $200,000 was in repayment of those earlier
transfers, a number of the RNC, senatorial, and congressional commit-
tee officials involved were not aware of any relation between the trans-
actions. There is also other evidence that the movement of the dairy
money to FCRP was part of a plan arranged by Nunn and possibly
Stans to divert the CTAPE congressional contributions to the Presi-
dent’s campaign. There is no evidence that any other officials connected
with the congressional, senatorial, or Republican national committees
knew the circumstances of the solicitation of the CTAPE contribution
or considered the contribution related to any dairy commitment to the
President’s campaign or to governmental action favorable to the dairy
industry.
A significant result of the manner in which these dairy trust con-
tributions were made — particularly those to FCRP made after the last
preelection reporting date and the CTAPE contributions routed
through the congressional committees — was that an additional link be-
tween dairymen and the President’s campaign was kept from public
view prior to the election.
A. $95,000 From ADEPT and SPACE
Late in the summer of 1972, leaders of both DI and Mid- Am met
with Connally, then head of Democrats for Nixon, and apparently dis-
cussed some of their problems with the administration and committed
$50,000 to his organization, which was contributed almost immediately
thereafter. Meanwhile, FCRP officials Lee Nunn and Clayton Yeutter,
who had taken over certain of Kalmbach’s solicitation responsibilities,
were arranging for another $45,000 to be contributed by the dairy
trusts of the two co-ops just prior to November 7, after the final pre-
election reporting period had ended.
57 In fact, there is evidence that later in 1972 at least one White House official viewed
the progress of the antitrust suit as a “positive” offset to adverse publicity over the
“milk deal” the year before. See section VII.B, infra.
730
1. MEETING WITH CONNALLY AND $50,000 FOR DEMOCRATS FOR NIXON
In an August 7, 1972, CRP memo, there appears a list of the sub-
groups of the “agribusiness” industry covered by the President’s cam-
paign fundraising effort with the following notation: “Milk Pro-
ducers — Lee Nunn and John Connally handling.” 58
Five days earlier, Connally, who headed Democrats for Nixon, had
met with a number of dairy co-op officials. Connally’s log for August
2, 1972, lists a meeting with Morgan and Westwater of DI, Gene
Baldi, general manager of Mid- Am, Hanman also of Mid-Am, and
Mehren of AMPI. 69 Mehren did not attend, but Parr, by that time em-
ployed by DI, did. 00
One of the principal outcomes of the meeting was the making of
additional milk producer contributions to Democrats for Nixon.
Jacobsen, who was assisting Connally in the Democrats for Nixon or-
ganization, says that the Mid-Am and DI officials contacted him
and said that they wanted to make a contribution to Democrats for
Nixon and to FCRP but that they wanted to talk to Connally first. 61
Jacobsen informed Lee Nunn of FCRP 62 and arranged the meeting
with Connally — as he had done on a number of occasions earlier in the
year in connection with fundraising meetings between the milk pro-
ducers and Kalmbach.
Officials of the two co-ops had discussed the matter of contributions
to Democrats for Nixon and came to Washington to meet Connally
ready to announce their commitment of $25,000 each. 63 In fact, West-
water says that he brought the $25,000 SPACE check with him to
Washington. 64
At the meeting, the dairy officials told Connally of what they con-
sidered the negative attitude of the administration toward dairy
co-ops on a number of matters, including possible antitrust violations. 65
They say they also discussed contributions to the President’s campaign.
Hanman says that although he had not intended to announce a commit-
ment for a contribution, he and the DI representatives did so at Con-
nally’s request :
Mr. Hanman. ... I think Mr. Connally asked us if we
were going to make a commitment, a contribution. He indi-
cated that he was going to have a party in Texas somewhere
where the President would be there. He would like for some of
us people to be there.
Senator Montoya. With the money ?
Mr. Hanman. No, he was inviting only those people, I think
who were going to make some contributions. And as I recall
as the way the meeting developed, that’s how we got to the
$25,000. It was an opportunity to go to this dinner and meet
the President and meet some of his supporters. And I believe
that’s about the way it developed. 66
In direct contradiction to Hanman’s sworn testimony, Connally
testified that although there may have been a “passing reference” to
68 CRP memo, 17 Hearings 8164-66.
59 Connally Exhibit 3, 14 Hearings 6094.
60 See Connally, 14 Hearings 6082.
81 Jacobsen, 15 Hearings 6472, 6473.
62 Jacobsen, 15 Hearings 6476,
83 See Hanman. 14 Hearings 5892^-93, 5895.
64 Westwater interview, swnra.
65 Hanman, 14 Hearings 5891.
66 Hanman, 14 Hearings 5893.
731
milk producers support, “the meeting in no way on August 2 was a
meeting that dealt with political contributions.”
Mr. Weitz. You are certain of that ?
Mr. Connally. I am certain of that. 67
Connally testified that, in fact, he did not even know of the two
$25,000 contributions. 68 However, aside from the testimony of Han-
roan, the records of SPACE (DPs trust) indicate that it contributed
$25,000 to the National Democrats for Nixon on or shortly after Au-
gust 2 — the day of the Connally meeting. In fact, West water says
Connally personally accepted the $25,000 SPACE check sometime
shortly after the meeting 69 — despite Connallv’s testimony before the
committee that at about the same time he refused to use the $10,000
cash for Democrats for Nixon which Lilly of AMPI had in 1971 given
to Jacobsen for Connally ’s designation for political campaigns. 70
On September 19, ADEPT ( Mid- Aims trust) contributed $25,000 —
$6,000 to the national organization and $19,000 to four State Demo-
crats for Nixon committees. 71 Connally testified that he was told only
of the contributions to the national organization — $25,000 from
SPACE and $6,000 from ADEPT. 72 However, Hanman testified that
at the August 2 meeting Connally solicited and Hanman committed
$25,000 from ADEPT (in addition to the $25,000 SPACE commit-
ment) , and Jacobsen has testified that he thinks he informed Connally
of both $25,000 contributions when they were made. 73
Connally also denied tying invitations to a September reception at
his ranch he was planning for the President to additional contribu-
tions : “No invitation to that meeting was tied to a contribution of one
thin dime.” 74 To the contrary, Hanman testified that Connally raised
the. subject of the reception in connection with contributions and the
dairy officials responded with their commitments. Moreover, the
SPACE and ADEPT contributions were completed by September 19
and representatives of both co-ops attended the reception several days
later. 75
2. $45,000 TO FCRP
On May 1, 1972, Jacobsen and two DI officials, Ben Morgan (who
had replaced Paul Alagia the previous year as executive director) and
J oseph Westwater, flew to California and met with Kalmbach. 76 Jacob-
sen says that Morgan and Westwater had told him that they wanted
to make a contribution to the President’s campaign, and he made an
appointment for them with Kalmbach. 77 While it is not clear whether
political contributions were discussed at the meeting with Kalm-
bach, 78 it appears that no effort was made to collect any further con-
tributions to FCRP from ADEPT or SPACE until several months
07 Connally, 14 Hearings 6085.
68 Ibid.
ef) See Westwater interview# supra.
70 See Section V.A., supra.
71 See Keema affidavit, supra.
72 Connally, 14 Hearings 6084-85. 6085-86.
73 Hanman, 14 Hearings 5893 ; Jacobsen, 15 Hearings 6475.
74 See Westwater interview, supra.
75 Hanman, 14 Hearings 5893, 5896-97. The reception was held on September 22, 1972.
76 Those attending the meeting agree it took place in the spring or early summer of 1972.
Westwater says in a staff interview that it was in May, and Kalmbach’s logs, in the
Committee’s possession, indicate that the only meeting with Jacobsen that month was
on May 1.
77 Jacobsen, 15 Hearings 6454.
78 Jacobsen, 15 Hearings 6455 ; Kalmbach, 17 Hearings 7619.
732
later, when Clayton Yeutter, a former USDA official and a CEP offi-
cial responsible for farm interest groups,™ became involved in fund-
raising.
In late summer 1972 Yeutter contacted Westwater of DI and Gary
Hanman of Mid- Am to solicit contributions, and each co-op’s trust
made a contribution just prior to the election : on October 28, SPACE
contributed $25,000 to FCRP and on November 6 — the day before the
election — ADEPT contributed $4,000 to each of five State FCRP
committees, for a total of $20,000. 80
Because of the timing of the contributions, they were not publicly
reported until well after the election. According to Federal election
laws, final preelection reports must be filed by political committees 5
days before the election covering contributions made up to 12 days
before the election — in the case of the 1972 Presidential election, Octo-
ber 26, 1972. 81 Westwater said in a staff interview that, although Yeut-
ter met with him well in advance of October 28 to discuss the contribu-
tion, Westwater delayed delivery of the check until October 28, and
this may have been at Yeutter’s suggestion. Westwater says he may also
have discussed the matter with Gary Hanman of Mid-Am and Marion
Harrison, whose firm had been retained by Mid-Am and DI.
B. $200,000 to the President’s Campaign
AMPI’s trust CTAPE, was also solicited for a last-minute pre-
election contribution, with the ultimate result that $200,000 of CTAPE
money was furnished to the President’s campaign.
After the ITT scandal and the Watergate break-in, there was in-
creased concern among White House officials about damaging dis-
closures in connection with the milk case. On August 31, 1972, for
example, in a memorandum to Haldeman, Ehrlichman, Colson, Clark
MacGregor, Stans, and Whitaker on the progress of the Nader milk
suit, Dean noted that as a result of possible depositions of ex-Secretary
Hardin, Chotiner, Colson, Whitaker, and others and attempts to obtain
internal White House papers, “the potential for political embarrass-
ment during the remaining months of the, campaign is high.” 82 Dean
also noted — -“on the positive side” from the White House point of
view — that the Justice Department antitrust suit was proceeding
quickly and that, “[t]his vigorous prosecution should help call into
79 See 1 Hearings 11, 19.
80 See Keema Affidavit, supra. The $25,000 from SPACE may have been used to pay
for CRP campaign leaflets. In a September 6. 1972, memo from Yeutter to campaign
official Fred Malek, Yeutter referred to the printing and distribution of 500,000' copies
each of two agriculture campaign leaflets. “President Nixon : 'The Right Choice for
America’s Farmers” and “Nobody Bullies Butz,” costing approximately $15,000 to be
paid by DI, “one of the dairy cooperatives that has been most friendly to the Administra-
tion.” Yeutter memo, 17 Hearings 8167.
According to the memo, Stans suggested that the November Group (a public relations
organization for the President’s campaign) contract with the printer and that DI
pay the printer directly for the pamphlets which it could then deliver to CRP as a cam-
paign contribution in kind. Westwater says that although he did discuss the printing
and the contribution with, Yeutter and he later received copies of the pamphlets from
Yeutter before they were distributed, he does not remember whether the contribution
was to pay for the pamphlets. However, a search of the DI and SPACE files has revealed
no direct expenditure to the printer.
81 See 37 Fed. Reg. 11942(1972).
82 Strachan Exhibit 14, 16 Hearings 7511. In a staff interview, David Wilson, former
Staff Assistant to the President and aide to Dean said that he had reviewed some
White House “milk” documents for Dean to determine the extent the claim of executive
privilege would be asserted. Although Wilson savs be saw only one reference in the
documents to political contributions (the Mar. 22. 1971, memo from Whitaker to the
President, described in Section IY.F.3 above) he did not have access to Colson’s file.
As noted above Dean, who did, apparently considered the materials damaging.
733
question any allegations by Nader that the milk producers have in-
fluenced the administration by their political contributions.” 83
Despite concern at the White House over Presidential links to the
milk producers, another contribution from AMPI’s political committee
to the President’s campaign was solicited from George Mehren
(AMPI’s general manager) by Lee Nunn, vice chairman of the
Finance Committee To Re-Elect the President, just prior to the elec-
tion — to fulfill the previous commitment made in connection with the
1971 milk price support decision, according to accounts of a number
of the participants in the events including Bob Lilly, who, as secre-
tary for CTAPE, was briefed by Mehren in late October 1972 and
made contemporaneous notes. Nunn asked Mehren for the balance of
the commitment from AMPI that dated back to 1970 and 1971. To
help meet the commitment Mehren agreed for CTAPE to contribute
$300,000 to congressional committees which according to Lilly was to
go primarily for the President’s reelection effort.
1. NUOT-MBHEEN MEETING
Lee Nunn had been involved in arranging for the milk producer con-
tributions in 1971 and, according to the August 7, 1972, CRP memo
noted above, he and Connally were “handling” the milk producers. In
early August, Connally had met with Mid- Am and DI officials and
obtained $50,000 in contributions from them; Nunn apparently fo-
cused his attention on AMPI which, as he stated, “sort of control [led]
what the others did.” 84
Nunn says that after the Republican National Convention, Stans
pressed his Presidential campaign fundraisers to solicit more money
to offset what Stans considered a likely campaign debt of as much as
$10 million. Nunn offered to solicit a contribution from AMPI and he
thereupon contacted Marion Harrison who referred him to Jacobsen
who. in turn, put him in touch with Mehren. 85 It should be recalled that
Jacobsen had told Nunn of the desire of Mid-Am and DI to make
additional contributions to the President’s campaign and that Con-
nally had, at their March 16, 1972, meeting, agreed with Mehren’s
suggestion to delay further dairy contributions until later in the
campaign. 86 This contact with Mehren appears to have been part of
the coordinated effort of FCRP and Democrats for Nixon to solicit the
three major dairy co-ops for more money just prior to the election.
Mehren says that- during the week of October 17 Jacobsen called
him and arranged a meeting between him and Nunn, whom Mehren
believes Jacobsen described as Kalmbach’s replacement as the chief
Republican fundraiser. 87 On Saturday morning, October 21, Nunn
flew to San Antonio and met Mehren in his office.
83 Strachan Exhibit 14, 10 Hearings 7512, Dean reported that the suit might be ready
for trial by the spring of 1973. In mid-1974. pre-trial discovery proceedings were still
underway — anparentl.v not because of any less vigorous prosecution, but because of two
independent factors: (1) since issues were raised in the suit about the impact of AMPI
political activities on the suit itself and other governmental matters involving AMPI,
pre-trial discovery became concerned with AMPI’s political activities: (2) there are
allegations, some uf which .have been substantiated in Committee testimony and staff
interviews, that AMPI employees willfully destroyed company documents in the spring
of 1971 and possihlv earlv 1 972 to hide certain ^ama<nnir evidence from Government
and other investigators. See Parr, 15 Hearings 6894-4)6 : Murphey interview, Dec. 11.
1973.
Nunn, 17 Hearings 7557.
83 Nunn. 17 Hearings 7556-57 : Jacobsen, 15 Hearings 6476-77.
89 See Jacobsen. 16 Hearings 6476 ; sections VI.D and VII. A, supra.
87 Mehren, 16 Hearings 7288-89, Jacobsen conceded that he talked to Nunn but denied
calling Mehren, Jacobsen, 15 Hearings 6477.
734
Nunn opened the meeting by explaining that he had replaced Kalm-
bach at FCRP and by stating that the projected Presidential cam-
paign debt was $10 million, due in large part to the media expenses
of the CEP media arm, the November Group. 88 Although Nunn does
not recall requesting a specific amount from AMPI, Mehren said
Nunn asked for $650,000. Mehren says that Nunn attached to his
request the following statements : “Well, it never could be quid fro
quo , and never would be. It is correct that, the President does remem-
ber his friends who helped him.” According to Mehren, “that is as
close to a quid pro quo statement as I think anybody ever came to
me.” 89
Mehren says he told Nunn that while the Committee for TAPE
had voted not to make any additional Presidential contributions but
only congressional contributions, he would relay Nunn’s request to
the committee members and advise Nunn of their decision. 90 Nunn
says that in view of AMPI’s reluctance to contribute to the Presi-
dent’s campaign, he made a pitch to Mehren for contributions to
Republican congressional candidates, apparently deciding not to make
a direct appeal to the CTAPE members to reverse the earlier vote.
Nunn suggested several candidates who particularly needed funds
for the remaining clays of their campaigns, but Mehren wns antag-
onistic to some of them. Nunn is not certain whether it was at this
point or later that Mehren, nonetheless, told him that he would rec-
ommend that CTAPE contribute $150,000 each to the Republican
senatorial and congressional campaign committees — for the use of
whatever Republican candidates the committees selected, presumably
including those candidates whom Mehren opposed. But before the
contributions were made, Mehren conferred first with former Presi-
dent Johnson and then his fellow CTAPE officials, including Bob
Lilly.
2. L. B. J. -MEHREN MEETING
Mehren held several high posts in President Johnson’s administra-
tion, including that of Assistant Secretary of Agriculture. Although
Mehren did not do so often, he says he decided to meet with the former
President, because he began to wonder whether his refusal to con-
tribute to President Nixon’s campaign would jeopardize the co-op. Ini
mediately after Nunn left, Mehren flew to the LBJ Ranch and met
with President Johnson on the afternoon of the 21st, pursuant to an
appointment that, he made immediately after Jacobsen had set up
his meeting with Nunn earlier in the week. 91
Mehren says he described to President Johnson his meeting with
Nunn, including Nunn’s reference to a large campaign debt, to which
lie responded incredulously, “Do you really believe that?” Mehren
answered: “[You] didn’t ask me what I believed. [You] asked me
what Mr. Nunn had said.” 92
Mehren concedes that, despite his claim that he knew of no prior
commitments, they discussed the very subject of dairy co-op commit-
88 Nurm, 17 Hearings 7556-57 ; Mehren, 16 Hearings 7294, 7296. Mehren says Nnnn
told him they were aireeriy $3*4 million in debt and would reach a $10 million debt by the
end of the campaign, Mehren 16 Hearings 7296. The campaign ended with a several
million dollar surplus.
89 Mehren. 16 HeaHnas 7261.
et> Mehren, 16 Hearings 7290, 7297. See Mehren Exhibit 3, 16 Hearings 7353.
^Mehren, 16 Hearings 7289— 90.
92 Mehren, 16 Hearings 7297.
735
ments to President Nixon’s campaign. Meliren says that when he
raised this subject with Johnson, the latter’s advice was that : “If there
be a commitment, he considered it our obligation, not mine personal-
ly, the TAPE obligation and we should meet it . . 93 Mehren at-
tempted to explain how he came to discuss with President Johnson
the subject of supposedly non-existent commitments:
I had begun to see a sequence ... of Jacobsen, Jacobsen,
and on a peripheral basis, at least, Nelson. I kept saying to
myself, why, why, why. After the Kalmbach matters, why
would Jacobsen be so persistent in this? . . . [For] some
reason or other these people found it necessary to try to get
dairy money into the Republican campaign. 91
As a result of their meeting, Mehren says that he, at President J ohn-
son’s suggestion, agreed that CTAPE should make additional con-
gressional contributions and that the trust should balance its total
contributions for the year to both parties. Mehren says that the former
President also noted that these congressional contributions could bene-
fit. the Presidential campaigns (without further linking CTAPE to
the Presidential campaign) by being used to pay for the expenses of
campaign events attended by both congressional and Presidential
candidates. 95 Mehren says that subsequently he conferred with his
CTAPE officials and obtained their approval for that approach.
One of those with whom Mehren conferred was Lilly, Secretary of
CTAPE, who testified to one significant additional detail — -that the
plan also included the diversion of some of the milk contributions from
the congressional races directly to the President’s campaign effort.
Because of that, Lilly says that he. objected. His account of the Mehren
meetings varies in some, important respects from Mehren ’s and Nunn’s.
3. LILLY- MEHREN MEETING
On October 23, 2 days after his meetings with Nunn and the former
President, Mehren met with Boh Lilly, and related to him the sub-
stance of the two meetings. 96 According to Lilly’s contemporaneous
notes, 97 there were several key items omitted by Mehren and Nunn in
their testimony which indicate that the contributions solicited — and
finally made — were expressly for the President’s campaign in satisfac-
tion of the prior commitment- made for the 1971 price support increase
As testified to by Lilly before the Select Committee on November 16,
1973, Nunn asked Mehren to contribute $750,000 for the “obligation
for the * * * 1971 price support” decision, and he suggested several
alternatives: $750,000 to Democrats for Nixon, or the Committee To
Re-Elect the President, or $325,000 each to the Republican congres-
sional and the Republican senatorial campaign committees. 98 To Meh-
ren ’s account of his meeting with President Johnson, Lilly added
the. significant element, that Mehren told him he had gone to see John-
son “to discuss the commitment of $750,000 ... [t]o the Republican
Party from a carry-over from 1971” and that it was in that context
Ibid:
94 Mehren, 16 Hearings 7298.
95 Mehren, 1 6 Hearings 7299.
m Lilly. 14 Hearings 6125—26 ; -see Mehren, 16 Hearings 7300.
97 Hee Weitz Affidavit. Exhibit A, 14 Hearings 6223-25.
93 Lilly, 14 Hearings 6126.
736
that the former President responded : “If you made the commitment,
well then, fulfill it and carry it out, regardless of how hard that it
might hurt.” 99
On the question of commitments, Lilly stated that he was told by
Mehren that President Johnson discussed a $250,000 milk producer
commitment to him, presumably in the 1964 campaign, which he
wanted fulfilled. President Johnson allegedly indicated a detailed
knowledge of the AMPI producers’ checkoff system and told Mehren
the commitment could be met by means of deductions from producers’
checks. 1 Mehren acknowledged that President Johnson discussed the
earlier commitment but denied that the former President either con-
sidered it an outstanding obligation or mentioned any system of
raising moneys by a checkoff of dairy producers to meet that prior
commitment. 2
Although Lilly testified that he could not explain the discrepancy
between the $750,000 Nunn allegedly requested for Democrats for
Nixon or FCEP, versus the total of $650,000 Nunn requested for the
congressional committees, 3 other evidence in the committee’s possession
supports the conclusion that, the $750,000 and $650,000 figures were
both related to the prior commitment for the 1971 milk decision.
It should be recalled that, in February 1972, Strachan reported to
Haldeman that Kalmbac.h was making arrangements for the milk
producers to contribute the remaining $750,000 to reach the modified
commitment of $1 million. 4 Due to the ITT scandal, further con-
tributions were delayed until just prior to the election. By the time
of the Nunn-Mehren meeting, an additional $50,000 had recently come
in from the trusts of the other two co-ops (ADEPT and SPACE)
to Democrats for Nixon, and a like amount was expected from them
for FCEP. 5 Thus, consistent with Lilly’s notes, $650,000 of the $750,000
commitment was still needed to enable the milk producers to meet
their obligation which had originated a year earlier in connection
with the 1971 milk price support, decision.
Instead of the $650,000, a total of $300,000 was contributed — the
same amount that, according to Lilly, was proposed by AMPI for the
President’s campaign just prior to April 7, 1972, in connection with
the antitrust suit. The public records of CTAPE show it going to
Bepublican congressional committees ; there is evidence that, in fact,
an FCEP official diverted most of that, money through the commit-
tees on to the Finance Committee To Be-Elect the President.
4. $3 50,000 TO REPUBLICAN CONGRESSIONAL COMMITTEES ALLEGED
$200,000 PASSTHROUGH TO FCRP
After conferring with Nunn, President Johnson, and Lilly, Mehren
says he decided to have CTAPE make a substantial contribution to
the Bepublican congressional committees and communicated his deci-
sion to Nunn and apparently Lilly. 6 However, Lilly understood that
the October 1972 contributions to the Bepublican congressional com-
09 Lilly, 14 Hearings 6180.
1 Lilly, 14 Hearings 6180-81.
2 Mehren. 16 Hearings 7279, 7336-37.
3 Lilly. 14 Hearinas 6126.
4 See Strachan exhibit 12, 16 Hearings 7504 ; section VI. C., supra.
5 Another $45,000 was contributed by SPACE and ADEPT to FCRP within the next
2 weeks. See Section VILA., supra.
* See Mehren, 16 Hearings 7300.
737
mittees went instead to the President’s campaign. 7 Although both
Mehren and Nunn deny it, other evidence in the possession of the com-
mittee supports Lilly’s account and indicates that the diversion of most
of the milk money to FCRP was done with the tacit, if not express,
approval of Mehren and w T as contemplated from the inception of the
transaction by Nunn.
a. Milk Producers' Version
According to its records, the committee for TAPE decided on
October 11, 1972 (10 days before the Nunn-Mehren meeting) , that no
further contributions were to be made to Presidential candidates and
that, instead, $25,000 would be contributed to each of the Republican
and Democratic senatorial and congressional campaign committees,
for a total of $100, 000. 8 On October 17, the two Democratic contribu-
tions were made, but no action was taken on the Republican contribu-
tions until after Mehren met with Nunn. Thereafter, on October 27,
1972, CTAPE made the following contributions : $150,000 and $27,500
(in two separate checks) to the National Republican Senatorial Com-
mittee, and $150,000 and $25,000 (also in two separate checks) to the
National Republican Congressional Committee, for a total of $352, 500. 9
Lilly says that, as Secretary of CTAPE, he transmitted nearly all
CTAPE contributions, including the two $25,000 contributions to the
Democratic congressional committees on October 17. Normally, he
would have done so for the $150,000 checks to the Republican commit-
tees, too. However, Lilly says that because the anticipated diversion
of some or all of the additional $300,000 to the President’s campaign
was inconsistent with the policy adopted on October 11 by the com-
mittee for TAPE not to make any additional Presidential contribu-
tions, Lilly refused to become involved in forwarding the $300,000 in
contributions. 10
Accordingly, Lilly sent only the smaller checks ($25,000 and $27 ,500)
to the Republican congressional and senatorial campaign commit-
tees while on the very same day, October 27, Mehren transmitted the
$150,000 checks, together with his own cover letter, to the same two
committees. 11 Mehren ivas unable to explain the reason for the
separate transmittals. 12
About a week after the contributions were sent, Lilly engaged in
wdiat he termed a “heated discussion” about the contributions with
Senator Dole who at that time was chairman of the Republican
National Committee. Lilly says the Senator called him and indicated
that he was very upset that the money was of no use to Republican
Senators because it had come in too late to be of any use in their cam-
7 Lilly 14 Hearings 6128; Lilly affidavit, 14 Hearings 6218-20. In November 1973
when Lilly testified to this effect, neither the Select Committee nor its staff had
spoken to any of the other participants in the matter and had not yet obtained the
documentary evidence relating to the disposition of the money by the Republican
congressional committees and RNC, which is consistent with Lilly’s account.
8 See Mehren. 16 Hearings 7300.
9 On October 27, CTAPE also contributed $62,500 to the Democratic congressional cam-
paign committee and $47,000 to the Democratic senatorial campaign committee.
10 See Lilly, 14 Hearings 6128 ; Lilly affidavit, 14 Hearings 6218-20.
11 See Mehren exhibits 4, 5, 6 and 7, 16 Hearings 7354-65. The check to the senatorial
committee was for $27,500, reflecting an additional $2,500 earmarked for a Republican
senatorial candidate. Although the Mehren letters were dated October 24, the $150,000
checks and the receipts were dated October 27, the date of Lilly’s transmittal letters
and checks. Lilly’s secretary, Annette Tomasini, said in a staff interview that it was
unusual not to combine the checks to the same committee on the same day.
12 Mehren, 16 Hearings 7301-02, 7305—06.
738
paigns. Although it was not expressly stated, Lilly believes Dole “had
some inkling in his mind * * * that the money might not be available
for senatorial candidates.” 13
The records of the Republican committees indicate that soon after
the CTAPE money was received the following transfers were made
from the congressional committees to the RNC and to FCRP : (1) On
October 30, the National Republican Senatorial Committee trans-
ferred $65,000 to an arm of the RNC, the Republican Campaign Com-
mittee (RCC), and on November 7, another $55,000 to RCC, for a
total of $120,000; 14 (2) on October 31, the National Republican
Congressional Committee transferred $95,000 to the RCC, and on No-
vember 3, another $6,000 for a total of $101,000 ; 15 on November 7 (the
day the four transfers were completed), a financial arm of the RNC
(the Republican National Finance Committee — RNFC) transferred
$100,000 to FCRP, and on November 13 the RCC transferred another
$100,000 to FCRP. 10 Thus, within that 2-week period just before
and after the election, the two congressional committees received
$352,500 from CTAPE and transferred $221,000 to RNC committees
which, in turn, forwarded $200,000 to FCRP.
Although Mehren denies knowing or approving of such a scheme,
he does concede that he told Nunn that the substantial additional con-
tributions to the Republicans could be used to help in the Presidential
campaign, and that he made no such representation to Democratic
fundraisers with respect to CTAPE contributions to Democratic con-
gressional committees in October 1972. 17
Mehren says that the additional $300,000 was not part of an agree-
ment with Nunn but reflected the desire by the Committee for TAPE
merely to have the contributions to Republican and to Democratic
candidates at all levels equal for the 1972 calendar year. 18 However,
the prior contribution practices of the trust and the amount of the
October 1972 contributions do not support Mehren’s explanation. Over
the years, AMPI’s trust had contributed substantially more to Demo-
cratic congressional candidates than to Republicans, and as of Octo-
ber 11, the Committee for TAPE had apparently been content to con-
tribute an additional $50,000 to each side of the aisle, leaving total
Democratic contributions for the year approximately two and one-half
times as great as those to Republicans. There the matter stood until
after Nunn solicited Mehren who then instructed Lilly to make addi-
tional contributions to both sides and, apparently, for the first time,
authorized the added $300,000 to Republicans. Had Mehren wanted
only to equalize total contributions to all Republicans and all Demo-
cratic candidates for 1972, 19 he could have accomplished this with an
additional $170,000 to Republicans alone. 20 Instead, he authorized
$300,000 more ( for a total of $352,500) , and $109,500 to the Democrats,
13 Lilly, 14 Hearings 6128.
** Clancy exhibits 1 and 2, 16 Hearings 7414-15.
lo Odell exhibit 1, 16 Hearings 7462. The committee records show that three checks
were paid by the congressional committee to RCC': .$95,000 on October 3h, $6,000
on November 3, and $2,000 on November 20. However, the $2,000 transfer appears to
have been unrelated to the CTAPE contribution.
16 See Nunn, 17 Hearings 7568 ; Odell exhibit 2. 16 Hearings 7434.
17 Mehren, 16 Hearings 7300, 7303-05, 7348. Although Mehren and several AMPI board
members met with Senator McGovern in August, 1972 and the Senator asked them for
their help, there is no evidence of any contributions directly or indirectly bv AMPI
or the other dairy co-ops or their political arms to Senator McGovern’s 1972 Presidential
campaign. See Van Dyk, 16 Hearings 7007, 7009-10.
18 See Mehren, 16 Hearings 7299.
Ibid.
20 See Lilly, 14 Hearings 6129—31.
739
making the Republican contributions greater than the Democratic
total for the year. 21 Therefore, Mehren more than balanced earlier
contributions to the Democrats in an effort to give a bipartisan appear-
ance to the substantial Republican contribution solicited by Nunn.
What’s more, two witnesses have testified that Mehren knew that
the Republican congressional contributions were going in large part,
to the President’s campaign. Nelson says that Mehren told him that,
contrary to all public statements by Mehren and the TAPE and
CTAPE reports, some CTAPE money was contributed to the Presi-
dent’s campaign in 1972. 22 As indicated above, Lilly says Mehren told
him at, the time of the transaction that the money was solicited and
contributed in satisfaction of the prior commitment to the President’s
campaign for the 1971 price support increase.
Like Mehren, Nunn denies any scheme to funnel the CTAPE money
to the, President’s campaign. Nunn asserted that the congressional
committee transfers represented repayments of earlier loans from the
RNC to the congressional committees, discussed below.
b. Prior RN C Transfers to Congressional Committees
On February 16, 1972, Stans became chairman of the FCRP and
on August 20, 1972, at the time President Nixon was nominated for
re-election at the, Republican National Convention, he acquired the
additional responsibility of chairman of the, RNC. Although Stans
did not, make himself available for personal interview, his attorneys,
in conference, with the Select Committee staff, indicated that, shortly
after the convention, the chairmen of the Republican senatorial and
congressional campaign committees asked Stans for funds in view
of their low reserves and Stans agreed to make funds available to meet
current needs.
According to Edward Terrar, chairman of the National Congres-
sional Committee, his committee had requested $600,000 from FCRP
early in 1972, but the request was turned down at, the time by Stans.
Terrar says that just after the Miami convention, he was told that an
agreement had been reached with Stans whereby the RNC was to
forego its share of the proceeds of a fundraising dinner which would
be split between congressional and the senatorial committees. Terrar
said that Stans also made a commitment for an additional $200,000
to be transferred to the congressional committee, and that, at the time
the commitment had been mutually agreed that if the congressional
committee accumulated a large cash reserve toward the end of the year,
$100,000 urnuld be refunded.
On September 26, 1972, Stans, as chairman of RNFC, sent, a letter
to the executive committee of the RNFC asking for authority to trans-
fer funds to the Senate and House campaign committees. 23 He stated
that those committees had not achieved their 1972 goals and that at
that time RNFC had cash on hand above current obligations and
necessary reserves. Stans asked for authority for the distribution of
$140,000 to the Congressional Campaign Committee and $140,000 to
21 Ibid-. By year end, total CTAPE contributions to Republicans exceeded those to
Democrats by about $20,000, even though there are perennially more Democratic in-
cumbents. particularly influential Congressional committee members from Southern and
farm states, seeking re-election than Republicans.
23 Deposition of Harold Nelson, p. 18, United States v. AMPI (March 21, 1974). See
Nelson, 15 Hearings 6684.
23 See, e.g., Odell exhibit 4, 16 Hearings 7436-37.
740
the Senatorial Campaign Committee, “this being slightly more than
our share of the gala at Miami Beach.” He also asked for authority
to distribute additional funds to those committees, to the Boosters’
Club, and to the CRP according to their needs. It should be noted that
Stans’ letter refers to “contributions,” “subsidies” and “distributions”
to the congressional committee but makes no reference to future
repayment.
The transfers were effected in the next several weeks. The RNFC
issued a check for $140,000 on September 27, 1972, to the Republican
Congressional Campaign Committee; a check for $140,000 on Septem-
ber 27, 1972, to the republican Senatorial Campaign Committee ; and
a check for $50,000 on September 27, 1972, to the Congressional Boost-
ers’ Club. The Republican Campaign Committee (an adjunct of
RNFC) issued a check for $60,000 on September 27, 1972, to the Re-
publican Congressional Campaign Committee and a check for $60,000
on September 27, 1972, to the Republican Senatorial Campaign Com-
mittee. The Republican National Associates Committee (an adjunct of
RNFC) issued a check for $100,000 on October 9, 1972, to the National
Republican Senatorial Committee. 24 Thus, the RNFC transferred a
total of $650,000 to the House and Senate Republican campaign com-
mittees from September 27 to October 9, 1972.
Stans’ attorneys say that it was understood that there would be some
repayment of these very substantial loans when the cash position of
the House and Senate campaign committees improved, and that the
transfers following the CTAPE contribution were viewed by Stans as
partial repayment of the earlier transfers.
Terrar could not recall the circumstance of the dairy contribution or
the subsequent transfers but stated that it was his belief that those
later transfers constituted the $100,000 refund on the basis of their
earlier understanding.
According to Nunn, Stans, as chairman of both RNC and FCRP,
had given his approval to the congressional committees taking the
RNC share of the proceeds of a Republican National Convention din-
ner in August 1972, and that the several-hundred-thousand-dollar
transaction was considered a loan to be repaid by the committees when
they had sufficient funds. 25 When Nunn learned from Mehren of the
intended CTAPE contributions and informed Stans, Stans reportedly
told Nunn “to contact the committees and see if they can’t make some
repayment on the loans that we have advanced.” 26
Nunn thinks he then talked to the chairmen of the two congressional
committees, and obtained their approval for repayment of the loans
from the “rather unexpected” milk contributions. 27 He then instructed
employees of the two committees, Lynda Clancy of the senatorial com-
mittee and Terrar of the congressional committee, to make the appro-
priate transfers to the RNC.
Nunn likewise says he probablv told Robert Odell, Executive Di-
rector of the Republican National Finance Committee, of the incom-
ing payments but does not remember giving him any instructions
about retransfers to FCRP. Nunn believes that such a direction would
have come only from Stans, who maintains he must have authorized
“See 17 Hearings 8169-70, 8172.
25 Nunn, 17 Hearings 7562.
2 « Ibid.
27 Nunn, 17 Hearings 7562, 7566.
741
those transfers but claims they were unrelated to the CTAPE con-
tributions.
Other officials of the congressional and RNC committees provide
a different account of the receipt of dairy money and the subsequent
transfers.
c. Other Evidence of Alleged Passthrough
Nunn’s position that the transfers from the congressional commit-
tees to the RNC represented loan repayments and not elements of a
laundering scheme to FCRP is not fully supported by testimony from
those committee employees involved in the transfers and by other
evidence in the possession of the Select Committee. In addition, it
seems to be inconsistent with other portions of Nunn’s own testimony
before the committee.
The reports to GAO by the Republican committees involved in the
transfers — the congressional and senatorial committees, the RCC and
the Republican National Finance Committee — reflect the transac-
tions as transfers (and not loans or repayments) and do not show
any loans between those committees at any time in 1972. 28 Moreover,
the congressional committee employee who transferred most of the
milk money was not made aware by Nunn or anyone else of any con-
nection between the transfers and any loan repayments. Lynda Clancy,
a Republican senatorial committee employee since 1969, testified that
on or about October 26, 1972, Nunn (whom she has known since 1969
when Nunn was executive director of the senatorial committee) called
and told her that the senatorial committee would be receiving the
$150,000 contribution and that there would be some “help” for the
committee from that money. Specifically, he told her to retain $30,000
and transfer the remaining $120,000 to an RNC committee in two
installments one week apart — $65,000 on October 30 and $55,000 on No-
vember 7. Clancy says that Nunn made no reference whatsoever to any
loans or repayments in connection with the transactions. 29 Although
Nunn claims he did not tell Clancy to transfer some of the milk money,
he does acknowledge that- he may have told her how much to keep
from the milk money. 30
Clancy says that she then called Odell, of the Republican National
Finance Committee, to ask to which RNC committee she should trans-
fer the $120,000. Clancy testified that although she did not tell Odell
who told her to issue the checks, Odell appeared to know about the
transaction and instructed her to issue both checks to the RCC, which
she did. 31
The others involved in the senatorial committee transfer of the milk
money do not quarrel with Clancy’s account. Buehl Berentson, execu-
tive director of the senatorial committee, did not remember the trans-
action when first interviewed by the Select Committee staff. When lie
was told by staff members of Clancy’s account, he did not contradict
her and said that he bad not solicited the milk money and that he must
have received his instructions for the transfer from either Odell or
Stans. 32 Clancy added that when she informed Berentson in October
28 Dale Affidavit, 17 Hearings 7881—90.
29 Clancy, 16 Hearings 7404-05, 7406-07.
30 Nimn, 17 Hearing's 7564.
31 Clancy, 16 Hearings 7405, 7407, 7411.
32 Berentson interview, Nov. 26, 1973.
742
1972 of the transaction, he replied : “At least we are getting $30,000.” 33
Although he does not remember speaking to Clancy or Nunn about
the transfers, Odell testified, upon hearing her account, that he, too,
had no reason to dispute her testimony. 34 Although Nunn testified
that he informed Odell of only the incoming moneys from the con-
gressional committees and not of the transfer to FCRP, Odell testified
that both sets of transfers were probably part of one transaction. 35
What’s more, although Odell was aware of transfers from the RNC to
the congressional committees in September 1972 shortly after the
convention, he says — again in conflict with Nunn’s account— that he
has no knowledge that those September transfers constituted loans or
that the transfers from the congressional committees to RCC follow-
ing the CTAPE contribution were connected in any way with those or
any other prior transfers. 36
No one connected with the National Republican Congressional Com-
mittee has any clear recollection of the reason for the $150,000 contri-
bution and subsequent $101,000 transfers — despite the fact that the
contribution would have been 10 times larger than any other contribu-
tion received that year. 37 Jack Caulkins, executive director of the com-
mittee, said in a staff interview that Edward Terrar, then finance
director of the committee, solicited the contribution, but Terrar has
no recollection of soliciting it or even talking to CTAPE representa-
tives. Sally Quinn, a committee employee for over 4 years, said in a
staff interview that when the $150,000 CTAPE contribution came in,
Caulkins directed her to deposit the money and Terrar instructed her
to draw the checks to RCC. 38 Terrar says that, although he is fairly
certain it was not Nunn or Stans, someone must have told him what
to do with respect to the checks and, as noted in the previous section,
he explained that the transfer was to repay earlier transfers from the
RNC. However, Quinn, who was responsible for preparing the com-
mittee’s financial statements, says she knew of the earlier transfers
from the RNC to the committee, but not of any obligations in connec-
tion with them.
Nunn’s explanation for these transactions is at variance with other
portions of his own testimony. It should be recalled that Nunn had
solicited money from Mehren for Republican congressional candi-
dates who, he told Mehren, were in need of money in the last days of
their campaigns. 39 Yet, even before the money came in, he had taken
steps to withdraw most of that extra $300,000, thereby denying it to
the congressional candidates he said needed it.
When presented with this contradiction, Nunn conceded that he
did not know how the CTAPE contributions benefited the congres-
sional campaigns for which they were supposedly received. 40 In fact,
contrary to Nunn’s representation, Odell testified that his committee
had exceeded its fundraising budget by that time and, in any event,
money coming into the senatorial committee as late in the campaign as
the CTAPE money did (that is, about 1 week before the election)
33 Clancy, 16 Hearings 7410.
34 Odell, 16 Hearings 7419- 20.
85 Odell, 16 Hearings 7423.
3fl Odell, 16 Hearings 7431.
87 See Terrar interview, November 28. 1973.
38 Quinn interview, February 13, 1974.
39 Nunn, 17 Hearings 7567.
40 Nunn, 17 Hearing s 7566-67.
743
could not be used judiciously by the various congressional candidates. 41
Neither did the ENC need the money, which, according to Stans, had
accumulated a surplus of over $500,000 before the milk money was
contributed. Indeed, of those Republican entities involved in these
transfers only FCRP allegedly had a projected deficit, as well as
what Odell considered a “judicious” use for the unexpected last-
minute CTAPE contributions — payment for the previously sched-
uled pre-election media campaign by the November Group. 42
Finally, Nunn conceded that no transfers would have been possible
without the milk producer contributions :
[T]he milk money evidently did make it possible for the
two committees to make a substantial repayment of their
loans . . . [I]t was truly milk money that made those repay-
ments because, unless those contributions had been received,
they couldn’t have made them. 43
While Nunn’s explanation that the transfers constituted repayments
of prior loans would account for routing the money from the con-
gressional committees to RNC, it would not account for the subse-
quent transfer from RNC to FCRP or for his representations to Meh-
ren of the financial need of Republican congressional candidates.
It appears then, that Nunn, who had shepherded the funds from
the milk producers all the way to FCRP and who was one of the
top finance men in the campaign involved in all facets of campaign
fundraising, must have been aware, when he spoke to Mehren, of the
financial condition of the various Republican entities and had antici-
pated the path the final dairy $300,000 would take.
Furthermore, as was the pattern in most milk producer contribu-
tions to the President’s campaign, these contributions were accom-
plished with a minimum of public detection before the election ; all of
them took place either after the last preelection reporting date or
after the election, itself. 44
* * * ii« * # *
In all, contributions from the milk producers made available for
the President’s campaign totaled some $632, 500. 45 They began within
weeks of the birth of the Nixon administration in 1969, when the milk
producers were proposing large contributions to press their views for
higher milk price supports. There is evidence that ?>y 2 years later, at
the close of the 1972 presidential campaign, they w^ere still furnishing
campaign funds to satisfy a. commitment dating back at least to
March 1971, at the time of the controversial price-support, increase
granted by the President.
41 Odell, 10 Hearings 7428, 7430. Nunn, who referred to Odell as “fairly well experi-
enced in political campaigns,” especially in finance, disputed Odell’s opinion. Nunn,
17 Hearings 7561-62.
42 Odell, 16 Hearings 7428.
43 Nunn. 17 Hearings 7573.
44 As noted above, the final preelection report was due on November 2, 1972, for
transactions on or before October 26. The CTAPE contributions and subsequent trans-
fers were made thereafter.
45 This figure consists of the following :
Kalmhach. 1969 $100, 000
Presidential committees 1971 237, 500
FCRP and Democrats for Nixon, 1972^ 95, 000
Additional CTAPE fund, October, 1972 200, 000
Total $632, 500
This amount does not include $95,000 to non-Presidential Republican committees
which is a part of the total presented by the White House in its White Paper.
APPENDIX A- PERSONS AND ORGANIZATIONS
Keister Adams — USDA official.
ADEPT — political fund of Mid-America Dairymen, Inc.
Paul Alagia — officer of Dairymen, Inc., until April 1, 1971.
A MPT— Associated Milk Producers, Inc., Nation’s largest milk producers co-
operative, headquartered in ! San Antonio.
Gene Baldi — officer of Mid-America Dairymen, Inc.
Joseph Baroody — friend of Colson and PR consultant to AMPI.
Robert Bennett — PR consultant and friend of Colson who formed 100 committees
for FCRP in 1971.
Buehl Berentson — Executive Director, National Republican Senatorial Committee.
S. E. T. Bogen — I'SDA employee.
Doyle Bond — IRS agent.
Albert Brisbin — former IRS official.
John Brown — former member of White House staff.
Martin Burns — AM PI attorney.
John Butterbrodt — President of AMPI Board of Directors.
J. Phil Campbell — Undersecretary of Agriculture.
Clifford Carter — AMPI consultant (deceased).
Henry Cashen — former White House official and aide to Colson.
Jack Caulkins — National Republican Congressional Committee official.
Murray Ohotiner — Washington attorney for AMPI and partner of Harrison and
friend of President Nixon (deceased).
Lynda Clancy — National Republican Senatorial Committee employee.
Sidney Cohen — I'SDA official.
Marvin Collie — law partner of Connally ; former AMPI attorney.
Charles Colson — former (Special Counsel to the President.
Walker B. Comegys — former aide to McLaren.
John B. Connally — former Treasury Secretary and head of Democrats for Nixon.
Gerald Connell — Justice Department official.
CTAPE— AMPI political fund after April 7, 1972.
John Dean — f ormer White House counsel.
William Delano— Trustee for ADEPT.
DI — Dairymen, Inc., Southeastern milk producers cooperative, headquartered in
Louisville.
Prank DeMarco — former law partner of Kalmbach.
Harry Dent — former White House official.
John Ehrlichman — former Chief Domestic Advisor to the President.
Lynn Elrod — employee of AMPI.
Thomas Evans — partner in President Nixon’s former law firm and finance chair-
man in 1968 Nixon campaign.
Carl Farrington — former USD A official (deceased) .
Jack Gleason — assistant to Harry Dent in White House in 1969 and 1970.
H. R. Haldeman — former White House Chief of Staff.
Gary Hanman — Executive Vice President of Mid-American Dairymen, Inc.
Clifford Hardin — former Secretary of Agriculture.
Marion Harrison — former Washington attorney for AMPI.
Jane Hart — paralegal assistant of Stuart Russell.
Erwin Heininger— AMPI attorney.
Patrick J. Hillings — former Washington attorney for AMPI and partner of
Harrison : friend of President Nixon.
Robert O. Isham — AMPI controller and TAPE Trustee, 1969-72.
E. Jake Jacobsen — former Austin attorney for AMPI; Johnson administration
official and close friend of Connally.
Roger Johnson — former member of White House staff.
James Jones — former attorney for AMPI,
Kirby Jones— former employee of Ted Van Dyk Associates.
(745)
746
Rueben Jones — former USDA official.
Herbert Kalmbach — -former President’s personal attorney and chief fundraiser.
Richard Kleindienst — former Attorney General.
Bob Lilly — AMPI official.
Joe Long — former Austin attorney for AMPI and law partner of Jacobsen.
Richard Lyng — former Assistant Secretary of Agriculture.
Richard McLaren — former Assistant Attorney General, Antitrust Division.
Richard Maguire — former Washington attorney for AMPI.
Frank Masters — attorney for AMPI.
Anthony Mathis — former USDA official.
George Mehren — General Manager of AMPI, January 12, 1972-present.
Mid- AM — Mid- America Dairymen, Inc., Midwest milk producers cooperative,
headquartered in Springfield, Mo.
Ben Morgan — officer of Dairymen, Inc.
Dwight Morris — former secretary of AMPI.
John Moser — former DI president.
James Mueller — Trustee for SPACE.
Harold Nelson — General Manager of AMPI, 1969-January 12, 1972.
Lee Nunn — Associate Finance Chairman, FCRP.
Robert Odell — Executive Director, Republican National Finance Committee.
Robert Olson — former law partner of Kalmbach.
Don Paarlberg — USDA Director, Agricultural Economics
Clarence Palmby — former Assistant Secretary of Agriculture.
David Parr — former AMPI official, 1969-72.
Henry Petersen — Assistant Attorney General, Criminal Division.
Robert Phinney — former IRS official.
W. DeVier Pierson — former Washington attorney for AMPI.
William Pleasant — former AMPI chauffeur.
William Powell — President of Mid- Am.
Sally Quinn — National Republican Congressional Committee employee.
Baddia Rashid- — Justice Department official.
Don Rice — former Assistant Director of OMB.
Joseph Rose— former house counsel for AMPI, April-September 1973.
Stuart Russell — -former Oklahoma City attorney for AMPI.
John Sarbaugh — Justice Department official.
Rebecca Schneiderman — Justice Department attorney.
Milton Semer — former Washington attorney for AMPI and law partner of
Jacobsen.
George Shultz— former Director, OMB.
Hugh Sloan — former FCRP Treasurer.
SPACE — political fund of DI.
Maurice Stans — former Secretary of Commerce and FCRP chairman.
Marvin Stetler — former president of Citizens National Bank of Austin.
Gordon Strachan — former assistant to Haldeman.
TAPE — political fund of AMPI until April 7, 1972.
Edward Terrar — former National Republican Congressional Committee official.
Ted Van Dyk — former consultant for AMPI.
Wagner and Baroody — former PR consultant firm for AMPI.
Johnnie Walters — former IRS commissioner.
George Webster — Washington attorney and chairman of Republican fundraising
committees.
Joseph Westwater — employee of DI.
J ohn Whitaker — former assistant to Ehrlichman for agriculture.
Bruce Wilson — Justice Department official.
David Wilson — former member of the White House staff and assistant to Dean.
Rose Mary Woods — President’s secretary.
747
APPENDIX B— MILK FUND— CHRONOLOGY
Date Milk producer activity Government activity Contribution activity
1967 MPI organized...
1968 D! and Mid-Am organized
1969:
Jan. 14 Stans asks Kalmbach to act as
trustee for 1968 campaign
surplus funds.
February-March.. TAPE and SPACE organized
Mar. 21 MPI officials meet with Semer
for first time.
Mar. 25 Semer contacts Gleason re: milk Kalmbach diary entry— "M H
producers. Stans Seamer (sic) $100,-
000.”
Apr. 2 Kalmbach diary entry — “Milton
Seamer (sic; — Atty. in Wash.
D.C. $100,000 Milk Pro-
ducers Assn.”
Apr. 3 Semer meets with Kalmbach in
Washington.
May 7 Semer meets with Kalmbach in
Washington.
June 13 Kalmbach diary entry— “MHS
Semer (Objectives 100
250).”
June 30— July 3 Kalmbach diary entry— "MHS
Semer 100-250 12/31.”
July 9 Semer, Jacobsen, Nelson and
Parr meet in Dallas to dis-
cuss $100,000 for Kalmbach.
July 10 Semer meets with Kalmbach in
Newport Beach, Calif.
July Stetler gathers $190,000 cash
Kalmbach reports to Haldeman
re: expected milk producer
contribution.
Aug. 1 Lilly receives $100,000 cash
from TAPE account from
Stetler in Austin and de-
livers it to Semer in Dallas.
Aug. 2 Semer delivers $100,000 cash
to Kalmbach in Newport
Beach; reiterates three “ob-
jectives.”
Kalmbach diary entry— "1”
Milt & clients to meet with
Harry Dent & Jack Gleason .
2. Objectives Milt’s clients. ”
Post-Aug. 2 Kalmbach informs Haldeman
and other White Hou se
officials of $100,000 pay-
ment.
Aug. 4-10 Kalmbach diary entry — “Ehr-
lichman * * * 4. Semer.
Tony Ulasewicz.”
Aug. 11 Ehrlichman approves of White
House meetings with milk
producers.
Aug. 19 Nelson, Parr and Semer meet
with Harry Dent and invite
President to dairy meeting.
October MPI and other co-ops merge
to form AM PI.
Nov. 3 Colson joins White House staff
as Special Counsel to the
President.
Dec. 8 Nelson, Isham and Pierson
meet and arrange $100,000
recoupment.
Dec. 17 Lilly borrows $100,000 and pays
it to TAPE.
Dec. 17 Lilly receives several hundred
thousand dollars from AM PI
attorneys and consultants for
repayment of $100,000 loan
and for other political pur-
poses.
748
APPENDIX B— MILK FUND-CHRONOLOGY— Continued
Date Milk producer activity Government activity
Contribution activity
1970 Nelson and Parr meet with Col-
problems and $2 million
pledge to President's cam-
paign.
Jan. 1 Reeves & Harrison retained by
AMPI.
Mar. 5 USDA requests Tar ff Commis-
sion study of certain dairy
imports.
Apr. 1 USDA increases milk price sup-
port level $0.38 to $4.66—
largest increase aver at start
of marketing year.
May 13 President requests Tariff Com-
mission investigation of cer-
tain dairy imports.
July ADEPT organized __
July 28-29 Tariff Commission holds hear-
ings on certain dairy imports.
July-August AMPI attempts to secure Presi-
dent's attendance at 1970
convention.
Sept. 4 AMPI first annual convention,.. President calls Nelson at con-
vention; Hardin addresses
convention and announces
school milk program.
Sept. 9 Nelson and Parr meet with the
President and Colson; Colson
writes briefing paper for Pres-
identciting milk producers' $2
M’ inuii yicuge.
September Tariff Commission sends recom-
mendations on dairy import
quotas to President.
Sept. 25... USDA official recommends no
increase for 1971 milk price
support level.
Oct. 1 Colson previously insisted that
AMPI hire Wagner & Baroody;
AMPI hires the firm as of this
date.
Nov. 19 Nelson and Harrison meet with
USDA officials re: dairy im-
port quotas.
November-
December.
Dec. 16 Hillings letter to President re:
dairy import quotes and $2
million contribution to Presi-
dent's campaign and funding
"special project."
Post-Dec. 16 Hillings' letter forwarded to
Haldeman, Ehrlichman and
Colson.
Dec. 31 President issues Proclamation
setting import quotas on
certain dairy products.
1971:
Jan. 7 Frick, of USDA, recommends no
increase in 1971 milk price
support level
Jan. 11 Harrison and Hillings meet with -
Hardin to arrange dairy
leaders meeting with Presi-
dent.
Jan. 14 Harrison sends list of dairy
leader invitees to Hardin.
Jan. 26 Hardin sends list of dairy leader
invitees to Haldeman.
Feb. 1
Feb. 2
Colson, Kalmbach, Evans, Hil-
lings, Harrison, Nelson, and
Parr meet and discuss
arrangements for $2 million
contribution.
Kalmbach meets with Halde-
man to discuss early fund-
raising for 1972 Presidential
campaign.
Colson writes memo to Halde-
man re: fund-raising from
special interest groups.
Colson writes memo to Higby
re: $100,000 milk producer
contribution for RNC dinner
on Mar. 24, 1971.
Haldeman writes memo to
Colson re: arrangements for
milk producer “support."
749
APPENDIX B— MILK FUND— CHRONOLOGY— Continued
Date Milk producer activity Government activity Contribution activity
1971:
Feb. 8.
Feb. 10.
Feb. 11.
Feb. 23.
Feb. 25.
Mar. 2_.
Mar. 3..
Mar. 4.
Mar. 5.
March..
Mar. 8-
Mar. 9__
Mar. 12.
Mar. 13....
Mar. 16...
Mar. 16-23.
Mar. 18....
Mar. 19...
Mar. 22.
Milk producers meet with
Speaker Albert, Congressman
Mills, and MacGregor re: milk
ptice supports.
Connally becomes Secretary of
the Treasury.
Antitrust Division of Justice
Department begins investiga-
tion of AMP!.
Jacobsen calls Connally re: milk Chapin letter to Hardin propos-
price supports. ing dairy leaders meeting with
President on March 23, 1971.
Harrison confiims daity meeting
with President for Mar. 23,
1971.
CCC Board approves US DA
docket recommending no in-
crease in 1971 milk price
support level and setting it at
$4.66 (80 percent parity);
Rice of OMB writes memo to
Shultz recommending no in-
crease.
Jacobsen meets with Connally
re: milk price supports.
Connally meets with President;
President discusses milk
price supports with several
advisors; Rice writes another
memo to Shultz and White
House aides urging no in-
crease in milk price supports.
Connally allegedly tells Lilly in
Washington airport “It's in
the bag.”
Chotiner leaves White House
Staff and joins Reeves &
Harrison.
Shultz writes memo to President
re: milk price supports.
Hardin announces (1) no in-
crease for 1971 milk price
supports; (2) USDA cheese
purchase program; and (3)
Presidential request to Tariff
Commission to conduct study
of cheese imports.
Chotiner talks to Ehrlichman at
Gridiron Club dinner re: milk
price supports.
Senator Nelson introduces bill
for 85 percent parity minimum
for milk price supports.
24 bills introduced to raise min-
imum milk price support level.
Ehrlichman allegedly calls Parr
re: milk price supports.
Jacobsen and Connally meet to
discuss milk price supports.
Harrison writes letter to Whit-
aker re: milk price supports.
Ehrlichman meets with Shultz,
Hardin, and other White
House aides re: milk price
supports and Mar. 23 meeting.
Senator Humphrey introduces
bill for 85 percent parity
minimum for milk price sup-
ports.
Campbell sends memo to Whit-
aker with proposed opening
remarks by President at dairy
leaders meeting on Mar. 23.
Campbell gives public speech
defending Hardin's Mar. 12
decision.
Colson writes memo to Halde-
man re: arrangements for
milk producer “support”;
thereafter, Bennett selected
to organize political com-
mittees.
Dean sends draft charter for
Bennett committees to
Kalmbach, DeMarco, Evans,
and Mitchell.
$10,000 in TAPE checks drawn
for Republican dinner com-
mittees.
750
APPENDIX B— MILK FUND— CHRONOLOGY-Continued
Date Milk producer activity Government activity Contribution activity
1971:
Mar. 23:
9:00 a.m Colson meets with Chotiner.-
10:15 a.m President calls Con nally and
discusses milk prod ucers.
10:30 a.m President meets witho Hardin,
Shultz and milk producer
leaders in Cabinet R om.
12:00 p.m President, Shultz and Ehrlich-
man meet.
4:45 p.m President meets with Ehrlich-
man, Connaily, Shultz, Hardin,
Campbell, Whitaker and Rice
in Oval Office and announces
his decision to increase milk
price supports; they discuss
talking to Colson and alerting
the milk producers of the
decision.
5:50 p.m Ehrlichman meets with Colson.
6:00 p.m Colson meets with Chotiner
Afternoon- Chotiner calls Nelson to arrange Campbell calls Nelson to ask if
evening. for meeting with Kalmbach dairymen would “get off our
at 11:00 p.m., Mar. 24, and backs” in the event of a price
inform Nelson of possible support increase,
milk price support increase.
Jacobsen calls Connaily and .
discusses price supports.
Midnight,-4:00
a.m.
Mar. 24.
5:30 p.m.
8:00 p.m.
11:00 p.m.
Post-11 :00 p.m. Nelson tells Parr he is “com-
pletely optimistic” about
price support increase.
Mar. 25
Hardin announces milk price
support increase to $4.93
(85.1 percent parity).
Mar. 29 Han man writes letter to dairy
farmer stating that TAPE,
ADEPT and SPACE programs
“played major role” in Presi-
dent’s decision.
Ehrlichman talks to Kalmbach
to arrange 11:00 p.m.
meeting with milk pro-
ducers on Mar. 24.
Jacobsen reports to dairy
leaders who allegedly
discuss milk price supports
and commitment of $250,000
in "new money.”
Nelson, Parr, Lilly and Hanman
fly to Louisville and meet
with Alagia to raise large
contributions for President’s
campaign.
Alagia confers with Morgan,
and $25,000 in SPACE
checks to Republican com-
mittees flown to Wash-
ington.
Hanman confers with ADEPT
committee members and
makes commitment of $50,-
000 to Republicans.
Ehrlichman meets with Kalm-
bach and tells him to meet
with Chotiner and Nelson at
11 p.m. to be informed of re-
affirmation of $2 million
pledge.
Republican fundraising dinner;
Chotiner speaks to Kalm-
back about 11 p.m. dinner;
Congressman Belcher says
price support increase is
imminent.
Kalmbach, Chotiner and Nel-
son meet in Madison Hotel;
Chotiner informs Kalmbach
$2 million pledge is being re-
affirmed “in view of” price
support announcement to be
made on Mar. 25.
Kalmbach meets with Ehrlich-
man and informs him that he
received re-affirmation of $2
million pledge.
751
APPENDIX B-MILK FUND-CHRONOLOGY-Continued
Date Milk producer activity Government activity Contribution activity
1971:
Mar. 30.
Apr. 1 Effective date of $4.93 milk price
support level.
Apr. 8.
Apr. 26-May 3.
Apr. 28 Jacobsen asks Lilly for $10,000
cash for Connally.
May 4 Lilly borrows and delivers
$10,000 cash to Jacobsen in
Austin for Connally.
May 14 Jacobsen meets with Connally
in Washington.
May 18.
May 21
June 16.
June 29.
July 8 ...
July 9..
Aug. 5__
Aug. 11.
Aug. 19.
Chicago office of Antitrust
Division, Justice Department,
requests grand jury for AM PI
investigation.
Aug. 20.
Aug. 26____ Lilly writes to Jacobsen that
possible corporate political
contribution uncovered in IRS
audit of MPI 1968 return.
August ,
Sept. 3.
Sept. 7.
President addresses AM PI con-
vention in Chicago.
Sept- 10 Mitchell receives McLaren
recommendation for grand
jury investigation of AM PI.
Pierson writes opinion letter to
Isham re: TAPE loan to
ADEPT.
Nelson receives 100 Bennett
committee names from Har-
rison for contributions to
President’s campaign.
TAPE loans $50,000 to ADEPT.
ADEPT contributes $45,000
to a Republican committee;
later, it contributes $5,000
to another Republican com-
mittee.
75 TAPE checks drawn for
$2,500 each to 75 of 100
Bennett committees; checks
later voided.
Dean meets with Haldeman
who decides to use "milk
money" for operating ex-
penses of President's re-
election campaign organi-
zation.
Strachan informs Haldeman
that Kalmbach and Nunn
decided not to use "milk
money” for campaign or-
ganization expenses, and
Haldeman agrees.
Harrison sends 25 Bennett
committee names to Nelson
in part "to honor a com-
mitment."
Harrison sends 25 more
Bennett committee names to
Nelson.
Hatrison gives Isham opinion
letter that Bennett com-
mittee are legal and support
President’s campaign.
TAPE contributes 50 $2,500
checks to Bennett commit-
tees.
Chotiner sends rest of 100
Bennett committee names
to Parr who forwards 25 to
Isham, 12 to Hanman and 12
to Dl.
ADEPT contributes $2,500
each to six Bennett com-
mittees.
SPACE contributes $2,500
each to 12 Bennett com-
mittees.
Colson borrows $5,000 from
Baroody for break-in of
Ellsberg's psychiatrist's
office and asks Chotiner for
another $5,000 from milk
producers.
$5,000 TAPE check delivered
to Harrison.
Harrison delivers $5,000 TAPE
check to Webster; Baroody
later obtains $5,000 cash
from Webster.
TAPE contributes $62,500 to
final 25 Bennett committees.
752
APPENDIX B— MILK FUND-CHRONOLOGY-Continued
Date Milk producer activity Government activity Contribution activity
1971:
Sept. 11.
Sept. 16...
Sept. 24...
September.
Oct. 6
Oct. 13—..
Oct. 14....,
Oct. 29...
Nov. 3....
Nov. 4
Nov. 10...
Nov. 18...
Nov. 29.
Nov. 30.
Dec. 10.
1972:
January.
Jan. 12.
Jan. 13.
Jan. 14.
Jan. 18
Jan. 17-19.
Jan. 21
Jan. 22.
Jan. 24.
Jan. 27.
Strachan informs Haldeman of
(1) $232,500 contributions
from milk producers and of
$90, 000/month commitment;
(2) adverse publicity over
milk producer contributions;
and (3) “separate arrange-
ment" for $5,000 milk
producer contribution for
Colson-Ehrlichman “proj-
ect."
Strachan confirms to Halde-
man that there exists sepa-
rate $5,000 arrangement
with milk producers.
Colson informs Haldeman of
Antitrust Division i nvestiga-
tion of AMPI.
San Antonio IRS agent gathers
evidence of apparent MPI
corporate political contribu-
tion in 1968.
Dean reports to Strachan on
Antitrust Division investigation
of AMPI.
Jacobsen allegedly asks Lilly
for another $5,000 for
Connally.
Jacobsen meets with Connally
in Washington.
McLaren sends second request
to Mitchell for grand jury
investigation of AMPI.
Chotiner meets with Haldeman
Haldeman meets with Mitchell in
"political matters meeting" to
discuss, among other things,
"milk money and antitrust
investigation of AMPI.
Lilly allegedly delivers another
$5,000 to Jacobsen for Con-
nally.
Mitchell meets with Kalmbach;
later that same day, Mitchell
meets with President and
calls Connally from Presi-
dent’s office.
Chotiner meets with Haldeman.
Mitchell rejects McLaren recom-
mendations and permits civil
antitrust investigation, only,
against AMPI.
IRS agent recommends MPI
1968 contribution be referred
to Justice Department for
possible criminal prosecution.
Mehren replaces Nelson as .
general manager of AMPI.
IRS Commissioner Walters re-
quests report from Regional
Commissioner Brisbin on IRS
audit of MPI.
Mitchell approves civil anti-
trust suit against AMPI but
directs initiation of prefiling
negotiations.
"Nader v. Butz" filed
AM PI -Justice Department pre-
filing negotiations begin.
Jacobsen contacts Kalmbach
to arrange meeting on Jan.
14, to discuss more milk
producer contributions.
Kalmbach meets with Mitchell.
Jacobsen, Nelson and Kalm-
bach meet in California and
discuss completing $2 mil-
lion contribution.
Strachan informs Haldeman of
Kalmbach progress with
milk producers.
Kalmbach reports to Mitchell
progress completing $2 mil-
lion milk producer contribu-
tion.
APPENDIX B-MILK FUND-CHRONOLOGY— Continued
Date Milk producer activity Government activity
1972:
Jan. 28 McLaren gives AMPI Jan. 31,
1972, deadline to agree to
consent decree.
Jan. 31 AMPI notifies Antitrust Division
that it cannot agree to consent
decree by deadline.
Feb. 1 Justice Department files civil
antitrust suit against AMPI,
Dean briefs Ehrlichman on
“Nader V. Bute.”
I RS officials of Southwest Region
meet and agree to adopt San
Antonio agent's recommen-
dation for referral of matter
to Justice Department of
possible criminal prosecution.
Feb. 9.
Feb. 15.
IRS sensitive case report on
audit of MPI sent to IRS
national office.
January-February.. Jacobsen asks Connally about
AMPI hiring Connally’s
former law partner for MPI
IRS matter.
Feb. 22
Feb. 24 Chotiner speaks to Mitchell
about Justice Department
antitrust suit against AMPI.
Feb. 25 Harrison writes to Mehren about
the Chotiner-M itcheH con-
versation.
Feb. 29 :
Mar. 1
IRS Regional Commissioner
Brisbin over- rules IRS Dis-
trict Director Phinney and
signs memo to refer MPI
matter to Justice Department
for criminal prosecution.
IRS refers MPI matter to
Criminal Division, Justice De-
partment.
Mar. 7
Mar. 8
Mar. 13-17
Mar. 16....
Mar. 17.
Mar. 20.
Mar. 30.
Apr. 1__
Hardin executes affidavit in
“Nader v. Butz" asserting
that sole basis for Mar. 25,
1971, decision was strictly
statutory [economic] criteria.
AMPI attorney. Collie, confers
with IRS District Director
Phinney re: MPI tax matter.
AMPI notifies IRS it will not IRS agent recommends audits of
oppose IRS finding. 1969 and 1970 MPI-AMPI re-
turns; recommendations ap-
proved.
Connally meets with Mehren,
Nelson and Jacobsen in Wash-
ington; they discuss milk
producers' antitrust and tax
problems and postponement
of additional milk producer
contributions; Connally calls
Mitchell.
- Criminal Division, Justice De-
partment, requests MPI file
from IRS.
Final IRS sensitive case report
on MPI audit sent to IRS
national office.
Effective date of 1972 milk
marketing year— and con-
tinuation of $4.93 milk price
support level.
Contribution activity
Strachan informs Haldeman of
(1) reduced $1 million milk
producer pledge and (2)
filing of antitrust suit.
Kalmbach, Mehren, Nelson,
Jacobsen, Olson and De
Marco meet in California to
discuss additional milk pro-
ducer contributions.
Haldeman scheduled to dis-
cuss milk producer contri-
butions with Mitchell in
“political matters meeting.”
Strachan informs Haldeman
that Kalmbach is arranging
for additional $750,000 from
milk producers by Apr. 7,
1972.
Jack Anderson publishes
memo re: ITT contribution
to Republican Convention.
Mitchell resigns as Attorney
General and becomes Chair-
man of CRP.
Kalmbach meets with Mehren ,
Nelson, and Jacobsen in
Washington and notifies
them he will not accept
further milk producer con-
tributions.
Kalmbach calls Jacobsen.
754
APPENDIX B— MILK FUND— CHRONOLOGY— Continued
Date Milk producer activity Government activity Contribution activity
1972:
Apr. 4.
Apr. 7...
Apr. 11.
Apr. 15.
May 1..
June
June 12
August..
Isham resigns; Mehren, Nelson
and Lilly meet to discuss ad-
ditional pre-Apr. 7 contribu-
tion to President’s campaign;
$150,000 in CTAPE checks
drawn and signed by Mehren
and Elrod but later voided.
Butterbrodt discusses antitrust
suit and dairy contributions
with Dwight Morris.
IRS forwards MPI file to Justice
Department. Files later mis-
filed by Department until 1974.
IRS audit of MPI 1968 return
closed.
Harrison speaks to Kleindienst
re: Justice Department anti-
trust suit against AMPI.
Connally resigns as Treasury
Secretary.
Aug. 2.. Connally meets with representa-
tives of Mid-AM and Dl who
commit contributions to Dem-
ocrats for Nixon.
Aug. 7.
Aug. 31 Dean informs Haldeman and
Ehrlichman of progress of
"Nader v. Bute" and Justice
Department antitrust suit
against AMPI.
Sept. 19 -
Sept. 22.
Oct. 11.
Oct. 21.
Oct. 23 Mehren discusses CTAPE con-
tributions with Lilly.
Oct. 26 .....
Oct. 27
Oct. 28...
Oct. 30-Nov. 13
Nov. 6
November Responsibility for IRS audit of
1969 and 1970 MPI returns
transferred to another IRS
agent; audits never under-
taken.
Kalmbach calls Mehren and
allegedly refuses additional
contribution and request for
"quid pro quo” in antitrust
suit.
Effective date of Federal Elec-
tion Campaign Act of 1971.
Kalmbach and Jacobsen meet
with Dl officials.
Connally heads Democrats for
Nixon; Jacobsen allegedly
offers $10,000 from Lilly for
Democrats for Nixon but
Connally allegedly refuses.
SPACE contributes $25,000 to
Democrats for Nixon.
CRP memo notes that Con-
nally and Lee Nunn are
"handling" milk producers.
ADEPT contributes $25,000 to
Democrats for Nixon com-
mittees.
Mid-Am and Dl representa-
tives attend Democrats for
Nixon campaign function for
the President at Connally's
ranch.
CTAPE votes not to make any
further Presidential contri-
butions but to contribute
$25,000 each to Democratic
and Republican congres-
sional committees.
Lee Nunn meets with Mehren
in San Antonio and solicits
$650,000 more for Presi-
dents campaign. Mehren
meets with former President
Johnson to discuss CTAPE
contributions.
Closing date for final pre-elec-
tion reporting date.
CTAPE contributes $352,500 to
Republican congressional
committees.
SPACE contributes $25,000 to
FCRP.
Republican congressional com-
mittees transfer $221,000 to
RNC committees which trans-
fer $200,000 to FCRP.
ADEPT contributes $20,000 to
FCRP committees.
Note: Subsequent events in 1973 and 1974 relating to the milk fund investigation including those related to the Select
Committee's inquiry begun in September 1973, and certain disclosures by the White House, including the statements by
the President ahd in the White Paper, have not been included in this chronology.
\
755
APPENDIX C
SELECTED DOCUMENTS
Attachment to Johnson Affidavit
MEMORANDUM
THE WHITE HOUSE
WASHINGTON
December 17, 1970
TO: H. R. HALDKMAN
FROM: ROGER JOHNSON
SUBJECT: Letter to the President from Pat Hillings.
Fat Hillings handed me the attached letter and asked
that it be directed to the President. It concerns a matter
with which both Peter Flanigan and Chuck Colson are familiar
and on which they are working.
756
The White House (
WASHINGTON x
TO: &
FROM: JOHN BROWN
fyi ;
COMMENT ******
757
Nelson Exhibit No. 1
LAW OFFICES
Reeyes 6 < Hahbison
SUITE 500
1701 PENNSYLVAN IA AVENUE, N . W.
WASHINGTON, O. C. 20006
:PHONE 202 SOB'S!
ELEX 44037 0 CSDK
CABLE "REEVLAW”
December 16, 1970
The Honorable Richard Nixon
The White House
Washington, D. C.
Re: §22 Tariff Commission (Milk) Recommendations
Presidential Proclamation ■
Dear Mr. President:
This letter discusses a matter of some delicacy
and of significant political impact.
Since January l my Washington partner Marion
Harrison (one of your 1968 Virginia Co-Chairmen) and I have
represented Associated Milk Producers, Inc, ("AMPI"). At
the White House in September you privately met AMP I ' s ' two
key leaders, Harold Nelson and Dave Parr. You spoke by tel
phone from the beach at San Clemente to Secretary Hardin an
to Harold Nelson during AMPI’s annual convention in Chicago
Labor Day v/eekend. You told Harold of your intent person-
ally to address AMP I ' s next annual convention (a gathering
of almost 30,000 dairy farmers and their families).
AMPI has followed our advice explicitly and will
do so in the future. AMPI contributed about $135,000.00 to
Republican candidates in the 1970 election. We are now work-
ing with Tom Evans and Herb Kalmbach in setting up appropri-
ate channels for AMP, I to contribute $2 million for your re-
election. AMPI also is funding a special project.
On September 21 the Tariff Commission recommended
to you, after it did a study you requested in May, four spe-
cific quotas for four specific dairy products. These recom-
merdaciono are we 1.1 do cum anted and by now are vel i fcriowr. in
the dairy and' related industries. No Presidential Proclama-
tion has been issued.
The problem is this. The (dairy industry cannot
understand why these recommendations were not implemented
Qj (D
758
very quickly. The longest the Democrats ever took to im-
plement a Tariff Commission dairy recommendation was 16
days. On one occasion. President Johnson even imposed
quotas before he received the Tariff Commission’s recom-
mendations I
The overall parity ratio is at its lowest since
December 1933. Farmers generally are unhappy with the
economy. You know our farmbelt losses in the election.
The Government saves money (by saving price sup-
port payments) and the farmer makes money when the recom-
mended quotas are imposed. The products are all "evasion"
products - that is, products which historically were not
imported but which started to be imported only after quotas
were imposed on other products.
The dairy and related industries have great faith
in your personal leadership. At the same time, they are
shaken by the economy. The right kind of Proclamation is-
sued quickly would dramatize your personal interest in a
large segment of agriculture.
This problem is bogged down within the White
House. It is a victim of the bureaucracy - the Trade Bill
people, the National Security Council people, the domestic
people. It has been studied and restudied. It is not
moving.
We write you both as advocates and as supporters.
The time is ripe politically and economically to impose the
recommended quotas. Secretary Hardin, the Tariff Commission
and the dairy industry all support this. All that is neces-
sary is a simple Proclamation implementing the four specific
Tariff Commission recommendations.
(We attach a more detailed Memorandum. The sub-
ject is quite interesting if you have time for it.)
P JH : ek
Enclosure
759
- ORGANIZATION CHART -
1971 MILK PRICE SUPPORT DECISION
UNITED STATES DEPARTMENT OF AGRICULTURE
Se cretary
Dr. Clifford Hardin
Department of-
Marketing &
Consumer Services
Richard Lyng,
Assistant Secretary
Undersecretary ^
'J. Phil Campbell'
(jerry slebert, Aide)
-Department of
Agricultural Economies
Dr. Paarlberg, Director
I
Anthony Mathis
Department of International Affairs and Commodity Programs
Clarence Palrnby, Assistant Secretary
AGRICULTURAL STABILIZATION AND
CONSERVATION SERVICE
COMMODITY CREDIT CORPORATION
BOARD OF DIRECTORS
Kenneth E. Frick Administrator
Carroll Brunthaver, Associate Administrator
Deputy Administrator Commodity Operations
Carl Farrington (deceased)
Livestock and Dairy Division
Reuben Jones, Director
Keister Adams, Deputy Director
Program Development Branch
Sidney Cohen
1. SECRETARY HARDIN
2. UNDERSECRETARY CAMPBELL
3 . Assistant Secretary Palmby
4. Assistant Secretary Lyng
5 . Brunthaver
6 . Frick
7 . Assistant Secretary
Thomas Cowden
8 . General Counsel Edward Shulman
9 . Dr. Donald paarlberg.
Director of Agricultural
Economics
Ted Bogan
760
Kalmbach Exhibit No. 4
ITIKEBARY/AGENDA
Wednesday. March 24. 1071
Hotel
Depart LAX via UAL 52
Arrive Dulles
P/U by WH auto
8:30 am
4:15 P®
The Madison
15th & M Sts.,NW
202/483-6400
5:30 pm
Meeting w/John Ehrlichman In
his office
6:30 pm
Meeting w/Dan Hofgren at Washing-
ton Hilton
8:00 pm
Dinner (RFCj meeting first at
Suite #p/l - Gus Levy's name)
11:00 pm
After-dinner meeting (to be
scheduled)
Thursday. March 25. 1971
8:30 am
Meeting In coffee shop of Madi-
son w/Tom Evans
9:00 am
B'fast. meeting at the Madison
with John Hollins
11:00 am
Meeting with Gordon Strachan and
Bob Haldeman in Haldeman's office
at the WH
1:00 pm
Luncheon meeting in Ehrlichman 's
office with Ehrlichman. Mllbank
and George Murphy
3130 pm
Meeting with P/M General Blunt
In the Post. Master General’s
Office
4:00 pm
Meeting in Em. 6802 of the
Department of Commerce with M.
Stans and other business people
6:00 pm
At the Madison (changing for
dinner)
7:30 pm
Dinner at the WH
11:00 pm
Back to the Madison
Friday. March 26. 1971
8:30 am
Breakfast meeting at the Water-
gate with M. Stans
10:00 am
At the WH — probably meeting
with Mr. Finch
12:00
3:00 pm
A/F #1 leaves Andrews AFB
with one stop - arrives at
El Toro
Mrs. Kalmbach to p/u
Saturday. March 27. 1971
10:00 am Golf at LACC w/Mark A. Soden
and Don Martin
HWK/ah
3/24/71
Strachan Exhibit No. 4
THE WHITE HOUSE
WAS hington
administratively c confidential
Dt"" I'TO
MEMORANDUM FOR :
FROM :
September II, 1971 * *-*
JA:Uc (373^
j,»tzzF. b/.uvic.'fBj
H. R. HALDEMAN
GORDON STRACHAN
SUBJECT : • Milk, Money
I >; ^ . " . .
..Lee Nunn reports that $232, 500 has been realized. This is'."” C..V /•
slightly more than one-half of the amount that should have
been delivered on the commitment ($90,000 per month).
However, a much more disturbing element has emerged. ■
Frank Wright, a reporter for the Minneapolis Star has inter-
viewed six of the chairmen of the front committees and Bob
Bennett (the man handling all of the transactions). Bennett
has told Nunn that no damaging information has been released.
Kalmbach, Dean, Nunn, and Tom Evans of New York dis-
cussed this development late yesterday. Nfk action has been
taken.
It is Nunn and Sloan's opinion that Colson has established a
separate, agreement with the milk people in order to have cash
available. I have not checked with Colson as this may be an
agreement outside of my area of responsibility. If the alleged :
Colson agreement has your approval the matter will be dropped. '
If it does' not you may want to re-emphasize your policy of
tsmgle ^contact (Kalmbach) with all contributors^
D rop this matter
^C heck Colson
Other
w
1 (M^ -
(f
CTTK
EXHIBIT C
762
Strachan Exhibit No. 7
THE V/HITE HOUSE
WAo H I N G T O N
September 24, 1971
MEMORANDUM- FOR: H. R. HALDEMAN
FROM: CHARLES. COLSON.
SUBJECT: Milk Producers
For obvious reasons, I should not be involved with respect
to the following. There is underway in the Justice Depart-
ment at the moment an Anti-trust Division investigation of
the milk producer cooperatives. Attached is the 1956 court
decision exempting the milk producers from application of
the Anti-trust laws. If this goes too far there will be a
number of very serious adverse consequences which I would
be glad to elaborate on in detail.
I do think this should be taken up at one of your meetings.
I would like to stay out of it. '
St ra chan Exhibit No. 9
The »Vrin'o •■•>.*usa
WASMJNOTOM
Date : 11-3—71 =
H.R. EALOZMAN
GORDON STRACHAN
The Attorney General asked Jab
Magruder for an agenda for the
political natters meeting
tentatively scheduled for Thurso
. October 4 at 4:00 p.n. The AG
received a copy of the attached
agenda. He did not, of course,
receive a copy of the talking
paper, nor has he receiv r ed
materials on the subjects to be~
covered after Magruder and
Strachan depart.
TO:
FROM:
764
TALKING PAPER FOR THE ATTORNEY GENERAL
- 11 -
*******
15. As you probably know, the Milk Producers currently
enjoy an antitrust exemption resulting from a 1956
decision by the Federal District for the District of
Columbia. A report here at the White House indicates
the Antitrust Division at Justice is now investigating that
exemption. Another report indicates that the Washington Post
has assigned four reporters full-time on the milk money
project. Do I understand correctly that you have directed
John Dean to review any reports that have to be filed on
the Hill connected with the receipt of the milk money?
* * * * * * *
A TRUE COPY
765
Strachan Exhibit No. 10
Finr.ncas
I) Kerb Kalmbach met with Messrs. Jacobsen and Nelson on January
the 14th concerning the milk money. Kalmbach had a "good
meeting"; the money will continue to come in, but the milk
people do not want to continue to deal with Reeves & Harrison
(Chotiner's firm.). Kalmbach would take over this project as
a' special assignment. He will ask the Attorney General on
January the20th. The Attorney General approved of Kalmbach
meeting with Jacobsen even though Milt Seimer is Jacobsen's
law partner and Treasurer of the Muskie campaign. Kalmbach
.informed Colson of the meeting but would not tell Colson
'v.’ho asked him. to see Jacobsen. Kalmbach believes someone
■should give all information about the milk situation to
Colson. . 1 told him Colson was no longer involved.
Recommendation :
That you inform. Colson of the milk situation, and that
DEC o -1973
JAMES F. DAVEY,. Clerk
766
St ra chan Exhibit No. 11
RAKPUM FOR:
FROM :
SUBJECT :
Fa brv,-!.ry 1 / 1972
II. R. HMLDEMJ'vM
Gor.ooN straciiam (Z
Political Matters
- 2 ~
c) Kalmbach. is very concerned about his involvement ; n
the milk producers situation. He believes that Jacobsen
and Kelson '.■.'ill deliver though they have cut the ori.cj.na l
2,000 commitment back -to 1,000 . Kalmbach' s concern canto
around the recent press disclosures that link Jack
Gleason and the '70 campaign election funding, Kalabach
will accept the risk of being subpoeaad by the cour
connection with the Nader milk suit. The Attorney
believes Kalmbach should continue to handle the milk
project, but Kalmbach wants your advice.
d rr
767
Strachan Exhibit No. 12
MEMORANDUM FOR
FROM:
• SUBJECT :
H.R. HALDEMAN
GORDON STRACHAN
Political Matters
Finances
4) EerfSobach is working with the milk people
533 currently banked to 1,000 by April
to increase
fiued
DEC 5 - 1973
JAMES F. DAVEY, Clerk'
768
Attachment to Wilson Affidavit
off:ce 05 .
The Attorney General
• •
■ !* g'
l
i *-•
MEMORANDUM FOR: ' DICK MCLAREN ’ •
• i
PER OUR CONVERSATION I REQUEST THAT YOU
GO THE CIVIL ROUTE. ;
770
Mehren Exhibit No. 1-C
MARION COWVN HARRISON
ERNEST OCNC BCGVC#
POOtM f. SAOtl
MYRON SOLTtR
CHAOlCS EMMET LUCEY
LAW OrFICCS
Ruuviss tk JIahhison
suite 500
1701 PENNSYLVANIA AVENUE. N. W.
WASHINGTON, D C. 20000
T C LET HONE 202 200-9030
TELEX -*40370 CBDK
CAOLC -RCEVLAW*
MURRAY M CMOTINC*
February 25, 197 2
Dr. George L. Kehren
General Manager
Associated Milk Producers, Inc.
GPM Building, 4th Floor
San Antonio, Texas 78216
Re: United States v AMPI
CA , fe5A 72 CA 4 9
DSDC/ WD, Texas, San Antonio Division
Dear George:
In view of the changing of the guard, apart
from Jake's reasoning, I decided, with Murray's concurrence,
not to talk with the incumbent but "to take the matter up
anew with his successor. ;
Then Murray ran into John at the Agnew-
Sin£±ra party. They had a tete-a-tete on another matter
and this subject came up. The version of the facts I sur-
mized to you by telephone is confirmed. I guessed "right".
The confirmation vote will be no earlier
tl. ul .'r-bcuury 29 and probably later next week. After that.
I'll go see the new management.
By a copy of this letter I'm suggesting to
Stuart that he negotiate at the working level - regional
or Washington - as long as possible and as meaningfully -as
possible. In a week or two I'll endeavor to zero in.
Sincerely,
l^ned) MARION HOVvYN HARRISON
KART ON EDWYN HARRISON
771
CRNCST GCNC REtVtS
RODCAT f. SAGLC
MtftON SOUtR
CHARLES CMMCT LUCCV
Mehren Exhibit No. 1-B,
LAW OFFICES
Rbisvbs Sc IIaurison
SUITE 500
1701 PENNSYLVANIA AVENUE. N. W.
WASHINGTON, D. C. 20000
TELEPHONE 202 290-0030
TELEX 440376 CRDK
CABLE “RECVLAW"
op coui'R* 1,
MURRAY M LMOTINCW
February 25, 1972
Stuart H. Russell, Esq.
2290 Liberty Bank Tower
Oklahoma City, Oklahoma 73102
Re: United States v AMRI
CA #5A 72 CA 49
USDC, WP, Texas, San Antonio Division
Dear Stuart:
The attached copy of our letter of even date
to George Mehren is self-explanatory. There's nothing like
being able to control a subordinate or, phrased another way,
beware of confirmed judges who aren't judging yet! (I am
aO-uid the instructions, however, are down the line and that
..".county for the evident implacability of those with whom
you are dealing.)
1 have read yours of February 22 and the en-
closure. Your deft hand, "rough draft" or otherwise, covers
all points X should think we would want to surrender but,
of course, the frame of reference for my comment is littlfe...
more than the pleadings - hardly the background of an expert.
X do wonder about the need for §VIII and about the psycho-
logical affect upon the members to include them in the manda-
tory distribution set forth in §IX but I recognize both those
MEH:h
cc Dr. George L. Mehren
772
Appendix D
SELECTED HOUSE JUDICIARY COMMITTEE MATERIALS *
THE WHITE HOUSE
v.-- ro*{
June 24; 197Q
CONFIDENTIAL ; ’ . .
MEMORANDU M FOR CHARLES W. COLSON - •
L3
From: Jack A. Gleason,
Re: Milk F roducers
«s
001315
Chuck j . v: • ; .
As we discussed yesterday, it seems logical to mo to turn over to
ypu most of the responsibilities for handling the Milk Producers, as
they would normally belong in your area anyway. The mechanics on
their support to us this year haye been 'straightened out so that Dave
Parr will coordinate directly with me on collection and distribution
of support.
In the meantime, there are a few outstanding items that need to go
into your pending problem category;
•{A) First, Milk Producers for some time have been seeking
to have the boss appear at one of their national meetings. This has
been discussed and has gone around and around in the White House
for some time without result as yet. However, you should know that
they have now scheduled their next annual meeting for early September
to be held In Chicago. As I understand it from Dave Parr, this meeting
would include at least 15, 000 of their members.
(B) The next question is that of the possibility of having the
President request that the Tariff Commission take emergency action
on dairy imports in a similar fashion to that which Johnson did in.
July of '67 following the March 30, 1957, request for a Tariff
Commission investigation. I am attaching to this memo a copy of
a letter Parr prepared which spells out in some detail exactly what
they are looking for. The problem evidently is that since we
* Note: After the preparation of the Select Committee's Report*- the
House Judiciary Committee considering impeachment of the President
publicly released certain Presidential transcripts and documents
that the’ Select Committee had previously subpoenaed from the President
but which he had withheld. Certain of these material?
yjf] are included in Appendix D.
773
JACK GLEASON MEMORANDUM^ JUNE 24 3 1970 , 1-2, WITH' 'ATTACHMENT
- 2 -
recommended the Tariff Commission begin, an investigation of
dairy imports again, the European importers nave begun to dump
increased quantities of their product on our market. Parr is
cognizant of the line of the President's last address on the state of
the economy regarding the possible need for increasing all imports
to offset inflationary pressures, but that, of course, in no way
lessens his interest in. achieving the above. I mentioned this to
John Whitaker yesterday, but he is not familiar with the problem
and 1 therefore assume that at this stage of the game neither
Agriculture nor Whitaker Is seriously contemplating the request
for emergency action.
In any event, I would believe it advisable for you and 1 and Dave
Parr to get together at some point in the near future to go over
these and a few other smaller items.
Over to you.
001316
cc: Harry S. Dent
774
ATTACHMENT TO. JACK GLEASON MEMORANDUM
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Dear Mr. President:
On May 13, 1970, in accordance with my advice and recommendations,
you directed the United States Tariff Commission to make an immediate
investigation under Section 22 of the Agricultural Adjustment Act, as amended
(7 U.S.C. 624) to determine whether certain dairy articles (ice cream choco-
late crumb with a fat content of 5.5 percent or less, animal feeds containing
milk o tsic] milk derivatives, and certain cheese containing 0.5 percent or
less by weight of butterfat) are being, or are practically certain to be,
imported under such conditions and in such quantities as to render or tend
to render ineffective or materially interfere with the price support programs
now conducted by the Department of Agriculture for milk and butterfat, or to
reduce substantially the amount of products processed in the United States
from domestic milk and butterfat. Tou have directed the Tariff Commission
to report its findings and recommendations to you at the earliest practical
date.
Pursuant to Section 22, I hereby advise that I now have reason to
believe that certain additional articles are being imported, and are practi-
cally certain to be imported, under such conditions and in such quantities
as to render or tend to render ineffeotlve, or materially interfere with,
the price support programs now conducted by the Department of Agriculture
for milk and butterfat, and to reduce substantially the amount of products
processed in the United States for domestic milk and butterfat.
Specifically, reference is made to the following articles:
1) Swiss or Emmenthaler cheese with eye formation; Gruyere-
process cheese; and cheese and substitutes for cheese
containing, or processed from, such cheeses; all the fore-
going, if shipped otherwise than in pursuance to a purchase,
or if having a purchase price of 47 cents per pound or more.
2) Cheese and substitutes for cheese provided for in items 117.75
and 117.85, part 4C, schedule 1 (except cheese not containing
cow's milk; cheese, except cottage cheese, containing no
butterfat or not over 0.5 percent by weight of butterfat, and
articles within the scope of other import quotas provided for in
this part) ; all the foregoing.
3) Lactose, a dairy product manufactured from whey.
Indistinct document retyped by
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775
ATTACHMENT TO JACK GLEASON MEMORANDUM
Indistinct document retyped by
House Judiciary Committee staff
The imports of these articles have been increasing rapidly during
1970 and will apparently continue to do so if no action is taken to
restrain such imports. It is, in my judgment, most desirable that the
Tariff Commission make recommendations to you as to the effect on price
support programs of imports of quota-type cheeses selling at a price at or
over 47 cents per pound and imports of quota-type "other cheese" under
existing quota levels, including the 7.5 million pound allocation in this
category to New Zealand. I have also concluded that there should be an
investigation of the effect of the growing Imports of the product known
as lactose. The growth of imports of these articles has become of
increasing concern to me since my previous recommendation to you and
since your letter to the Tariff Commission of May 13, 1970.
In view of the foregoing, I recommend that you cause an immediate
investigation to be made by the United States Tariff Commission as to such
articles and that you direct the Tariff Commission to include said articles
within the scope of the investigation directed by your letter of May 13, 1970.
Furthermore, I determine and hereby report to you that, with respect to
the articles which were the subject of your letter to the Tariff Commission
of May 13, 1970, and the additional articles described in this letter, a
condition exists requiring emergency treatment of all such articles. I there-
fore recommend that you take immediate action, pursuant to Section 22 (b) ,
to impose limitations on the quantities of such articles which may be imported
in a quota year without awaiting the recommendations of the United States
Tariff Commission with respect to such articles.
Sincerely,
Secretary of Agriculture
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House Judiciary Committee staff
Retyped from indistinct original
776
m ivMOUA
H,R. HALDEMAN I'El'iORANDUM „ AUGUST 7 s 1970
Tin: v;i! i'i k
August 7, 1 9 7 C
MEMORANDUM FOR:
MR. COLSON
MR. DENT
MR. KLEIN
MR. MAGRUDER
As we develop our various outside projects, it becomes
obvious that a lack of coordination with regard to
financial resources has caused a n overburdening of
some potential resources, while totally neglecting others.
In order to remedy this situation, I propose that Chuck
Colson be placed in the position of coordinator for
contacting these individuals . This will prevent several of
you who have projects going at the same time from
approaching the same person and thereby decreasing the
effectiveness of our overall effort.
If there is a problem with this, get together with Chuck
and work out another solution, otherwise let’s consider
this standard operating procedure for the future.
L
r
/ HA IDEM.
H. R/ HALDEMAN
777
JEB MAGRUDER [MEMORANDUM, AUGUST 18 > 1970
Indistinct document retyped by
House Judiciary Committee staff .
August 18, 1970
MEMORANDUM FOR: . Mr. Hal deman
Mr. Klein
FROM: Jeb S. Magruder
With reference to your August 7 memorandum regarding better coordina-
tion of financial resources, I think it is an excellent idea to coordinate
this function in Chuck Colson’s shop. As you point out, it will eliminate
the embarrassment that comes when two White House staff members approach
the same person at the same time on two different projects.
There is, however, one point that should be noted; this office is charged
with the responsibility for advertising campaigns such as those relating
to ABM, the Gallup poll, and the anti-war amendments. I am assuming
that we will want to continue these projects when important issues develop.
I think we should be very careful in the use of these ads and that they
should only be done when they have direct, beneficial results to the
President. These projects run into considerable expenditure. Often we
will finance them by quick calls to potential donors, but since there
usually is little or no lead time, sometimes we get a project paid for and
sometimes not. Chuck would have the same problem; for example-, if on
Monday we determined that an ad had to run on Friday, Chuck would have
just a few days to find the right donor.
Therefore, I propose that we increase our fund at the RNC by $200,000
per year so that money will be on hand and available for projects such as
these. As you are aware, we have a fund of this type for mailing pur-
poses. The $200,000 figure is one I selected based on the relative pri-
orities within the Administration. Considering expenditures for many of
our activities, this figure would seem to be well within the limits for the
type of exposure the advertising could bring us if done correctly. This
will result in a more efficiently run advertising program and will eliminate
the frantic calls to donors when it is determined that such a project might
be undertaken.
Confidential
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House Judiciary Committee staff
778
JEB MAGRUDEB MEMORANDUM * AUGUST 18, 1970
- 2 -
Indistinct document retyped by I.
House Judiciary Committee staff i
This would also help prevent a problem that could easily develop in our
advertising efforts. It is becoming apparent that we have to become
much more careful in dealing with agencies than we have been. By fund-
ing through the RNC and using them as our "front" , we can be assured if
they are caught it would not have the same impact as it would if we ware
put in the same position.
JSM:RCO:ger
bees Mr. Colson
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779
CHARLES • COLSOE ME!'19RAHDUM\ WITH . ATTACHMENTS _
1 * Re: OPHJO 1W
X*
THE WHITE HOUSE
WAS HINGTON
Euewt f?*s
Ut6 ujith W6L?fl'M *Pa(
CONFIDENTIAL
MEMORANDUM FORr THE PRESIDENT
SUBJECT:
001292
Meeting. with officers of the. Associated
Milk Producers, Incorporated .
September 9, 1970
12:25 p.m. {10 minutes)
Oval Office
I.
II.
PURPOSE : Photo opportunity. }
A. Background : This open hour meeting was scheduled
so that a photograph could be taken for publicity
purposes. The Milk Producers had very much hoped
to- have you at their convention last weekend in Chicago^
Secretary Hardin represented you and ^understand
that you talked by phone with the Chief Executive,
Mr. Harold Nelson.
The Milk Producers have made very significant
contributions tp. various kev Senate races in which w e
are interested this Fall fan-oroximatelv S\50 , 000 in ~
total). T hey have also pledged S2 million to the 1972
campaign. ‘ ,
Participants : Mr. Harold S.. Nelson, General Manage?',
and David L. Parr, Special Assistant to the General
Manager, Associated Milk Producers, Incorporated,
and Charles Colson.
C. • Press Plan : .Ollie Atkins will take quick photographs
HI. TALKING POINTS:
A. It would be most helpful if you would toll Nelson and
Parr that yon are aware of their political simoart --
what they have already done this year to assist us and
what they are committed to do in the future. If they
780
CHARLES COLSON MEMQMyPUM*' -WITS ATTACHMENTS
Page 2
! realize that you are aware of what they axe doing, ;
it will strengthen very much my hand in dealing j
with them. i
t ■ - [ ■
1 would suggest that you tell them that you hope j
you can make some future convention and - that von
are sorry that you had to miss this one (according
to Cliff Hardin, the Chicago s tadium was full),
C* Tell them, as vou did on the ohone Saturday, that v on
adiJLkft gi elate
. at -some time in the near future to discuss farm prob lems-'
of particular interest to the dairymen. You might
also point out that Cliff Hardin has been a very vigorous
and effective advocate of their problems and needs .
(Hardin, on your behalf, announced at the convention
Saturday that the special milk program would be
funded for this fiscal year, a program we Had previously
j opposed).
001233
! L.'— ^ — ’
Charles W. Colson
781
Charles Colson Memorandum With Attachments
THE WHITE HOUSE
V/AjH ihgton
OPEN IlOoiV
Wednesday, September 9, 1970
12;C0 Noon
The President's Office
THE PRESIDENT:
s^vcnt No. I
12:00 p. m.
to
12:10 p.m.
001288
Dr. Kevin McCann
Dr. Kevin McCann*, who is an old friend of yours, will be thought into
your office for a brief visit with you. He will want to discuss with vo u
decision to take over the 'Presidency of the Freedom Foundation.
; r~
“Gift: RN Mint Medallion
* * * * * * *
Event No. 2
12;f0 p.m.
to
12;15 p. m.
Admiral E. P. Holmes, USN
* Supreme Allied Commander (NATO)
and
Commander in Chief, Atlantic (US)
General James D. Hughes
General Hughes will escort Admiral Holmes into your office for a brief
visit with you. The purpose of the Admiral's visit with you is to, £Ay,_2. —
jarewoll call since he is retiring in Septe mber.
Gift: - Presidential Vi*» Cl^sr*
782
Charles Colson Memorandum With Attachments
Z - ,
Open Hour " ‘ *
VT ednesday, September 9,
0
Miss Cathy S. Campbell
Alex Butterfield
}^ir. Butterfield will bring Cathy Campbell into your office for a
handshake ar.d a photograph with you. M iss C a m oh c ! I has b -nrt wo r V ?
(n »^e ft ecu r : H* f 1^? c - ret •' n r. Ip. h h r W S : »• >■* a but is rpgiff"'"w hjZZ
trn. to College to g BlCtwCl n ^ Q fp
£3-Z£LV£
her FSO cnoo rturvjt
Gift: Presidential Bow Pin
* *
. 001283
Event No. 4
2:20 o.m.
--"la ‘
12:25 p. m.
Seaman Patricia Sargent
SP 5 Brenda Davis
Sgt. Beverly Kilby
Sgt. Susan W est
Lt. Col. JohnR. Sayre
Major Leonard Rice
Major Jack Brennan
V
'r\ '■ r !
Major Brennan will escort the above group into your office.
The Misses Sargent. Davis , Kilby and West hold the title of Miss Militar y
are reore-scr.ting the<~r respective Services in g r. ar.nunl effor t
to pnmnraff e military personnel to exercise the? r voting resr>^r?*hiHtv-
.by voting absentee.
Gifts: Men: Presidential Key Chains -
Y/omen; Presidential Bow Pins
783
•*•>* ■ . K*' n' N»i !*
Charles Colson Memorandum with Attachments
" ■ •' " ^ hoJ*-:
- 3
j\: cdnc;,*l.ty, :
% ■ y-
liar old S. ^ulson, General Manager > *
^An^f>ci>tr'ri r>~ »>i.. -r *•'<? -
Davi4 L. j?arr» Special Assistant to General Manager
Mr* Charles Colson
Mr. Colson will escort Messrs. N c Is on end Parr into your office for a
handshake and a photograph with you. The ■Assnei.t.i* vilfc Prn^.ir.-.
organisation was formed in November of 1969 as the result of the merges
of various other farm groups, £ ' . •
Ss-d sipaA^!-*. Wm|v*
Gifts: Presidential Key Chain, p AftA ^ CdtSeVt _4f
* . *■
Event No. 6 001290
(?sf : ft*
12:35 p.m.
to
12:40 p.m.
,Mr. and Mrs. Charles H. Thomas
Dana Thomas ’■
Mr * arvd Mr?. Thom as.acd their six-ve p .r-oM d^njiMcr. Dana will be
brought into your office for a handshake and a photograph i!nth you.
My .* ThPPV.? vf? r y at. a pr e vious Ooen Hovr^nd wp.s^r.vTtrd b y
• return, with his d atyghter at some future dat e. ?*: .
Gifts: Mr. Thomas: Presidential Key Chain
Mrs. Thomas: Presidential Bow Pin
Dana Thomas: Apollo View -Mas ter
♦ •♦'••--’•a ' V‘ v * *
35-687 0 - 74 - 51
C>9
784
Charles Colson Memorandum With Attachments •«
Open Hour ...
* _ 4 - Wednesday, 'September 9, t
E.'cnt No. 7
12:40 p.m. Mr. Lynn Culver
to Mr. Neil Lewis
12:45 p.m. Mr. Burl Uohlen
Mr. Merlin Bulch
Mr. Earl Nixon
Mr. Robert Rudely (Sen. Mundt's Office),
The above-named group represents the “ Concerned Citizens of V
Dakota ” and will be brought into your office to present you
with petitions of support concerning your position in Soutneast .Asia —
Thcy have collected over 20.000 signatures.
Gifts: Presidential Tie Clasps
* * ‘ * * *
Event No. 8
Mrs. Marie Kittridge, Legislative Chairm an.
Gold Star Mothers . Inc.
Mrs. Elva Ney/man, Washington Representative
Mrs. Bettyann Funk
*-.12:45 p.m.
12:55 p.m.
001291
Thes e la d ies represent the or gan ization that sought court action to
P roh ibit th e New _ Mooe from pl acing the na mes of their deceased so ns
on placa rds during the demonstrations last November . During that
November week-end they held numerous press conferences and received
excellent publicity that wa s favorable to us. You wrote Mrs. Newman
a nd Mrs. Funk personal letters -of 'appreciation .
Gifts: Presidential Bow Pins
* * *’ * *
NOTE: Gllie Atkins will be present to photograph each of these
events.
CHARLES COLSON- MEMORANDUM. SEPTEMBER 15. 197 0
Indistinct document retyped by j
House Judiciary Committee staff I
1
SECRET September 15, 1970
MEMORANDUM FOR H. R. HALDEMAN
John Brown has advised me that there is some question over one of
the recommendations in Magruder's memo to you of the 18th regarding
outside funding. Let me attempt to clarify it in the following way.
1. I will coordinate, as you have directed, all outside funding activities
so that there will be one central point for soliciting money from our
friends for support-type activities. I have been doing this in recent
weeks .
2. Jeb recommends that a budget be established at the RNC of $200,000
per year which we can draw upon for urgent needs, especially when
we don’t have time to go out and solicit funds for a particular project.
Contrary to Jeb's memo, the RND [sic] should not be a M front." My idea |
of this is that they would simply pay bills, or better yet, funnel money
through outside organizations especially where there is no reporting
requirement. In other words, if we need a quick ad run by the Citizens
Committee for something or other, we would draw the money out of the
KNC budget and funnel it through the Citizens Committee. The idea
here is not to get the ENC publicly involved at all but simply to have
a kitty available.
3. I have arranged for a public relations firm here in town to do things
on our behalf. They handled much of the ABM effort financially and
also are subsidizing the overhead of Americans for Winning the Peace.
Some of our friends have retained this outfit and essentially this gives
them the financial resources to do things for us. Once this is fully
set up, we will have available through this resource about $100,000
a year. These funds can’t be used for direct media expenses because
these would not be deductible to the public relations firm. They can
be used, however, to put people on their payroll, pick up travel ex-
penses, mailing, editorial, graphic and other media preparation
expenses. That’s how we handled the ABM effort. This firm also
distributed material and worked with friendly columnists in getting
out anti-Heard material. They were exceedingly effective and pro-
vided a perfect cover for us.
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786
.. CHARLES COLSON MEMORANDUM. SEPTEMBER 15 x 1970
Indistinct document retyped by
House Judiciary Committee staff
If the foregoing resolves any questions in your mind, I will see that
this is implemented.
Charles W. Colson
cc: John Brown .
Jeb Magruder
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787
CHARLES COLSON MEMORANDUM, SEPTE14BER 16 , 1970 1 WITH ATTACHMENT
\ ^ Tj
September lo, 1970
HIGH PRIOIUTY - 5YSS ONLY
MEMOIbAHDUlv; FO-R JOHN I) SAN
A group that strongly backs us politically and financially haa raised
a question y/ith me as to whether or not the Corrupt Practices Act
precludes them from giving more than $5, 000 to a candidate-* Their
reading of the Act is that they cannot.
What they have is a trust arrangement patterned almost identically
after the COPS system. They collect ,many small contributions
from their members. The funds go into a trust and are then disbursed
by the trustees. I have told them that they can give up to the statutory
ceiling to any number of committees, but they react the statute, however
as putting a $5, 000 ceiling on any contributions, direct or indirect,
from any person or group ox persons to any individual candidate.
I took a quick look at the statute, but I don't v/ant to rely on my own
reading of it. I'd like an. authoritative answer. All I can say is, I
must be right and they must be wrong, because we know that in many
campaigns much more than §5, 000 has been, given to candidates by CGPJ
and others, and, of course, many of our contributors by using different
committees did much more iu 1$«S3 than $5,000. Can you get a quick
reading on this from Justice, because I am obligated to get back, by
phone this week to this group, and I do not want to keep 'hem hanging,
inasmuch as v/smeed their funds. \
001321
Charles W. Colson
^f/v -z v'J- ^ /
m
\k
788
CHARLES COLSON MEMORANDUM, SEPTEMBER W , 1970, WITH ATTACHMENT
Jo! in Du?.n s ays: " — - •
There is no limitation 021 the dollar amount under the Corrupt I > r:- cti ceS
Act when the distribution or contribution is given to state! or local co:r.mi
or an organization in the District of Columbia -- in other words , , there
no limitation*
789
ATTACHMENT TO CHARLES COLSON MEMORANDUM
Mr. Isliam said he had resolved this earlier
but appreciated your message* [
001320
\ : '
V t
790
'j CHARLES COLSON MEMORANDUM, NOVEMBER 2 3 1970 a . UITR ATTACHMENT
i
November 2, 1970
• •• ' ■ ■ i
MEMOSA NDUM FOR JACK GLEASON j
Would you please make come discreet inquiries about this?
Charles W. C olson
001397
791
Attachment to Charles Colson Memorandum, November 2
THE WASHINGTON POST
AT
Fund Aids 3
Unopposed in Election
By James R. Polk
•UmxIi'.bJ Press
A pluah political fund for
milk producers has made
$13,000 in campaign contribu
lions to the chairman of the
House Agriculture Committee
and two other farm congress-
meo who are unopposed for
re-election
The chairman. Hep. W. ft.
(Bob) Poage i DTex). unop-
posed in Tuesday's election
after 34 years in Congress, re-
ceived a $5,000 contribution
from the milk group, the
Trust for Agricultural Politi-
cal Education.
Two freshman members of
the Agriculture Committee
who also have no races :h:s
>ear. Rep. Edward Jones (O-
Tv-.~ • and Hep 3 -1 \lcxan-
Cor O \rx • x ,1 - : > ;-. v !c
cor.tr. cut. nr s
SK0,C5d in fund
M.!k Is buoye.i b- r.
merit pf-ce So.:,' rts 1
Tri.»: f„r Ayr:- oitural •
i ll En.:t at. ->r. s a :i *■
; jrv.pamr. fund .ucr '.- a
u-.th $4 :0 Oo r
fiuin Jairy farn.i . a;.- - ..: he
r.aiion
About h.t.f ‘>f ' c
campaign i.a* .no i-
thcr to • >«-!•- a: ■ .-j- r> r.
rural states : , cl.\:.-.r-
vclvmg Htiufe Air.r..
Cc.Tm.ttee r-'mhfi 3
Prige .» i .t M'ti..- 1 p
pCsi'd IfC'UM* . r ;: : . m
;.-.g from ji. -.-.a:
grv.. i this year I A. . -
' .10 Sf3. -J ’ ;l« V . < > cii
SJ.'li'e tn.rouih a - n..-.-.
e raising brdy 3 e;
Poage listed the So, 000 tn h.s
pre-election report filed with
Congress this week and indi-
cated the money has been left
on deposit in a special cam-
paign bank account in Waco.
Tex.
The trust gaie S2 /aC' to
Jones this summer and g Mtai
of $6,000 to Alexander user
the past year and a half. .All
three committee members
were unopposed in .their sum-
mer primaries as weil as Tues-
day \s general e-cctiohs.
Set l'|> l.ast Year
The- campaign fund. :s-eJ
in San Antonio, Tex, was set
up last year by officials t.ej to
Assoc, a ted Milk Producers
Inc. That organ! zat ion's curr.p-
ir-.'Ar. itorn't il Sr.vr
::r.’«ur- a.-..! «- .c . :
■li.
in? : . -j-:
-n'.-.b :t.o.-.\ : ■> f..-m .An
. .— .e:i : r. h- i a i >
:. In- iai.t whir.
-.'.op. a-*.!
talk-":,
didn t
locked m close races this fall : J
Rep’s. Watkins AbbitL iD-Va.i,'
John M etcher (D-Mom » and
(Trad am Purcell 'D-Tex.).
Challengers Aided
Not ail money went to in- ;
curr.fcents. The trust gave >
So.C’OO to James R. 'Jones a for- ;
mer White House aide . in i;
Tulsa. Okla . trying to unseat j
tne top-ranking Republican on|
the Agriculture Committee,:;
Rep Pare Belcher. But it also;';
gave $5.C-00 to Beichera re-'
election campaign. I.
At the same time, the trust .
lave -anoiner $5 000 each to 1
GOP chailvr.gers trying to.
capture Senate sens held by-
Democrats ■.?. Florida. Indiana, j
New Jersey. North -flakota.i
Tennessee. Utah, and Wyo- :
But the trust hedged some'!
In addition to $5,000 for th? -
Republican in Indiana, ;-t gave'
53.500 to incumbent Demo-,
■trat.v Sen Vance Hartke. It :
I'ifi made a double donation'
m W;. umir.. with 32, COO for
: n. u ntb'.'-nt Fen, Gale McGee. .
I sham explained. "We hopt' ‘
to hate a friend r.o matter-
w ns eh ore i< up ther* in Wash ,
tv. a -l ■ : .r. <* :
I -.r.. r-_- a- .
r.v-.v re tr.c pC . .
f , : .... car< ‘ J .-.it .• . ;
\ ■ \ a ruler. w h.. «■* . •-
: : t C;.n_- .. ; r '
a: - ..- ; am:<aig:i r<nt: .tit'
'•c th-.s > ear. » :u : r ■ •
b-- fi.'.snpd iTnril.j'-''-.
vr-rv.
, 1970
cantp'j,
792
CHARLES COLSON MEMORANDUM ; N0VE14BEP 3 2970
67
November 3, 1970
MEMORANDUM FOR MURRAY CHOTINER
Would you, please check with your friend, Harrison, and tell him i£
he wants to play both sides, that's one game; if he wants to play our
side, it is entirely different. This will be a good way for you to
condition, him before v/e put the screws to him on imports, which,
we are about to do. * ....
I . ' i
001325 - '
| Charles W. Colson
.Co: Henry CaGhen
35-687 1921
793
CHARLES COLSON MEMORANDUM , DECEMBER 18, 1970
File with
Dairy
Imports —
December 18, 1970
MEMORANDUM FOR MURRAY CHOTINER
Your friends, Harrison and Hillings, have just about run out of string
with Henry Cashen and me. They are personally abusive particularly
Harrison -*• not only to the two of us but to the secretaries in this office
and they are making impossible demands. They continually go around
us. They have told us that we cannot under any circumstances talk to
their principals. Their clients, of course, continue to call us and in
an effort to be helpful to Harrison and Hillings we refuse to take the
calls.
They have so muddled up the present dairy import situation that I
almost think there is no way that we can help them. It is, believe me,
an incredible situation. I practiced law for ten years in this city and
wouldn’t think of treating a messenger from GSA the way these guys
think they can order the White House around. Frankly, in view of the
relationship with the dairy industry that is involved, I think that these
guys are simply too dangerous to deal with and that they should either
be put in their place or cut out of the act altogether. They have also
refused to help recently in a matter of great importance to us. In
sum, they are very, very bad news.
Unless the situation can be straightened out , I intend to talk to the
dairymen directly with the Secretary of Agriculture and simply let
them know that we will deal with them on any problems but that we
cannot deal with their lawyers — or at least in the way in which their
lawyers have been acting.
Indistinct document retyped by
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Charles W. Colson
bcc: Henry Cashen
Indistinct document retyped by
House Judiciary Committee staff
794
DAVID PARKER MEMORANDUM. FEBRUARY 2. 1971
Indistinct document retyped by
House Judiciary Committee Staff
THE WHITE HOUSE
WASHINGTON
February 2, 1971
MEMORANDUM FOR:
FROM:
RE:
* > Chuck Cola on
John Whitaker
Dumb Parker
Leaders of dairy Industry
Secretary Hardin has put forth a proposal
fceet with the various national leaders of
What would be your rec u M ui n dation in this
Approve
Disapprove
that the President
the dairy industry,
regard?
The President said he vented to
do this — and should — I should
be Included in the meeting for
special political reasons
Indistinct document retyped by
House Judiciary Committee staff
reason; .
Thanks.
795
DAVID PARKER MEMORANDUM. FEBRUARY 4, 1971
Indistinct document retyped by ■
House Judiciary Committee staff
MEMORANDUM
THE WHITE HOUSE
Washington
February 4, 1971
MEMORANDUM FOR JOHN EHRIICHMAN
FROM: Dave Parker
RE: Leaders of Dairy Industry
Secretary Hardin has sent a memo concerning the Presi-
dent’s expressed interest in meeting with leaders of the
dairy industry (attached) . Colson and Whitaker strongly
recommend the President meet with the group on the attached
list.
Do you concur? No objecti on
THE WHITE HOUSE
Washington
Date: 1/27/71
To: C
From: Bruce Kehrli
H has not seen -
Please handle
B.
Indistinct document retyped by
House Judiciary Committee staff
796
DAVID PARKER SCHEDULE PROPOSAL > FEBRUARY 16, 1971
O
(j ^
001130
THE V/ HITE HOUSE
February 16, 1971
SCHEDULE PROPOSAL
FROM: David N. Parker
VIA: Dwight L. Chap!?*!
y
MEETING : Leaders of the dairy industry
DATE: onen
PURPOSE : To enhance agriculture’s support of Administration
programs; and, because the President said he wanted tp;do this in his
telephone message to the American Milk Producers Conference last
September, as well as when meeting with Messrs. Nelson and Parr he
stated he would meet with the leaders again*.
PRESIDENTIAL PARTICIPATION
-Cabinet Room
-ltt ar.r.enmng mst atrarh«rt»-nni« .s P <»r^arv »-♦
-half hour meeting
approve
Coverage:
To be announced
Photo opportunity
STAFF : John V.'hitaker
RECOMMENDATIONS
disapprove
- a pp r oy c/^. dis approve ~
appr o v e_ '.^C-dTsapp rove
In Favor
Chuck Colson
John Ehrlichman
Murray Chotincr
Secretary Hardin
John V.'hitaker
Colson - "The President said he wanted to do this and should*’.
DAVID PARKER SCHEDULE PROPOSAL A FEBRUARY 16, 1971 1
Page Two
Daiiy Industry
Chotiner - ’’Substantial support coming from this group”.
Whitaker - ,5 Thc President committed himself”.
BACKGROUND: Secretary Hardin, urges this meeting be held. He
says that last fall at the time of the convention of the Associated 'vlilk
Producers, he talked with the President on the phone and the President
extended an invitation to key members of the dairy industry to meet
with him. > _
FOLLOW UP:
Colson says the Dairy industry has a good PR. program and this meetin
will be exploited widely in the dairy industry.
Hi-
001191
798
GARY SERVERS MEMORANDUM, MARCH 3, 1971
Mr. McCracken u Mr. Koiiihekker
3/3/7L .
Gary Sesvero
Dairy Price Support
001071 ;
This Is Dairy Y.'eek la Washington!
The prime issue today is the price support level for manufacturing
milk. The Department of Agriculture phoned this morning us be aid they
were sending materials to C1£A -GM3 that recommended the same
support level for the marketing year beginning April 1, 1-71 aatthe present
year. They are also recommending a lower support for batter, -offset
by a. higher support for nonfat dry milk, in order to bring relative prices
of the supported dairy products more in lino with their market demand:.
•Agriculture wants to make an announcement later today. Their-
reason for not following the 10-day rule is that this particular .issue Is
so politically-charged that even to circulate papers and allow them to
"ferment" would generate intense pcliticrd pressure. After participating
la the cheese import Issue which is subject to the came political; forces, X
agree v/ith Agriculture's strategy..
Should v.-e support Agriculture's Recommendation
The dairy support level has been raised as follows la recent years;
£E
2r 100 lbs*
Percent o!
1965
$3.2-4
75
1966
4.00
S9
1967 .
| 4.00
87
1968
A. 23
C9
1969
4.ZS
83
1970
4.66
85
1971 (recommendation)
4. 60
£0
tLegal range: 75-90 percent
There is no economic case for raising the support k: 3.071. Dairy
production is rising in response to higher prices while consumption in
799
GARY SEEVERS MEMORANDUM, MARCH Z, 1971
2
. lagging; the Commodity Credit Corporation, is purchasing more dairy
j products to support prices and the high domestic prices have encouraged ‘
imports to grow despite the restrictive quotas on many types of dairy imports
' While it would be consistent with the Council’s position on. aori cultural,
policy to advocate a lower price support, the best that can b unhoped for in
this situation is to hold the line. IX the support price is raised, it will bo
directly reflected ia consumer prices Xor dairy products alter -April 1*
Courses of Action QQ107<4
1* Refuse to respond on such short notico.
2. Respond directly to Agriculture (probably call Secretax^y Hardin;
3. Respond to OMB (probably call Shultn who is directly Involved
in this issue and givefhirn our position or ask to participate in
the final decision).
I would recommend that we join Agriculture and CM3 (I believe they
will agree on $d« 66) on this issue. A unified position by tbs three agencies
could have a chance to olfsefc the political pressure for raising the support
price. j
cc: H3
v SJ
35-687 0 - 74 - 52
800
' DONALD RICE MEMORANDUM, MARCH 4, 1971
OceCUTIVE OFFICE Or THE PrOlQENT
OFFICE OF MANAGEMENT AMO BUDGET
WAS1IINCTOM. O C. 20SUi
March 4, 1971
MEMORANDUM FOR MR. SHULTZ
MR. EtIRLICHMAN
SUBJECT: Decisions on Dairy Problems
Dairy interests are pressuring the Administration for
action on three related issues. To a certain extent, we
have been treating these questions separately. They should
be decided as a package.
The three issues are:
— do we restrict imports of cheeses above 47 £
per pound (price-break cheese) ;
— do we raise the price support level for milk
001^0' from $4.66 to $5.05 per hundredweight;
— .do we have Agriculture purchase large
quantities of cheese for the school lunch
and commodity distribution programs.
These three issues are related because an increase in the
support price would mean higher prices and larger pro-
duction which could only be sustained through increased
Government purchases and import controls on foreign
. _ supply. Alternatively, we could think about the inter-
Sn/iS relationships in reverse sequence. Controlling imports
(supply) and increasing purchases (demand) will increase
market prices which in turn would allow dairy interests
to argue that support prices could be increased without
increasing budget costs. Thus, raising the milk price
support level aggravates the cheese import problem. Indeed
cheese import problems have already been exacerbated by
last year's price support increase. Even so, imports of
dairy products renresenf n von/ wall proportion of dairy
business in the U.b. ccmx<-ruu uj u-.nr.y other sectors of
our economy.
801
DONALD RICE MEMORANDUM, MARCH 4, 1971
2
If we accede to the daily interests on these three
■tissues, the result would be higher budget costs, increas ed
production and surpluses of mil's products (see table). ’-rue
year at this time the President would surely be faced with a
choice between even larger surpluses or a decrease in. the
support price, an unhappy choice in an election year. In
addition, such a combination of actions would most likely
lead to retaliation against U.S. agricultural exports.
This could bring lower farm income and larger surpluses
in non-dairy commodities as well.
FY71
$4.66
spt . Price
FY72
$4.66 $5.05
spt. price sot, or.
CCC purchases 6.7
(bil. lbs.)
Budget costs $380
(mil $)
001203
Budget Proposed
6.5 7.8
$390 $500+
Budget Proposed
Cost of cheese
purchases
$10
Dairy farm income is now at an a 11- time. high of $6.5
billion and is projected to rise to $6.6 billion next year
-with no change in the milk price support level. Last year's
price support increase was the largest ever (budget cost of
$100 million per year) . Further increases this year would
not only lead to surpluses and an unhappy political choice
next year, but would be inflationary and probably r.ot even
be in the dairymen's best interest when the need to develop
export and domestic markets is taken into account. Dairy
interests are by no means of one mind on these issues.
Some believe a price increase now would greatly depress
demand for products for which substitutes exist. For
example, I understand Rep. Quie (a dairy farmer himself)
strongly opposes an increase ir. the price support level at
this time.
802
DONALD RICE MEMORANDUM , MARCH 4, 1971
3
The proposed cheese purchases would increase budget
cos fee by $10 million in FY 71 and $39 million in FY 72 (sta-
table) . Agriculture (believing the White House wanted it)
has already announced that $G million (unbudgeted) werth of
cheese would be distributed in FT 71. This will be th.e
first distribution of choose for the school lunch program
in 16 months. All cheese purchased through the price support
program has been distributed to needy families. The states
have purchased large quantities of cheese for school lunches.
The amount proposed for federal purchase in FT 72 (unbudgsted)
is about double what the states have been buying.
Secretary Hardin strongly urges holding the line on the
price support level. He wants to announce this position as
soon as possible but wants Presidential approval first. He
also proposes simultaneously announcing the purchase of.
cheese for the school lunch program and an intent to purchase
"substantial quantities" in the future. He clearly feels
under pressure, partly from the White House, to include the
quoted language.
Pete Peterson has been working on the price-break cheese
-problem. He may support the recommendation of the Task Force
on Agricultural Trade that the President direct the Tariff
Commission to investigate this problem. I understand he has
soma wrinkles to his proposal with which I am not fully
familiar. Perhaps those features would reduce the likelihood
that the Tariff Commission recommendations will force the
President into protectionist action's.
i ±- recommend that we package up the following for
i announcement as soon as possible;
1. holding the line on the price support level.
001203
2. purchasing moderate quantities of cheese
for this year’s school lunch program but
with no commitment to large future purchases,
3. directing the Tariff 'Commission to study the
price-tore a.- chess r r-mport problem.
803
DONALD RICE MEMORANDUM. MARCH 4. 1971
Hyde Murray 'believes that this package would be quite —
satisfactory to Representatives Poage ar.d Belcher. Clarence
Palmby believes strongly that it would satisfy Wilbur Mills.
John Whitaker concurs.
If at all possible the announcement should be trade late
ifi the day Friday or first thing Monday to minimize any
appearance of manipulation of commodity markets (the Green
Bay cheese market is open Friday only) .
Donald B. Rice
Assistant Director
804
/
/
00120^
ROUTING MEMORANDUM ATTACHED TO DONALD RICE MEMORANDUM \
2-3
V
JCW:
Ehrlichman thinks something should
be done about this today. Tod wants
to know if you are, o r want to he,
involved in it. He would like your
805
2-7
Washington
March 5, 1971
MEMORANDUM FOR: JOHN EHRLICHMAN
GEORGE SHULTZ
FROM: CLARK MacGREGOR
001217 -
SUBJECT: Discussion on Dairy Problems
X have before me Don Rice’s four-page memo to Messrs. Shultz and
Ehrlichman dated March 4th. At the bottom of Page 2 Don Rice states
that Representative Al Quie (R-Minn) "strongly opposes an increase
in the price support level at this time. " This is not correct . On the
basis of several personal conversations, the latest being late yesterday,
what is correct is that Al Quie does not feel that it is necessary or
advisable not to announce support levels at 85% of parity. Al Quie
would be seriously embarrassed in his district were it to become known
that he strongly opposes the 85% position taken by Speaker Albert and
Congressmen Mills and Byrnes. What Al said to me was, "The Land
Q'Lakes position is a sound one, but I am not saying that for publication. *
- On Page 4 of the Rice meirxo it is stated, "Clarence Palmby believes
strongly that it [the Rice-recommended package] would satisfy Wilbur
Mills. " This is not correct. Wilbur Mills has urged me more than a
half a dozen times in the last three weeks to urge the President to
announce the 85% of parity price support level; the latest Mills appeal to
' •me was by phone late in the afternoon of March 4th.
cc: Don Rice
Pete Peterson
John Whitaker
_CLARK MacGBEGOR MEMORANDUM , MARCH 5. 1971
the white nousi;
35-687 1937
806
DONALD RICE MEMORANDUM t MARCH 5 , 1971 , ATTACHMENT
XECUTIVE OFFICE OF THE PR. /.DENT
O.' FICE OF MANAGEMENT ANU £J!JCGET
WASHINGTON. D.C. 20503
-J b k *n -
12 £>
2-!arch 5, 1971
200
kekokakdui-: fop. hr. shultz
SUBJECT: Further Information on Dairy Problems
i
As you requested, the enclosed table displays price
"support levels, parity rates, budget costs and CCC purchases-.
The table also shows the rising trend of dairy farm income.
Even if the President decides to delay action at this
time on cheese imports so that this question can.be handled
as part of a broader policy on international trade, I
recommcnd_no increase^ in the milk price sup port level t his
year. Increased purchases of cneese should’ be enough to
"give the dairymen this year. - My reasons are detailed below.
— As the enclosed table indicates, dairy farm
income is at an all-time high and rising. .Income is
not directly related to the parity rate. Parity
dropped from 89% in 1968 to 83% in 1969 while income'
rose as shewn in the table. Last year's increase to
85% parity brought about an even greater spurt in
gross income. Met income figures for 1970 are r.ofc.\
available but will certainly show a substantial increase
— Another increase this year on top of last
year's large increase would be contrary to the
Administration’s policy of greater reliance on ex-
panding markets to provide the basic underpinning to
farm income. Consumption per capita has been declining.
Another increase this year would accelerate that trend.
— According to Hyde Murray, there are responsible
voices in the dairy business who do not want an increase
this year; for example, the Badger Co-op in Wisconsin
and Land o' Lakes Co-op in Minnesota, two large
independents , oppose an increase. So does the Farm
that would be most directly affected.
oe 1
807
DONALD BICE MEMORANDUM, MARCH 5, 1971, WITH ATTACHMENT
" 2
— Production response to higher dairy prices
tahes .time. The full effects of last year's increase
have not yet been seen. Therefore, there is sorts
likelihood that any price increase this year. will face
the President with a choice next year of, at test,
being forced to hold the line or, at worst, having to.
reduce the price support level.
— The heavy pressure "for an increase 'is coming ■
from the Associated M ilk Pr oducer s. Inc. This is a
near-cartel formed by merging about 60 smaller co-ops
into 8 larger ones. This organization is ijrying to
control supply and administer prices, particularly of
fluid milk for home consumption . -They restrict supply
by operating their own processing plants which can
convert fluid milk to butter, non-fat dry milk, or
cheese (for sale to the CCC if necessary) thus propping
up the price of fluid milk. A price support increase
would reward AMPI activities. ' I understand that the
FTC and Justice are taking a hard look at this situat.ic
001201 "
— A small increase in the price support level
would not, mollify the AMPI. It would be seen as token:
We have to make 'up our mind whether we want' .to rely on
markets for more farm income or else make a -big enough
increase in price supports to have a real affect on
income.
— Any increase in the price support level will
increase consumer prices for dairy products-, attract
imports and exacerbate the price-break cheese problem.
— Parity is driven by the prices farmers pay,
without an offset for productivity. After last year's
big price support increase, it’s time to share some of
the fruits of productivity gains with consumers.
A price support increase 'would cause higher
budget costs and greater surpluses as shown in the
enclosed table.
808
DONALD RI CE MEMORANDUM, MARCH 5. 1971 , WITH ATTACHMENT
3
If at all possible, the decision should be made in rime
to be announced first thing Monday as to resolve the
matter before the AMPJ campaign builds any bigger head of
steam than it already has.
Donald B. Rice
■ Assistant Director
P.S. For your information, the price of cheeseThas risen
4-5$ a pound (8-105S) in the last three weeks in response
to the speculation and announcements about larger. Government
cheese purchases. I
i 1
I |
cc: Mr. Ehrlichman
Mr. Peterson
Mr. MacGregor
Mr. Whitaker
001202
809
3 ATTACHME11T TO DONALD RICE MEMORANDUM
SCHEDULE Or PRICE SUPPORT tEVELS AND COSTS
Price
Support
Level
$4.52 per CV.1
$4.66
$4.75
I $4.85
I $4.92
$5105
I $5.21
Paritv
00 12° 3
7 3 . G 9
80.5
82.0
83.3
85.0
87.2
90.0
Budget
' Cost
$280 nil
$336
$415
$430
$445.
$500
$595
,ccc
Pure!
4.6
6.-5
6.3
7.0
7.2
7.8
9;4
dairy income
1968
1969
1970
1971
Gross
Income
$6.0 bil
$ 6.2
$6.5 .
$ 6.6 *
Net IncoSa
Per Dairj;
Farm '
$15,700
$17,4007
N/A .
N/A ,
';* projected at $4.66 price support level
810
JOHN WHITAKER MEMORANDUM, MARCH S. 1971
f
T' ^
Recommendation -- stick with Rice's
recommendation. We could raise the price
and prices fall from over supply then v/e would
have to cut price support in '72 and be in real
• trouble. Let's stick where we are and see
what happens to the parity % for this year.
I've given Hyde Murray Senator Miller
position — he doesn't buy it either and agrees with
Rice's recommendation.
JCW
■ /
/y.
■ \ i
THE WHITE HOUSE
WASHINGTON
001216
811
001214
JOHN miTAKER MEMORANDUM. MARCH 5, 1971
2- <
• Os
/ /
The 'White House
wfmnero*.
£)ate : V? J SJ
/ "
TO: N. /
FROM: JOHN C. WHITAKER
/O' ' -
/Ifcos* o/Vo* f
'"aJU ^ .
/U> C^>' ' /
fa'll*
812
00121 ^
JOHN WHITAKER l^EMORANVm a MARCH 5 , 1971
^ Oi_
^ y^ r
, t C- / ✓
^ ^
StO&iZ' T •
;/ . / rt.*r is&i&ty , _.
'i ^fr^J-***-** -
^M*.*** •?*#
ft (f?f" .
813
CLARK MaoGREGOE MEMORANDUM, MARCHS, 1971, 1-2
Indistinct document retyped by
House Judiciary Committee staff
THE WHITE HOUSE
Washington
March 5, 1971
MEMORANDUM FOR: JOHN EHRLICHMAN
GEORGE SHULTZ
FROM: CLARK MacGREGOR
SUBJECT: Dairy Price Supports
Senator Jack Miller (R-Iowa) , the ranking Minority member of the Senate
Committee on Agriculture and Forestry, participated in a Roosevelt Room
discussion at 10:00 a.m. this morning on the President’s special revenue
sharing proposal for rural development. I sat next to him. The following
three memos passed between us, with Jack Miller initiating the action:
I) 1. "Clark: It would be a political mistake to do nothing
(re: the dairy price support question) this year and
then do something in 1972 — an election year. The
dairy organizations would see through this, and so
would the Democrats, and they would make hay by
calling attention to the Administration playing politics
with the dairy farmer.
2. "Better to do something this year and something in
1972 (though less in 1972 than would be the case if
nothing done in 1971) .
3. "Drop in parity price support from 85% to 81% represents
cost-price squeeze which we ought to try to handle — at
the very least take action to prevent further drop in the
parity ratio over next 12 months.- Jack Miller"
II) "Jack: Do you recommend that the President and Cliff Hardin
announce that on April 1st the support price will be 81% of
parity? Clark"
Indistinct document retyped by
House Judiciary Committee staff
814
CLARK MacGREGOR MEMORANDUM, MARCH 5, 1971, 1-2
Indistinct document retyped by
House Judiciary Committee staff
Page 2
Memorandum for: John Ehrlichman and George Shultz
March 5, 1971
III) " Clark : 82% would sound better. Those working for 90%
don't expect it. Many of them fall back to 85% (like they
got last year) — • but they should know that this costs $100
million more to the government. So some of them have
suggested at rock bottom holding prices so that there will
not be further deterioration in parity. Jack Miller M
cc: Don Rice
Pete Peterson
John Whitaker
815
BILL GIFFORD MEMORANDUM, MARCH 9 , 1971
Indistinct document retyped by
House_J udiciary Committee staff
THE WHITE HOUSE
Washington
March 9, 1971
MEMORANDUM FOR THE DIRECTOR
Hyde Murray has recommended that the Administration
maintain the status quo with respect to dairy price
supports. He is supported in this view by other
House Republican staffers who are less informed on
the subject.
They suggest that if the Administration agrees to
the suggestions of the House Democratic leadership
that price supports be increased, there could be
very much increased dairy surpluses during the
election year. This would create a difficult
political issue.
Hyde Murray makes this recommendation with which I
concur:
1. Do not increase price supports.
2. Refer the question of cheese imports to the
Tariff Commission.
3. Announce the purchase of cheese for school
lunch programs .
Following this recommendation would put the Administra-
tion in the best position during the coming election
year.
Bill Gifford
Indistinct document retyped by
House Judiciary Committee staff
35-687 O - 74 - 53
816
CHARLES COLSON MEMORANDUM. MARCH 10. 1371. WITH ATTACHMENT
THE WHITE HOUSE
WASHINGTON
KYES OMLY
r- ■■ >
A ■
March 10,
1971
MEMORANDUM
FROM:
FOR JOHN EHPvLICIIMAN
CHARLES V,'. COLSON','
y
My reasons for believing that we should take affirmative action on
cheese imports at the same time parity levels are announced arc as
follows:
1. The obvious political support we discussed.
[301301
2. There is deep and gro\ying discnchantm’ent in the farm belt. The
dairy segment has been one that has been with us. A negative parity-
decision and negative imports decision will have severe repercussions
3. The leaders of the dairy industry can "sell 11 to the farmers no increase
in parity if they can say that the importation of milk substitutes, like
cheese, will be controlled.
4. Merely saying that it is going to the Tariff Commission will be recog-
nized as a stall giving our people no handle to use with the farmers.
5. Qn the merits this is not the typical trade problem. Historically, in
the statutes and government actions, the government has always tried
to bar imports of products that arc subject to agricultural price suppo:
inasmuch as free importation would result in the U.S. merely support-
ing the world market; Kcncc, this would not be a trade action but rathe
an action to preserve the integrity of the price support program.
There was some reason for the dairy industry to believe last December
that Hardin would ask for an emergency proclamation on dairy- imports.
If wc do not take decisive action and keep present parity levels, we arc
going to catch a lot of political hell. Later action on the imports, which
will have to conic, probably will not then be enough to undo the damage to
our political posture; wc will be under more pressure than ever to increa
parity later; lienee, a blocking action now could be a lot less painful than
trying to repair the damage latex-. This is one on which wc should take tl:
long view.
' ATTACHMENT TO CHARLES COLSON MEMORANDUM
-rarl ich:;; an would Lib. a you to
Xoo’: C; L thin and ‘clicn talk with
hi i:\ about it. \
001300
818
. JOHN WHITAKER mmPMDVH , MARCH 19 , 1971
\
A
001229
THE WHITE HOUSE
■ WASHINGTON
March 19, 1971
, /-
MEMORANDUM FOR JOHN D. EHRLICHMAN r
/ It- ' X
FROM: John C. Whitaker
SUBJECT: Suggested Meeting with Secretary Hardin
V'
I think we should have a prompt meeting with. Secretary Hardin today.
The prime issue is milk price supports. Contrary to what I reported in the
7:30 meeting this morning on a House count they did last night/ Hardin is
convinced there is a 90 percent chance that an 85 percent of parity price
support for milk bill, sponsored by Carl Albert, will pass Congress. The
issue is, if it passes, does the President veto it. Currently, we are
playing a bluff game with the dairy people saying the President will have
to veto a milk price increase and get credit on the consumer side, but
Hardin doesn't think it will stop the bill from passing. He is now of the
opinion that when the dairy meeting takes place with the President next
Tuesday, the President should allow himself to be won over and go along
with the argument of raising the price of milk to S5 percent of parity.
This is the key issue and I think you, Shultz, Rice, Colson and I should
discuss it with Secretary Hardin.
A secondary reason for the meeting is that Hardin is still hard on the idea
that the extension service in some way should be held harmless in the
rural revenue sharing bill. He is convinced we can never sell the bill
without protecting the extension service, and that by protecting the extension
service, we have enough votes to get those people working for us and pass
the bill. He said he discussed it with the President, although only briefly
in a reception line, and as predicted, the President said, "If you think that
is what we ought to do, then we ought to go ahead. 11 The Secretary
recognizes that the game isn't played this way and wants an honest aiscussio
with us about it.
George Shultz
Don R.icc
Chuck Colson
M A
L
-t/l cn
819
GEORGE SHULTZ MEMORANDUM, MARCH 20 M 1971
Indistinct document retyped by
House Judiciary Committee staff
March 20, 1971
MEMORANDUM FOR THE STAFF SECRETARY
Subject: Report on the President’s Meeting with
Secretary Connally, Dr. Bums, Mr. Shultz
and Dr. McCracken on March 5 at 11:00 a.m.
The following items were discussed:
1) Paul McCracken reported on the economy and noted that the
employment picture was mixed despite the decline in February in
unemployment. The President insisted on the importance of not
expressing a lack of confidence. Arthur Burns took issue with
the President on the grounds that too much confidence talk would
present a lack of credibility. The President responded that the
situation was parallel to the war and the drive of the press to
see to it that we do not succeed and argued that confidence
would help the economy up, particularly since we are doing the
right thing and believe that the substance of the situation is
good.
2) Arthur Bums expressed his objections to public criticism by
Administration officials of the Federal Reserve. The President
pointed out that the Fed criticizes the Administration on every
side and that we can’t have a one-way street. He also reminded
Dr. Burns of developments in 1967 when Bums and the President
were both trying to get the Federal Reserve to loosen up on money
because of the Very soft economic situation, and Bums' dis-
satisfaction at that time with the way the Federal Reserve was
behaving.
3) John Connally made the point to Bums that there was a need
to drive interest rates down further especially insofar as indi-
viduals and small firms are concerned. Bums pointed out that
the corporate rate has lately gone up about a percentage point
as a result of the fact that lower interest rates were attracting
a large volume of corporate offerings. He agreed with Connally
that interest rates would probably go lower and that it would be
important to say so. He said that he would say so in his testi-
mony next week.
Indistinct document retyped by
House Judiciary Committee staff
820
GEORGE SHULTZ MEMORANDUM , MARCH 20, 1971
Indistinct document retyped by
House Judiciary Committee staff
4) Connally brought up the problem of the DuPont brokerage
firm. All agreed that a strong effort should be made to keep
the firm from going bankrupt. Burns remarked that much reform
was needed but that this was not the time for it since a failure
of a firm of this size would weaken confidence in the economy.
5) The President noted the importance of having a Domestic
Council committee on the subject of antitrust laws and emphasized
his view of the importance of allowing companies to merge or be
acquired if that was a way of saving them.
6) There was also a discussion of dairy prices and the strong
pressure to raise dairy prices coming from the dairy lobby.
Burns argued strongly for doing everything possible to keep the
o;ices from rising insofar as the consumer is concerned.
7) With regard to the Lockheed problem, Connally noted that the
British proposal recently made to Lockheed was not acceptable
but that negotiations between Lockheed and the British were con-
tinuing. Connally was maintaining a flow of information but not
taking any government position in the situation. He also noted
the possibility of a McDonnell Douglas takeover of Lockheed,
giving his opinion that this would help salvage the situation
that occurred.
8) The President spoke about the need to pay more attention to
the problems of the airlines. He noted that many in the Adminis-
tration are working on it but all have many other things to do
and raised the possibility of an outsider with high prestige
being brought in to spend fulltime for a few months helping get
the situation straightened out. He mentioned the names of
Tom Dewey, Bert Gross, Bob Tyson, Penlo Smith, Walter Thayer,
and Fred Dormer. Shultz was given the assignment of developing
some recommendations on what to do and how to do it.
"Signed and Mailed"
George P. Shultz
Indistinct document retyped by
House Judiciary Committee staff
821
WHITAKER MEMORANDUM MARCH 22. 1971. Wmi ATTACHMEIJTS.
THE WHITE HOUSE
001234
March 22, 1971
MEMORANDUM FOR THE PRESIDENT
SUBJECT: Meeting with IS Key Dairy Industry Personnel ^
yVssociatcd'Milk Producers, Inc.}
Cabinet Room ’ rp
Tuesday, March 23
10:30 a.m. (pDininutes)
I. PURPOSE: To hear their views on recent decisions by the Adminis-
tration on dairy products.
11 . BACKGROUND:
The dairy lobby has become very strong -- a very large Cooperative
organized labor, to spend a lot of political money. Pat Hillings and
Murray Chotiner, for example, are involved.
By April 1 each year, the Department of Agriculture announces their
decision on milk price supports. The lobbying (Senators .Miller and
Curtis, Speaker Carl Albert, Wilbur Mills, etc.) has been intense-this
year. On March 12, you approved the recommendation of Secretary
Hardin, George Shultz, John Ehrlichman and Pete Peterson, and USDA
announced a three -part package to:
' 2 1* Hold the support price for manufactured milk -at S4. 66 .per. *hitndt k e<
weight for the 1971-72 marketing ‘year beginning April 1, 1971, (this is
now about 80. 5% of parity). The lobby wanted $3. 05 per hundred weight
which would be about 87. 2% of parity. The Administration was concerned
that further increases in the price of milk (increased $.33 or 9% last year
would result in over production, plus a possible penny-per-quart increase
in the price of milk;
2. USDA announced purchase of cheese* for the USDA food (school
lunch) program;
m
NOTE: TEE INDISTINCT STAMP MARK IE THE UPPER RIGHT CORNER OF PAGE
QBE STATES j "THE PRESIDENT HAS SEEN THIS. " !
JOHN WHITAKER MEMORANDUM, MARCH 82, 1971 , WITH ATTACHMENTS
- 2 -
3. USDA noted that you directed the Tariff Commis sion to conduct
an immediate Ir.vor iigatk*.:* under Section 22 on the imports of choose
because of the sharp !9?0 increase in cheese imports and the need to
protect the price supports fer milk in the face of these increasing imports.
Finally, last week. Congress (at Carl Albert's instigation) ’started talk
of introducing a bill 'to set milk.p rices at Soft of parity- Albert obviously
secs "a good thing. " Page Belcher is. concerned that the Democratic
leader ship, to embarrass you, could get enough liberal support for the
bill (in spite of the penny-per-auart increase in the price of milk from
tWe consumer viewpoint) combined with rural Republican Congressmen who
don't want to take the heat to pass the bill and confront you, with, a very
tough veto situation.
John Ehrlichman, George Shultz, Don Rice. Kenry Cashen and John
Whitaker met with Secretary Hardin and Under Secretary Phil CampbelL
on this problem last Friday and recommended that you appear in this meeting
to hold the line, listen to their arguments and then await developments on the
bill in the next two vyeeks to see if the Democrats can move the bill.
001235
in_ ACTION'S REQUIRED :
Enter the Cabinet Room, go around the table meeting them (Harold Nelson,
General Manager of Associated Milk Producers and David Parr are the two
key "movers" although the Association President, John’ Butterbrodt will
'also be there. See Tab A for attendees). When you sit down. Secretary
Hardin and Under Secretary Phil Campbell will be on your-right and. Mr..
Butterbrout on your left.
TV. POINTS OF- 'DISCUSSION;'
You might wish to make an opening statement (see Tab B) and then.toss
the ball to Hardin.
Tab C is a Fact Sheet on the group prepared by Under Secretary Campbell.
823
■ ATTACHMENT TO JOHN WHITAKER MEMORANDUM
lisi Kijv daipv industev pee
TO MSJif WITH THE PRES I DECT
Listed A 1 r> h a b e t i c a 1 1 y
Mr. Paul AT;" o’
Pure Mil’: P d C; • r.M ive
Sparta.
603 269-4 336
Paul Alagia, Esquire,, Executive Director and General Counsel
Dairynen, Inc.
506 Portland Federal Building
Louisville, Kentucky 40218
502 585-4301
Mr. Melvin Besener
Route 1
New Ulm, Minnesota 56073
507 354-4404
‘-'iSr. John E. Butterbrodt ,' President
Associated Milk Producers, Inc.
awuh: jk
Burnett, Wisconsin S3922
414 _ 885-6076
001236
■Mr. Bill EcUles, General Manager
Pure Milk Products Co-Operative
500 North park Avenue
Fond du Lac, Wisconsin 54935
414 921-4720
Mr. Don Gregg, Regional .Manager
Associated Milk Producers, Ino.
Central Region
1020 North Fourth Avenue
Sibley, Iowa 51249
712 754-2511
Mr. W. R. Griffin
Route 1
Newcastle, Oklahoma 73501
405 778-3474
824
ATTACH IENT TO J0R:1 WHITAKER MEMORANDUM
Mr. Carlyle. Hanson, Regional Manager
Associated Mil!; Producers , Inc.
Northern Region
Box 455 |
Nov: Uln, Minnesota SCO 7 2
507 354-8854 - |
^/-Marion Ecv.yn Harrison, Esquire t_ u " '
Washington Counsel tor Associated Millc producers, Inc.
Reeves & Harrison
1701 Pennsylvania Avenue,. N ■ W. .
Washington-;- D. C. 20006
202 298-9030
^Honhrable Patrick J. Hillings
Washington Counsel for Associated Milk Producers, Inc.
Reeves & Harrison -
1701 Pennsylvania Avenue, N. W.
Washington, D. C. 20006 - •
202 298-9030
Mr. Wesley Johnson, Executive Vice President and General Manager
.Mid-Anerica Dairyaen, Inc.
1 1C 1 l-o ! UiaveiSitV -
Springfield, Missouri 65S04
417’ -881-8112
Mr. John A. Moser, President
Dairynen, Inc.
Route 1, Box 560'
Louisville, Kentucky 40218
502 241 -8281
001237
l/Ha
Harold S. Kelson, Esquire, General Manager
Associated Mill*- Producers, Inc.
GPM Building, 4th Floor
San Antonia, Texas 78216
51£ 341-3651
Mr. David L. Parr
Associated Milk Producers, Inc.
Box 9539
Little Rock, Arkansas 72209
501 562-1900
825
ATTACHtfENT TO JOHN WHITAKER MEMORANDUM
Mr. Bill Powell, President
Mid- America Dairymen, Inc.
Route 1
Princeton, Missouri 64673
816 748-3101
Mr. P. L . Robinson
Dairy non, Inc.
Jonesboro, Tennessee 37659
615 753-3386
Mr. Avery Vose
Associated Milk Producers, Inc.
Route 2
Antioch, Illinois 60C02
312 427-2255 office
Mr . F r ank VJh i t e
Associated Milk Producers, Inc.
Route 2
Cedar Vale, Kansas 67024
316 758-3600
ATTACHMENT TO JOHN WHITAKER memorandum
Department of Agriculture At to :vl •. s
Clifford M. Hardin, Secretary
J, Phil Campbell, Under Secretary
4
Clarence D. Paimby, Assistant Secretary
Richard E. Lyng, Assistant Secretary
William E. Galbraith, Deputy Under Secretary
001239
White House Staff Attendees
George Shultz
John Ehrlichman
Donald Rice
\
Henry Cashen
fohn Whitaker
827
: ATTACHMENT TO JOHN WHITAKER MEMORANDUM
OPENING STATEMENT BY THE PRESIDENT
Secretary Hardin has told me about g: sat changes which have taken
place recently in the marketing of milk. He has told me about your
organization (Associated Milk Producers, Inc. ). I am. sorry I was
unable to attend your convention in Chicago last year.
We are very much impresses with what the Associated Milk Producers,
Inc. has been able to do in gaining bargaining strength for producers.
Secretary Hardin has told me that a cooperative organization such, as yours,
through responsible bargaining, can be of tremendous value to producers and
may even begin to' minimize the need for so many government programs for
the dairy industry. 001.240
During the years I have been in Government, representatives of
dairymen have kept me well aware of the heavy Government involvement
•in your business. Import quotas, price supports, special school milk
programs, marketing orders -- all of these are of real concern to dairymen.
. I .know too that Secretary Harbin- is particularly welt equipped to assist
dairymen with these programs. His early background as an agricultural
economist was as a dairy specialist. As a matter of fact, I understand he
wrote his doctoral thesis on milk marketing!
(At. this point the President could turn to Secretary Hardin and suggest that
he might elaborate on matters ot current interest to the group)
828
ATTACHMENT TO JOHN WIT AKER MEMORANDUM
- 2 -
WHO ARE VISITORS?
The ton executive ?: -related ?'i ?.T: Producers . Inc. , vhich
is a huge coop era r.ive free. Minnesota through Texas.
He c lieu ar ter s : z:l\ Antonie, Texas
They have been effective in bargaining for higher prices for
producers and have been active in politics.
U. S. DAIRY INDUSTRY
So. of Dairymen: 1959 - . 1,000,000
1969 -• , 400,000
Production and Gross Income: ‘
1964 - 127 billion pounds - $5. billion
1970 - 117 M " 6.5 “
Consumption? Per capita consumption steadily declining
ADMINISTRATION ACTIONS ?AV0?J-3:.F. TO DAI3YMMN • r ' ./
M *10 ‘
2. President i'oosed imoort auotas on dairy products, early
1971.
— ~ *
■" 3. President signed 1979 Farm Sill which contained improved
Class I Base provision. (This was widely sought by all
dairymen.)
4. President signed 1970 Marketing Bill which permits producer
"checkoff" of funds for promotion of dairy products.
WHAT -DO DAIT.YMSM W.'IT? 00124.2
1. Increase in 1971 support price. Secretary Hardin, on
3-12-71, announced no change far this year.
2. Economic formula for pricing market milk - Producer proposal
was rejected by USDA, but Secretary Hardin na3 said we’ll
try to work out acceptable compromise.
3. Con tinua tion-nf .«iis
* ? J jf in dude xtvrs
Srbr'e) v ’Ik k (f.y. 1972) does not
oic ci million.
829
TRANSCRIPT OF PRESIDENT’S PORTION OF TELEPHONE CONVERSA-
TION WITH JOHN CONNALLY, MARCH 23, 1971, 10 :16-10 :19 A.M.
President. [Picks up telephone.] Secretary Connally please.
[Hangs up.]
[Telephone buzzes.]
Bull. Mr. President, Congressman [unintelligible] is here for 5 minutes.
President. Oh yeah. Tell Haldeman not to come in until— I just wanted to call
[unintelligible] told Haldeman, I just, never — I just told Haldeman to come in.
Tell him to wait.
Bull. Oh, I didn’t realize it, sir.
President. All right, hold him. I’ll just be a minute.
Bull. Fine, sir.
President. Hello. [“Yeah” in background.]
Yeah, I thought it was, uh, was very, very helpful for, uh, you to give those
guys a good shot like that this morning. And as I, and I as I am sure you could
see I was, uh, trying to shame a few of them a bit because
Yeah.
Yeah. Well, uh, I, tell you that it’s very tight in the Senate. It looks like we’re
about two votes short. Isn’t that something?
Yeah. But it’s, but for this country and what it is, it’s, uh, almost a death wish
isn’t it? It’s a death wish. They, uh, we, uh, we’re afraid to do this or that be-
cause of, uh — well, it’s a — as the country gets more and more intelligent, they
get, uh, more and more fearful ; and that’s, and that’s what happened to the
Greeks, and what happened to the Romans, it’s what’s happened to the British, it’s
what happened, you know — that's what happens.
Yeah. Huh, well, it’s a retreat from greatness, too. It’s a retreat from leader-
ship. Retreat from leader — but anyway, we’re on the side of the angels, and, uh,
and I appreciated your picking up and pitching. That’s the way to do it, slug it
right to them.
Uh hm.
Yeah.
Yeah. Well you’ve handled it all extremely well.
That’s all right. [Laughs.]
Yeah. Yeah, the — don’t worry. They, uh, they’ll remember it. [Laughs.]
Yeah, at 10:30. [Telephone rings.]
Yeah. Yeah. They’re quite a, quite a group.
Uh hm.
You’re, you’re, you leaning to, to the, [telephone rings] to do it this year?
Uh hm. Uh hm.
Huh.
Yeah.
Get out the argument that if you do it this year you raise the price and all
that sort of thing.
Right.
Well, I’ll try to, uh, be equipped for other things. He’s going to, uh, meet with
’em at 10:30, and I’m going to try to keep
Yeah. Yeah, but I want to be sure I don’t, don’t, don’t cross the bridge today,
that’s what I mean, and I’m glad to talk to you about it. I didn’t know that —
Okay.
Got it.
Um hm. Um hm.
Yeah. All right.
Okay.
Well [unintelligible] in there.
[Hangs up.]
Hello [unintelligible ] .
830
TRANSCRIPT OF MEETING AMONG THE PRESIDENT AND D A TR Y
REPRESENTATIVES, MARCH 23, 1971, 10 :35-ll :25 A.M.
President. Let me get around to say hello to everybody.
Unidentified. All right. [Laughter.]
President. All 50 States. I know the answers [unintelligible].
Unidentified. [Laughter.] [Unintelligible.]
President. Yeah, right. I know you’ve done a good
Unidentified. [Unintelligible.] Mr. President.
President. All right. It’s good to see you here.
White. Frank White from Kansas. ■
President. It’s good to see you.
Unidentified. Jim [unintelligible],
Griffin. [Unintelligible] Griffin from Oklahoma.
Unidentified. Mr. President, Mr. President, right back here are a couple of
President. Oh yeah, yeah. Didn’t mean to walk by you.
Hansen, Carlyle Hansen, Minnesota.
President. Right, right. Boy, I know those two States. [Laughter.]
Unidentified. [Unintelligible] from California.
President. You drink milk, don’t you?
Unidentified. Oh, sure. [Laughter.]
President. Well, good. [Unintelligible.] Wonderful time to leave, uh, you know,
for that funeral for that, Uh
Unidentified. Oh, yes, yes.
President [continuing]. Fellow, uh, Whitney Young. Great fellow.
Unidentified. All the way from Kentucky.
Unidentified. Yes, Mr. President.
President. Good to see you here. Good to see you.
Bessen [sic] Melvin Bessen [sic] from Minnesota.
President. Yeah. Minnesota, [unintelligible], I can tell the way you pro-
nounce it.
Unidentified. Right.
Unidentified. [Unintelligible] of Texas.
Unidentified. How are you?
Unidentified. How are you? Good to see you.
President. You’re one of our fellows.
Buttererodt. John Butterbrodt, Wisconsin.
President. Yes, glad to know you. Good to see you. [Unintelligible.]
Unidentified. [Unintelligible] Illinois.
President. Yeah, Illinois.
Unidentified. Yeah.
Unidentified. Right.
President. Les Arends’ State. We just introduced [unintelligible.]
Unidentified. Unless you
President. Have you got any farmers in your district? Are you kidding?
[Laughter.]
Affeedt. Paul Affeldt [unintelligible].
President. Yeah.
Bishop. John Bishop, Mr. President, Iowa.
President. Right, s — , good to see you. Well, we’re delighted to have you all
here. Would you all sit down. Sorry to have kept you waiting, but I had the
Secretary of the Treasury on the phone, and, uh, Secretary Hardin and I had
to talk to him about a matter that might involve agriculture in any way, you
know. Consider some of those [unintelligible] and the rest, where you’re fighting
the good battle in the United States and for the ag — . agriculture community.
Let me, let me start this meeting with, uh, with uh, with one, uh. one, announce-
ment that may be of some interest to you. I, uh, first wanted to say that I have
been very grateful for the, the support that, uh, we have had in this administra-
tion, uh, from this, group. Uh, uh, I know that, uh. in American agriculture
this is the most, uh, widely, uh, recognized — it cuts across all of the farm
organizations. It's representative of all the States. Uh, I know, too, that, uh,
you are a group that are politically very conscious. Not in any partisan sense,
but that you realize that what happens in Washington, not only affecting your
business, but affecting the economy, our foreign policy and the rest, affects you.
831
And you’re willing to do something about it. And I must say a lot of businessmen
and others that I get around this table, they’ll yammer and talk a lot, but they
don’t do anything about it. And you do, and I appreciate that. And I don’t have
to spell it out. Dh, my friend, uh, [unintelligible] and some others keep me
posted as to what you do. The other thing I would like to say is that, that I,
uh, I appreciate the fact that this group — definite Republicans, Democrats, in
this, is, uh — and this may sound somewhat — the, uh — oh, in these days it is
sort of unfashionable to talk patriotism and the rest, but I still do. Now this
group is, uh, uh, is, uh — coming as it does — being sort of a bedrock, the heart-
land, as w r e call this America.
The heartland exists all over America, not just in the Midwest. Uh, but, uh,
that you, that you, have such a strong, deep, uh, commitment to this country
for what, what is stands for. Uh, that and, and, and, the thing that — in many,
many ways, all this I appreciate. That’s a part of it, in fact, that, that, uh, we,
we have s — , immediate problems of great concern to you. But [unintelligible]
I’ve been trying to say in a nutshell is this : That, uh, a great segment of agri — ,
agriculture has done an enormously effective job. Its, its productivity, and, and
the quality of its product, et cetera, for America, for American consumers. And
for that matter, for the world. But beyond that, uh, this group also has done a
job far, uh, uh — going far beyond it. Uh, it’s done — you, you’ve stood for those
things that, uh, are deeply needed in this country today. And, uh, you may next,
perhaps, uh, you are a relatively small group — I just want you to know that in
this, in this office, that kind of commitment, that kind of support above partisan-
ship, this is something that I am deeply grateful for. Uh, now, with regard to
another thing, I, I, uh, missed your meeting in Chicago last year, as you are
aware. In fact, uh, the Secretary gave a message. But, uh, I want you to know
that I have talked to our
Unidentified. Mr. President?
President. In fact, that’s the Vice President’s chair. That’s the hot seat.
[Daughter.] And, uh, you’re in — the Secretary of, uh, Defense, uh, belongs here.
Attorney General, uh, let’s see — that’s as far as we better go. We don’t want to
get into that Anyway, uh, I missed your meeting in Chicago but, uh, Cliff, uh
[unintelligible] about the possibility of your next meeting. And I want you to
know that, uh, at your next annual meeting, since I missed the other one, that,
I, uh, I’m going to do the very l>est I can, lacking some kind of a foreign trip,
or something, to come to it. I’d like to — I think that, one, you can’t do each of
these meetings each year, but, uh, one of the years while I’m in this office — this
would be a pretty good year, since it’s a nonelection year. And uh, I’d like to, uh,
meet with your [unintelligible] I won’t talk too long. I, uh, did want to just
discuss with them some of these general thoughts that I have expressed to you
today. So with that introduction, uh, that I, throw the ball over to Cliff Hardin.
And, uh, Cliff, uh — you then may want to throw the ball back across the table. We
are really interested in hearing what your views are. Uh, we’ve got many decisions
at the present time, as you know, of, of the [unintelligible] made regarding
imports, with regard to the, uh, price supports, and all the rest. And [cough]
so, uh
Hardin. Well, maybe I should just make a statement, Mr. President.
President. Yes.
Hardin. That, that kind of shows you where our, our differences are. We do
have a couple, uh — I don’t think there’s any quarrel at all in what the facts are,
uh, where we are on milk production, and, uh, consumption — these sorts of things.
The situation needs to be resolved. I am told they did raise the support price of
milk, uh, uh, on a more conservative range before, at one time, and you did so at
that time for good reason. Uh, production was dropping ; uh, it looked as though
consumption might pick up a bit. And, knowing that the dairy industry is a busi-
ness in which it is hard to get in and out, uh, quickly, uh, we were a little con-
cerned that we might be short of milk by the middle seventies, and that we’d
better move. Well, it did work, uh, or something worked. Uh, milk production
did increase a bit. Uh, I understand it is too soon to tell whether this is a new
trend or, uh, how long it will last, but, the facts are that milk production is run-
ning ahead of a year ago. Uh, total consumption last year was up a little, uh,
per capita consumption down a bit. And the, uh, [unintelligible] had to buy to
support the price. The cost of that is a little higher this past year than the year
before. Now, that’s not the real issue. The real issue is, in my mind, uh, whether
35-687 0 - 74 - 54
832
we dare to raise the prices, uh, which eventually results in some increase in the
retail level. Uh, maybe not immediately, uh, because they’re, they’re drafted at
market price above supports now, uh, just a bit. Uh, but, uh, uh, there is a point
in these argicultural commodities where we don’t control supply. Uh, where you
can push over the hill. Where total returns start reducing if you boost the price
up. And, uh, no one can prove whether we’re at that point or not. It’s a matter of
judgment. And I think that’s where our differences have, uh, come. We have
talked to these men, that, uh — this is a time when I think we have to be statesmen.
We have to look at what’s best for the man that’s pulling the teats out on the
farm, if I can use that old expression.
Unidentified. You do it with machines.
Hardin. And, uh
[Laughter.]
President. I know something about that.
[Laughter.]
U n identified. [ Unintelligible. ]
Hardin. But, uh, that, that’s the issue. I think we’d, I’d like to hear these
men-
President. Right.
Hardin. Speak up, uh, to us on, on the point.
Unidentified. Let me say that I, Harold and I stated earlier, so
President. That’s, that’s really it, that’s where — Cliff’s really trying to get
to do the right thing. In other words, the point is, the, you can get, uh, if you can
get the, uh [unintelligible] come up with, you get the, uh, price too high, you
get a situation there, you’re — It’s down, it’s — Drop off something drastic, and,
and, and, uh, so we’d like to know your views.
Nelson. All right.
President. We will go around the table and tell us what you want.
Nelson. First, Mr. President, uh, on behalf of all these gentlemen, I want to,
uh, thank you for the opportunity. We’re honored to, uh, to be here, and we know
how busy you are, and, uh, we’re deeply appreciative of the opportunity to be
heard by you. Uh, these gentlemen all know, uh, while, uh, many people in agri-
culture don’t think of you as having, uh, agricultural background, they all heard,
uh, what you told me on (lie telephone talking to me at our meeting about the
fact where, uh, [unintelligible] Congressmen [unintelligible] problem agricul-
tural area. That, uh, you’re deeply aware of the, uh, economic, uh, importance of
agriculture and that you have an unsullied track record in support of, of, uh
[unintelligible] agriculture. They all know that.
President. My mother and father are both from Indiana — one from Indiana
and one from Ohio.
Unidentified. Oh.
President. And finally when they retired they went back to the farm, and so
I have a little bit of agriculture background.
Nelson. So at least you see — you’ve seen something of the farmer. Uh, and the
Secretary is, Secretary has stated, he is, uh — We have no quarrel, uh, as to data,
and, uh, it’s, uh, strictly, uh, a matter of judgment. We have had an opportunity
fully to discuss our views of — with the Secretary. Uh, some points, uh, we have
tried to reach, the points with which we, uh, assume are of concern to you, uh, we
wish to, uh, tie this case right up to them. Uh, number one : [clears throat] af-
fect on, uh, consumer prices. Well, with response to that, it’s different. Uh, the,
uh, level of receipt is really, uh, a market level at this time. And, uh, in our view
it wouldn’t set, uh, involve any increase in consumer prices. Uh, although we
know that it’s inevitable there will be an, an — press even based on this, uh, uh, ex-
isting immediate situation there have been some increases in consumer prices
of milk. And, and, uh, of course, uh, we know some more of that’ll be the in-
volved, uh, due to inflationary forces — which we are well aware are not your
inflationary forces. Uh, number two is for the need, uh, insofar as farmers are
concerned, uh, I, I think that’s pretty well, uh, uh, irrefuted. The, uh, feeding-
milk ratio is the lowest it’s been in 10 years. The cost of labor, machinery, uh,
fuel — everything that farmers use to, uh, that is involved, uh, in, uh. produc-
tion of milk — uh, it’s, uh, has increased, and is increasing and they are in a real,
real bind. Uh, and it’s our view that irreparable harm could result unless, uh,
action is taken to at least try to maintain a status quo, uh. on this now. Mr.
President, we know that, uh, all the — everybody here is your friend.
833
And, and, uh, I know you know as we know that sometimes it’s hard to con-
vince a friend that what you’re trying to get him to do is, uh, good for him,
but that’s the posture that, uh, we come here in. Uh, [clears throat] the, uh —
not setting the support at, uh, approximately 85 percent our figures, uh, show,
would result in, uh, decrease in income to dairy farmers of $500 million. And, uh,
the, uh, cost to the Government [clears throat] of uh, setting at that figure would
be an increase of $30 million to $35 million. So, the arithmetic we like to use on
it is that if you take 20 percent of $500 million, you’ve got a half, uh, you’ve got
a $100 million. And so, uh, in that view we feel that the net cost to Government
would be actually no cost, and, uh, a gain. Uh, another thing, uh, that, uh, is of
concern to us, as your friends, is that, uh, the timeliness of the action. Uh, we
all know that sometimes if action is delayed, it’s not appreciated as it would be if
it’s taken in a timely manner. And, uh, that pretty well, uh, sums the, uh,
thing up, uh, as concisely as I know how, insofar as our position, uh
President. Let me get this, uh — [coughing] this is, uh, this is, uh — the real
point, the real point is this : What we put — say that the, uh, the raising the thing
to 85 doesn’t bother me a bit.
Nelson. Yes, sir. Yes, sir.
President. The question is, how are you going to look a year from now? Now,
does anybody have any other view on this? Is this the unanimous view? I, uh —
See, that’s the concern that, uh, has been expressed as to whether or not if you,
you go that you are going to 85 [unintelligible] said that the figure in those terms
would — —
Unidentified. Yes, sir.
President [continuing]. Mean the budget probably work all at the same salary.
That they’re hard —
Unidentified. Yes.
President. But it can be done. But the main point is, what is it going to do in
terms of, uh, of encouraging overproduction? Isn’t that really what you’re
talking about? And that produces uh, uh, uh — Phil, you want to say something?
Campbell. Sure. The figures actually show, of course Harold knows these figures,
and I think most of the rest of them do around the table. And, this is of greatest,
greatest concern to us, uh, to our office, because here and there for a year or so
of Secretary Patterson, the price was raised, and then immediately it, it, it had
to be reduced. It was reduced because of a big increase in production by about
5 billion pounds, and prices were reduced from $3.85 a hundred in 1952 and 3,
down to $3.15 in 1954 and 5, which is a 70-cent reduction. The same thing hap-
pened again, and, uh, when Secretary Freeman came in a few years later. The
price was raised up to a high of $3.40 in 1961-62. The production was its very
height of a 126 billion pounds and then the support price had to be dropped back
to a low of $3.11, which is a drop of 29 cents a hundred. Well, now this is the
past history. This is what we look at. Uh, if we knew it wouldn’t stimulate milk
flow and it wouldn’t go on back up to a 120, 122, 123, 124 billion pounds, I don’t
think anybody would have any argument as to what would occur. But, and we
don’t know and we frankly don’t think you people can know, either.
Nelson. All right.
Campbell. [Unintelligible] because we think everybody is in a, in a, in a
vacuum here as to the point the real situation is. Because we did have a turn-
around. Now, I’m not convinced this is a true turnaround personally, although
we have an increase of a billion pounds, because we did have a reduction in cow
milk, still, last year and I don’t think
President. Uh, uh, a reduction?
Campbell. A reduction not only in milk cows
Unidentified. [Unintelligible] total numbers
Campbell. So we don’t really, really — I think the increase is a result of, of,
milder weather in the winter time which has quite a lot to do with production,
Mr. President. Now, mild winter, you get much better milk flow than you do on
a very severe winter.
President. Yes.
Campbell. Well, in the previous winter, there had been a very severe winter.
Last winter was a mild one, and then the problems of forage and and feeding
and so on.
President. So that, so there’s, there’s another thing we can focus on.
Campbell. Yeah. Yeah, and, uh, hut, uh, we don’t know that this is a real
turnaround, because the conscious decision of dairymen to increase, uh [un-
834
intelligible]. The, uh, so that, that, really is, uh, is, uh, where we, uh, we’re in
the dark and we felt as though a little bit more time should be given to find out
if this is a real turnaround, because if we were to raise the prices up to about
$5 from the present $4.66 and we were to jump back up to a 120, 123, 124, or 125
billion pounds, well, we would have — unless per capita consumption increased,
unless increasing population took it up in the marketplace, the same amount of
milk that cost $600 million in 19, uh, 62, would cost close to a billion dollars
because of the difference in price was just about $5 instead of just over $3. Uh,
and, uh, this is, this is, a matter of real concern that, that we have. We are just
in the dark. If this is not a real turnaround, well, we still got room to raise
prices.
President. All right. Who’d like to talk?
Harrison. Mr. President, these organizations which are, have discussed with
my clients represent about 80,000 dairy producers. First thing I had to learn
when they came to us was that the producer is not the cow, but the farmer, so I’ve
had to learn a lot since then. We think that under the base plans which your
administration has been so helpful and the Secretary of Agriculture so helpful
to promote it, plus the new promotional legislation which permits money to be
spent for certain types of promotion, which your administration also has en-
thusiastically supported. That so far, except the last week or two, there has
been almost nothing that the dairy industry has wanted that this administration
has not been pretty enthusiastically for. Uh, the combination of those factors
plus the turnaround the last two quarters for last year — putting the two to-
gether, the dairy industry is doing a more effective job than it’s ever done
before in controlling production. But, I suppose as a lawyer and sitting in the
Attorney General’s seat I’d have to say that there, that, uh, Secretary Campbell
is right to this extent, there’s nobody that can absolutely swear on a stack of
Bibles and absolutely guarantee that this turnaround might not be permanent,
because
President [Unintelligible.]
Unidentified. We don’t know absolutely for sure.
Harrison. That’s right.
Unidentified. No- —
Harrison. But, uh, Mr. President, the odds are that it will.
Campbell. But the weath — Mr. President, the weather will even out. The
weather is not — 'that’s the great factor.
President. Yes.
Campbell. It will not stimulate total overproduction.
President. That’s just — check first.
Nelson. But, uh [clears throat] the analysis being made are the same people
who’ve been right now, seven years in a row. Uh, in any case that, uh, that,
this is not a turnaround. That’s their projections. And, uh, we have been right —
I mean they’ve got an enviable track record, that this is not, uh, a turnaround.
And, uh, as they, uh, I forget whether it was Secretary Hardin or Secretary
Campbell, I believe it was Secretary Campbell, pointed out that, uh, there has
been a turnaround in total, uh, consumption. I mean there has been, uh
President. Right.
Nelson. A change for the better.
President. Yeah.
[Several Voices], Yeah.
Nelson. There is — now, I don’t say that’s a turnaround, either.
President. More, more consumption.
Nelson. Yes sir, and, uh, as Mr., uh, Harrison pointed out, uh, we, uh, we do
have the means now to do more about controlling consumption with, uh, pro-
duction, with this base plan legislation, under this [unintelligible] legislation.
Over a six-State area of this organization, we have voluntarily invoked base
plans which have demonstrated the ability to tailor production to the con-
sumers it meets. Now, this new legislation we feel we can spread to these other
areas so we have that going for us that we hadn’t had before. We have one addi-
tional item which is very close to the Secretary’s, uh, heart — I’ll use a more better
term, which will be acceptable to him, and that is, this promotion legislation.
Uh, this route has demonstrated this. He says 80,000 dairy farmers representing
30 billion pounds of milk, is willing to spend money for promotion. And we’re now
embarked upon a program developing a promotional and marketing program
that are tied together which is the first time this has ever happened. But, if we’re
going to be able to take the money to do this, we’ve got to get it at a time when
835
we are at least holding our own, and not in a time of falling, uh, uh, regarding
land prices.
President. Yeah, one thing about that I insisted — a little aside — is that, uh, the,
uh, tlie, to get the, uh, I don’t know what, what can be done about it, but the
medical profession don’t really know much about cholesterol. Uh, that you’re
being a little more cooperative, talking about it. I mean that’s — if you fix a
glass of milk and have a heart attack ; well, I can think of a lot of other things
that’s going to give you a heart attack. A lot sooner, too.
[Laughter.]
President. But, uh, incidentally, I, uh, do happen to drink a lot of milk. Well,
but, uh, uh, — what, what’s the medical profession doing in that respect?
Nelson. Uh
President. There is cholesterol that goes up and down, you know. They say,
“No eggs, no milk, no [unintelligible].”
Unidentified. Now
President. They’re not sure.
UniDENTiFiED. Yes.
President. Cholesterol, as you know, is related to stress, it’s related to- — you,
you’ll have to test made one, uh, one week, or, uh, above normal, and next week,
uh, [unintelligible] be below, which, uh, uh, maybe you were drinking the things
that were, other people drink here, uh — —
[Laughter.]
Nelson. We’ve had some breakthroughs on research in the last six months. It,
uh — for the first time it appears to be, uh, uh, favorable [unintelligible] reports
and so on. And I’ve just formed a new organization that has, uh, widespread sup-
port among the producer organizations, that is, uh, providing research money.
And we’re talking about basic research, pure research, uh, for the first time,
which we — —
President. You are?
Nelson. Yes, sir, yes sir, yes sir ; we are. For pure research. And, uh we feel
that this can’t help but, uh [unintelligible] and good results.
President. You’ve got one point. It’s simply not to get into your business at
all, but, uh, in your promotion, every — everybody is going for gimmicks these
days, you know.
Nelson. Yes, sir.
President. Take, take sleep inducers. Now, uh, uh, an article in Header’s Digest
a couple of months ago in regard to sleeping pills — chromous use of them —
but, but almost any, any, uh, person who really studies sleep will tell you prob-
ably that, that, that lacking a pill — I mean which some, which has side effects,
which many times are not [unintelligible] — the best thing you can do is milk.
Any kind of thing, you can just, just a glass of milk. You don’t have to talk with
it or anything like that. It could be warm. It could be, uh, tepid, or it could be
cold, but, uh, but it has a certain soothing effect. Uh, you get people started on
that.
Unidentified. Well, that’s
President. And that’s, that’s my marketing picture.
[Laughter.]
Unidentified. It didn’t help sleep yesterday.
President. I already got that. [Laughter.] Look, but let me tell you that the
sleep problem is, of course, the it’s, uh it’s, uh, an American psychosis at the
moment. In all advanced societies, over 50 percent of the American people that
are adults, uh, at this time take some form of sedative. Uh, now, here’s, here,
here’s here’s the mountain. You can go to work all the time, maybe — if some —
sometimes you’ve just got so many problems you’re not going to sleep. But,
that’s all psychological, too. If you get people thinking that a glass of milk is
going to make them sleep, I mean, it’ll do just as well as a sleeping pill. It’s all
in the head.
Griffith. Mr. President?
President. Yeah.
Griffith. Speaking as 'a dairy farmer, the difference in this $4.66 and the $5
is just about your breaking point as to whether the average dairy farmer in
Oklahoma makes it or doesn’t make it. Now, uh, I believe that I’m as familiar
with dairy operations as anybody in the State of Oklahoma. Uh, in fact, all of
the farm programs we’ve had over all these years. But, we’re a unique bunch
of people, the dairy farmers are, uh — we started out back when we could just use
10-gallon cans and an old cooler and get by. Mr. President, that doesn’t exist
836
today. The, the inspectors say you have to have tile walls. You got to have the
latest equipment. Uh, you’re talking about, uh, in our loan corporation — I was
looking the other day — in our average size loan to dairy farmers today is about
$39,000 loan. [Unintelligible.]
Harrison. [Unintelligible.] That’s a loan corporation that’s owned by the
farmers.
President. Sure.
Griffith. Look, those farmers can’t — —
Unidentified. Co-op.
Griffith. Mr. President, but, but, we’re — I’m, really conscious of this thing
because I’m the fellow that, that approves those loans and I can see this gradu-
ally growing. And, uh, I, I, can see the, Mr. Secretary’s, uh, problem here of,
if you just knuckle down with it — cost us — and not make us any money. If we
had bigger farmers that has to make x amount of dollars, and if he gets a higher
price, he’ll take those dollars or if he doesn’t get a higher price he’s going to fix
you enough milk out there to get them anyway. So it helps both ways. But, I, I
can see his point, but you can, if you got to have so many dollars and it takes
more pounds to get it, why, he’s going to produce those pounds, Mr. President.
And that, and that’s
Unidentified. Based on a short [unintelligible] basis.
Griffith. Right, but I’m talking from a — you’ve heard these professional peo-
ple, but I’m talking from, uh, from a dairy farmer because that’s exactly what
I am.
Unidentified. Would you say you would not milk any more cows than neces-
sary. In other words, you don't milk an extra cow just because you like to.
Griffith. You, you would, you don’t, you’re not looking for a job, I’ll tell
you.
Unidentified. I think that’s the point. What is honest.
Unidentified. Yeah, what could they do.
Unidentified. Make it again. You mean that, uh
Unidentified. I think the whole point in this is that dairymen, because of
inflation, a necessity of certain return of income — he’s looking for so much.
Unidentified. Gross.
Unidentified. He’s not milking gross. He’s not milking additional heads of
cow just because he has a love for the dairy industry cow.
President. OK.
Unidentified. Although he does have a love.
President. But, uh, so you’re— Are you suggesting then that a raise in the
price in, in the support is not going to mean, uh, necessarily
Unidentified. We don’t think it’ll mean necessary to the increase, because he
has judgment.
President. Yeah.
Unidentified. And I’m
President. Sure, sure, sure.
Griffith. But, uh
President. Really, what we’ll really get down to here is psycho — is, is psy-
chology.
Unidentified. Psychology of it.
President. Isn’t it? And that’s something.
Unidentified. The dairyman today has changed.
President. You fellows know more about that than we do.
Unidentified. The dairyman today has changed over years ago.
President. Your, your judgment on the psychology is that he is likely not to,
to yield production.
Unidentified. Absolutely.
Unidentified. Yeah. He isn’t one of them.
Parr. People around the group— we’re in about 125 different organizations.
President. Uh hm.
Parr. They consolidated now just recently. I mean, this is the last 2, 3 years.
President. Yeah.
Parr. This 80,000 are now — we’re at one time 120 different board of directors.
President Yeah.
Parr. We just got together. Now, uh, as, as you say, uh, as somebody said — as
Marion said a while ago that, uh, this administration has been, uh — we pub-
licized this, uh, uh — You’ve been one of the best administrations we’ve had. Just
837
put it plain. I come from long roots Democrats, as you well know, from Arkansas.
I’m just being very frank about it. But, uli, this, uh, we got, uh, more
Unidentified. There’s some hope for him, Mr. President.
[Laughter.]
Unidentified. Not much.
Pare. I was also campaign manager for John Paul Hammerschmidt.
Unidentified. Yeah.
President. That’s right.
Parr. In the third dis — district. And the point here is that all of a sudden
we get together and ride them real good, and, uh, boy, this, this should be a real
terriffic blow. We’re trying to get in a position of self-help.
President. Uh hm.
Parr. Which we’re doing.
Unidentified. We're close to it.
Parr. We’re closer to it than we’ve ever been.
President. Self-help.
Parr. Self-help it is. We, we eliminate the, uh, our, our dogmatic type of posi-
tion of fighting one another.
President. That seems important.
Parr. And, and the, and the
President. Yeah.
Parr. Support program we want to get in position so we can run our own
self-help support program.
Unidentified. Right.
Parr. [Unintelligible] sit there and get it now, that we talked about it before.
And, uh, so we get all these organizations together and, and here we are. And
costs are still going up, and, and all of a sudden our — starts with these people
start looking up, say, “Well, what happened to your — what happened?”
President. Um hm.
Parr, Then we’re, then our organization structure, an organization structure,
we cannot get it all, uh — we can’t keep on moving toward it, see, by consolidating,
getting ourselves — eliminating our inefficient plants like we’re doing right now.
Unidentified. [Unintelligible.]
Unidentified. Right.
President. When you say eliminate your, uh — tell me about that. Do you — liow
do you do that?
Parr, Well, see you’ve got
President. How do you get — do you, your members do that — —
Parr. No.
President. Or — you can’t tell a guy to
Parr. Oh, no, no. What I’m talking about is a milk plant, say, in Minnesota,
You got one every 7 miles.
Unidentified. Manufacturing plant.
Parr. Manufacturing
Unidentified. Owned by processors.
Parr. Owned by processors.
Unidentified. They’re owned, they were owned by co-ops.
Unidentified. Co-ops. Farmer owned.
President. I see.
Nelson. And it’s a very inefficient thing, see, because they don’t have volume,
uh, to do it.
President. So how do you, how you do get that done?
Parr. We, we, we put those consolidations together. We say, “Okay, you were
‘x’ cooperative and you [unintelligible] percent to this plant, and now we’re all
together, so there’s no use of having that plant anymore. Let’s cut that volume
over here at another town.”
President. Um hm.
Parr. And make it — So we do that, then we raise the productivity.
President. Um hm.
Parr. Of our own opera — uh, ability to pay in a cooperative, see.
President. What — why are — You’re able to do that now because you’ve brought
the organizations together.
Parr. Right.
Unidentified. Efficiency.
President. When did the organizations — when were they brought together?
Parr. Last year.
President. The last
838
Unidentified. Two years.
President. That’s quite an achievement.
Pabr. It’s not an experiment.
Unidentified. [Unintelligible.]
Unidentified. Don’t say that while I’m sitting here.
Pbesident. Oh, I won’t go that far. [Laughter.] Matter of fact, the room is
not taped. [Laughter.] Forgot to do that. [Laughter.]
Unidentified. Mr. President, I think probably so far as experience is con-
cerned, I’ve had about as much in the dairy business as anyone. I was born and
raised there and haven’t been away from it since. And, I think I know what
dairy farmers are thinking and I think I know what kind of a job it is to get
information, communicate with dairy farmers. As it’s been mentioned here we
have done remarkably well during this administration getting the, uh, checkoff
programs as we call it, for advertising, promotion, and the, and the class-one
base plan. Now, these plans. We want to augment them we want to put them
into, into force. But as long as these dairy farmers feel that the price of milk
is declining and, uh, going down, it’s going to be difficult to sell them and use
these programs that we’ve already gotten you, ya, yeah, by working with the
administration — the administration working with us. Uh, these dairy farmers
are not a peculiar lot, or anything like that. They’re just good businessmen.
They live it 7 days a week, 16 hours a day. And I, I think that, uh, with all due
respect to the economists, uh, they have overlooked a lot of things in the economy
because I come up through a period when they said : “Well if you get $4 a hundred
for milk they’ll get it on the rocks.” Well, they didn’t, because people went into
other activities, occupations, because they don’t like these hours. And unless the
individual is dedicated to the dairy business, he’s not going to stay there that Way.
Now, I’ll admit that, uh, the increase in prices — I mean the, uh, increase in
production is going up to, uh, prevails now and that, uh. it’s a matter of facts and
figures, beyond a doubt, but that it’s going to influence things that much. Experi-
ence has taught me you just don’t do it.
Alagia. Well, another point, Mr. President, is that in the Southeast with these,
uh, dairymen, here, uh, uh, they’re very conscious that they’re uh, uh, caught
in this inflation which is not, certainly yours. And, uh, uh, their
U n identified. [Unintelligible. ]
Alaoia. Costs are up and, uh, yet their prices, uh, uh, are now, because of
support, are going to be going down. It will cost them uh, uh— well, they’re
just going to lose ground and they’re going to be, uh, to put it, uh, brutally
frank, I’m satisfied that there’ll be more dairymen going out of business That’s
for sure.
Pbesident. What part of the Southeast are you referring to? The Georgia,
South Carolina
Alagia. Kentucky.
Unidentified. Tenne — , Tennessee.
Alagia. Virginia.
President. Kentucky.
Alagia. Mississippi, Louisiana, Alabama.
Unidentified. Delaware.
Alagia. Georgia.
Unidentified. Tennessee.
Alagia. Tennessee. Uh, and uh
President. That’s uh, that’s pretty, pretty heavy milk producing area, is it not?
Alagia. Well, we have — It’s approximately about, uh, 6 million pounds of—
we market a year, in Dairymen Incorporated. And there’s about 14 or 15 billion
Grade-A pounds in the Southeast. Uh, and, uh, we’re satisfied in our judgment, as
well as in the judgment of these other men at the table, that, uh, uh, uh, produc-
tion isn’t going to be, uh uh, going, uh — It is not going to be on the increase.
President. Let me ask you, uh, let me, come to the key point. Suppose it does?
Let’s, uh — What, what do you think you’d do then? What?
Alagia. I, I think, Mr. President, in the, uh, in the latter part
President. [Unintelligible.] Wouldn’t you hate to have to do something next
year?
Unidentified. I think the dairymen will take care of themselves.
Alagia. I think we can take care — — -
Unidentified. They’ll take care of themselves.
Unidentified. Base plans
Unidentified. Individually.
839
Unidentified. We have to put your base plans in [unintelligible]. This is the
self-help, that, uh
Griffith. Mr. President, we have in Texas, Oklahoma, Arkansas and part of
New Mexico base-plan now [unintelligible] the total net transaction in Kansas
is total net [unintelligible].
President. Yeah.
Griffith. But, but it’s, uh, doing an excellent job and, and that’s the point that
we are getting over when we get over this hump, that’s exactly what — We don’t
want no hand out, uh, we want to control exactly what the consumer needs and
that’s all.
Nelson. And, it’ll give good — Uh, I think it’s utterly, uh, uh, I think everybody
would have to agree it’s utterly impossible to, or, uh, unthinkable that production
would turnaround so dramatically as, uh, to create problems by next year.
President. Let me ask — Uh, uh, [unintelligible] the problems create [unintel-
ligible] next year. I wondered what process were, was available. Uh, you, you
really mean that your organiz — that you were so well organized that you think
you might be able to, uh, do something.
Several Voices. Yes, sir. Yes, sir.
President. And you couldn’t have done that, say, when, uh, Ezra Benson
[unintelligible].
Unidentified. [Unintelligible.]
Unidentified. No, not, uh, when Ezra Benson or [unintelligible] Orville Free-
man.
Unidentified. [Unintelligible.]
President. Why, this is very important, that’s why — What are y — Uh, this,
this is, uh, this means, uh, uh, a new back to the, uh [unintelligible] did not
have before.
Unidentified. Yes, that’s correct.
Unidentified. Uh
Griffith. Mr. Secretary, I’d like to say that this — What you just said [unin-
telligible].
Unidentified. [Unintelligible] not the Secretary [unintelligible].
Unidentified. I’m. sorry.
President. [Unintelligible.] Yeah. Excuse me. Go ahead.
Unidentified. No, that’s, that’s, uh, uh
President. You did — I did — I didn’t realize though that you — You really think
you can — —
Unidentified. Yes.
Unidentified. They demonstrated in, uh
U nidentified. [ U nintelligible. ]
President. Go ahead.
Unidentified. No, I was just going to say, you talk about this psychology
President. Yeah, that’s really it.
Unidentified. Yes. We’ve got the response
President. The individual person, who is the free enterprise system.
Unidentified. Bight.
President. The guy [unintelligible]. He’s going to go breaking out there. Uh,
like, for example, I’ve been — Well, uh, I tell you we’re talking about inflation
out there, you know. You know, one of the basic causes, one of the major, uh, uh,
leaders of the inflation — the construction trade. I had to take a very hard
decision [unintelligible]
Unidentified. Right.
Unidentified. Yes, of course.
Griffith. Bight.
President. The other day. All right, it had to be done, because they had a 22-
percent increase since last year. And so, uh, these are my good friends, too,
believe me — those construction trade. My, my o — , my old man was a carpenter —
I. I respect those guys. They’re, they’re carpenters, and the painters and all
those — they’re good Americans, and decent people, but some of their leaders went
too far in this thing, and now they priced themselves out of the market. 'So, now
we’re getting them together. We’re .saying, "Look here.” Because what this, this
Davis-Baeon thing in effect said to them that as far as the Government’s $14 mil-
lion worth of contracts are concerned, that we will not be bound by a law
passed in 1933 that requires us to go to a union contractor. We will go to a
nonunion contractor because the union contractor has priced himself out of the
market. Now, so therefore, it has an enormous wobble. Now, the — so, what hap-
840
pens is these guys are all sitting down. The problem they’ve got, the problem
they’ve got gets back to the psychological. The problem they’ve got — it’s not —
and, uh, I sit, I sit around with their national leaders here, but they got local
leaders, and others that say, “Well, gee, I can’t speak for that fellow — oh, oh,
that guy up in New York is too tough. That fellow in Kansas City, Kansas City
one was too tough” — the Chicago one, the Omaha one. Now, the real question
that I am asking here is quite fundamental is whether you fellows will be that,
that, I mean, you’ve got that kind of cooperation.
Unidentified. Well
President. Do you want to talk about that?
Unidentified. Yes. I, I, uh, we’re, uh — what you’re looking at here is, uh, in
this group, uh, dairy farmers, about 20 States, and most of the heavy, heavy milk
production areas, I guess, except out on the west coast.
President. They’re in part of your organization, aren’t they? The west coast?
Unidentified. No, no.
President. They’re not?
Unidentified. Not yet.
Unidentified. Not yet. [Laughter.]
President. Why do they keep you, I mean [unintelligible] get lawyers from the
Midwest ?
Unidentified. We’re working on it, Mr. President. Two year, uh, profits, the
2-year profits of California that, Uh, make it difficult at this stage to bring them in.
[Laughter.]
Unidentified. Mr. President.
Unidentified. I don’t think he bought that.
President. Oh, I understand. Oh, that’s right. California — there is a problem.
I know Land-o-Lakes. Go ahead.
Unidentified. Yes ; they do.
President. I know, I know the difference. [Laughter.] Let’s get your view.
Unidentified. But, but I think the psychology that you’re talking about, uh,
is important.
President. Yeah.
Unidentified. And I think it needs the organizational structure that we now
have, plus what is on the drawing board for continuing this consolidation move.
Uh, that we can be, uh, the spreader of this psychology as far as dairy farmers
are concerned. Uh, there’s, uh — We have this authority as far as the classical
need for it, you give us. The other thing that’s going on in the, uh, nongrade-A
statement of this dairy industry is that we have, uh, standards that are being im-
posed on these dairy farmers at the farm where they’re not going to be able to
produce milk in the barnyard, under a shade tree. Going to have to have facilities.
So, they’re going to have to make a decision, many of these 10-, 15-cow op-
erations, as to whether they’re going to be a dairyman or not when these stand-
ards are imposed. And many of them are going to get out. They’re going to say
my age is such, the average age is about 56 — He’s, he’s just going to get out of it.
President. Sure.
Unidentified. Mr. President, here’s what the real catch to it is. You ask the
question: “Can — Do we have the organization to put base-plans in?” Uh, uh, the
big challenge here is, if you challenge us, you say “Yes,” but you reconsider this
idea of proprietorship and at at same time you’ve got to be told that production,
that we don’t want to drop — doesn’t do much in 1972. The answer is an unquali-
fied “Yes.” If we move it up to a hearing immediately the cooperation of the
administration and [unintelligible] from the Canadian border to the Gulf of
Mexico right down through the, the middle part of this country plus the South-
east. That, we got the capability of doing.
Nelson. That’s demonstrated, uh, Mr. President, uh, I want to repeat. Uh,
we demonstrated our ability to do this and in six States plus the States
Unidentified. Right.
Nelson [continuing.] That he just referred to. And you mav wonder, well, you
sold farmers on this, uh, uh, idea, No. 1, because it works in their best interests.
But No. 2, this base immediatley becomes worth money to them. The base that they
hold. They, they increase their capital, uh, worth, by many cows. To do this -
Hardin. Uh, there’s a little problem there. It’s, it’s — you create a value bv
government order.
Nelson. Well
Hardin. And, uh, in a sense.
841
Nelson. Yeah. Well, not when you, uh, uh, well, you may say that, but of course,
we’ve had them, you know, on these States we’re talking about now without
Government orders within regulated areas for the Government, uh, uh, where you
have Federal orders. And, uh, uh
Habdin. Yeah. We, we, we do have some protection in the law
Unidentified. Yes.
Habdin. On them against this [unintelligible] risk.
Campbell. Yes, you might get it.
Unidentified. Eight.
Nelson. Yes, there’s, uh, so, uh, I, I, I, I really don’t view that as a problem.
I’d say that the, uh— illegally— we think, that, uh, we represent a rather signifi-
cant geographical area, where there’s sufficient cohesion among dairy producers
to put in these base-plans. And, uh, one of the names that you mentioned, Land-
O-Lakes, that’s not a part of our controlled organization, but I think they’d have
to follow us, on this. If you really got into this base thing.
Unidentified. Mr. President, uh, I’d like to make a point. I think you have
some [unintelligible] here with regards to the relationship of the fifties, uh,
during the Benson administration, and the situation then as compared to today.
At that time, there was quite a potential of milk in the country that wasn’t being
marketed and that potential is almost nil today. So that the, the, the price struc-
ture will not have the same reflection as it did at that time, because there was a
lot of nonmarketed milk that came to market with that price situation at that
time. And the cow numbers today are the lowest in almost a century.
Unidentified. [Unintelligible.]
Unidentified. Do you want to move that production up — takes cows
Unidentified. And its more important than that if you go back and look at the
[unintelligible] interest and the calves are not there.
Unidentified. There — that’s right. There, the uh
Unidentified. Reflects the country.
Pbesident. Tell me about this going into the dairy business, Uh, how big an
operation is it?
Unidentified. It’s a high capital item.
Unidentified. That’s, uh-
Unidentified. But, but, well I’m going to let one of these dairy farmers talk to
that [unintelligible].
Pbesident. What about that?
Unidentified. Well, Mr. President, it’s a very expensive business to get in any
more. .
Pbesident. In other words if somebody’s going to — First of all, you ve got
people in the business. Uh, the question is, What can they do to prevent The ques-
tion, what about somebody going into the business? What does it cost? Is it a big
deal? $100,000?
Unidentified. At least that.
Unidentified. $100,000 won’t do it. It takes more than $100,000.
Pbesident. It does?
Unidentified. It takes
Pbesident. In other words, it’s not a business that can be expansible particu-
larly by new people coming in.
Sevebal voices. [Unintelligible.]
Gbegg. Mr. President, back in the fifties, uh, uh, when the costs weren t such,
it wasn’t anything for a man with a few cows, to, to [unintelligible] and go into
business. This no longer exists.
Pbesident. Um hm.
Unidentified. And you see, and they say it costs
Several voices. [Unintelligible.] .
Gregg. Mr. President, one more point that I would like to bring out. It affects
what you said at the very beginning when you came to the room. And that this is
the philosophy of living in our rural communities. Basically, Mr. President, I m
from Iowa, and, as you drive along the road, you see farmstead after farmstead
empty, falling into disrepair, in the, these changing times. And the exodus from
the farm sphere has been to the urban areas. We want, not from subsidies or any-
thing else, uh, but invested with our own self-help, to preserve this way of life out
there, because this is really where the, as you said, the rock-rib heritage, the
religious heritage, is there. And, uh, I live in that country and I love it and I
wouldn’t want to live anywhere else, but we want to preserve it, and we need
this help.
842
Unidentified. [Unintelligible.]
Geegg. This is, this is, uh, very, very important at this time.
President. Well, I want to preserve it, because that — It’s, uh, not only im-
portant economically to the country, that’s important everywhere. It’s far more
important spiritually, in fact.
Gregg. Bight.
President. I refer to spiritually in the broadest sense of the — And I [unintelligi-
ble] mean by that, the cities are all corrupt. People placed in there are not — But. I
do mean that you, you show me a country that loses its rural heartland. It some-
times inevitably it almost always follows that it loses its character. And, uh, and,
uh, it’s funny, this afternoon, in my view, a, a, uh, the, this, this solid, uh — Well,
the new frontier basically is now in the center of the country, not on either coast.
Closer though, because in a sense, uh, because the center is emptied out, and
now we have to find a way of not only to see that that — We have all the farmers
out there, but ways that you can have your rural communities keep up with us
there, and so forth so that people who live in that part of the country and find
the schools, the doctors and all the other things that make life worthwhile — that’s
what we’re all for. On that point, I think we’ll have very good — -Well, I, I appre-
ciate this, uh, chance to talk to you and we, uh, I always try to, uh, a distinguished
group comes up here to give you a little, uh, memento. Today, uh, you're going,
you’re going to get the press, uh. [Laughter] Uh, all kidding aside, I have some
Presidential cuff links for everyone here and, uh, with the Presidential Seal. And,
uh, doesn’t have anybody, any President’s name on it, so you can wear it what-
ever you are. [Laughter] And this, since your wives will wonder where you
really were today, uh, you can, uh — it’s a little bow that she can wear if she
likes, and the Presidential Seal. Uh, they’re, uh, they’re rather nice little trinkets.
The, uh, the, I think the, the main, the main point about them is that they look
more expensive than they are. Uh, you know the old story is that your children
will tell you when they go to school, that kings and emperors are — only give
gifts of gold. Well, these are not gold, but only Presidents can give them.
[Laughter] Thank you very much.
Unidentified. Thank you.
Nelson. Mr. President, one thing you didn’t respond to was, uh, your state-
ment that you’d said privately, uh, considerably earlier at today’s meeting, that
you wanted to attend our next meeting. We’re looking forward to your being
there, and we’ll tell you now we’ll have 35,000 dairy farmers with their wives
and families.
President. Who’s going to milk the cows ?
[Laughter.]
Nelson. Well, the cows are going to [unintelligible.]
[Laughter.]
Unidentified. Harold should have told you last Monday : we’re going to cut
production. [Laughter.] We’re not going to milk them.
Unidentified. Mr. Secretary
843
WHITE HOUSE LIST OF PARTICIPANTS TO MEET WITH THE
PRESIDENT, MARCH 23, 1971
LISTED ALPHABETICALLY
Mr. Paul Affeldt, President, Pure Milk Products Cooperative, Sparta, Wis-
consin 608 269-4356.
Paul Alagia, Esquire, Executive Director and General Counsel, Dairymen, Inc.,
506 Portland Federal Building, Louisville, Kentucky 40218, 502 585-4301.
Mr, Melvin Besemer, Route 1, New Ulm, Minnesota 56073, 507 354-4404.
Mr. John E. Butterbrodt, President, Associated Milk Producers, Inc., Route 1,
Burnett, Wisconsin 53922, 414 885-6076.
Mr. Bill Eckles, General Manager, Pure Milk Products Co-Operative, 500 North
Park Avenue, Fond du Lac, Wisconsin 54935, 414 921-4720.
Mr. Don Gregg, Regional Manager, Associated Milk Producers, Inc., Central
Region, 1020 North Fourth Avenue, Silbley, Iowa 51249, 712 754-2511.
Mr. W. R. Griffith, Route 1, Newcastle, Oklahoma 73501, 405 778-3474.
Mr. Carlyle Hansen, regional manager, Associated Milk Producers, Inc., North-
ern Region, Box 455, New Ulm, Minn. 56072, 507 354-8854.
Marion Edwin Harrison, Esq. [Chotiner’s Law partner], Washington Counsel
for Associated Milk Producers, Inc., Reeves & Harrison, 1701 Pennsylvania Ave-
nue, NW„ Washington, D.C. 20006, 202 298-9030.
Hon. Patrick J. Hillings, Washington counsel for Associated Milk Producers.
Inc., Reeves & Harrison, 1701 Pennsylvania Avenue, NW, Washington, D.C.
20006, 202 298-9030.
Mr. Wesley Johnson, executive vice president and general manager, Mid-
America Dairymen, Inc., 1101 East University, Springfield, Mo. 65804, 417
881-8112.
Mr. John A. Moser, president, Dairymen, Inc., Route 1, Box 560, Louisville, Ky.,
40218, 502 241-8281.
Harold S. Nelson, Esq., general manager, Associated Milk Producers, Inc., GPM
Building, Fourth Floor, San Antonia, Tex., 78216, 512 341-8651.
Mr. David L. Parr, Associated Milk Producers, Inc., Box 9589, Little Rock, Ark.
72209, 501 562-1900.
Mr. Bill Powell, president, Mid-America Dairymen, Inc., Route 1, Princeton,
Mo. 64673, 316 743-3101.
Mr. P. L. Robinson, Dairymen, Inc., Jonesboro, Tenn. 37659, 615 753-3386.
Mr. Avery Yose, Associated Milk Producers, Inc., Route 2, Antioch, 111. 60062,
312 427-2255 office.
Mr. Frank White, Associated Milk Producers, Inc., Route 2, Cedar Yale, Kans.
67024, 316 758-3600.
DEPARTMENT OF AGRICULTURE ATTENDEES
Clifford M. Hardin, Secretary.
J. Phil Campbell, Under Secretary.
Clarence D. Palmby, Assistant Secretary.
Richard E. Lyng, Assistant Secretary.
William E. Galbraith, Deputy Under Secretary.
WHITE HOUSE STAFF ATTENDEES
George Shultz.
John Ehrlichman.
Donald Rice.
Henry Cashen.
John Whitaker.
844
TRANSCRIPT OF MEETING AMONG THE PRESIDENT, EHRLICHMAN,
CONNALLY, HARDIN, WHITAKER, SHULTZ, CAMPBELL, AND RICE,
MARCH 23, 1971, 5 ,05-5 :35 P.M.
President. Hi, Phil, how are you?
Campbell. Mr. President.
President. Sorry to keep you waiting.
Campbell. That’s all right.
President. I suggest that we sit over here everybody. More room and, uh—
[coughing]. Sit down.
Unidentified. Yeah, this
Unidentified. But •
Unidentified. Oh, that’s all right.
Unidentified. I had that Senator [unintelligible].
Unidentified. Came in and got me nervous, uh, he
Unidentified. If he’ll go with you, well, that’s great.
Unidentified. Very clever.
Unidentified. Phil, uh, [unintelligible].
President. They’re counting on Hubert.
Unidentified. Concentrate on Hubert.
President. Hubert is supposed to have told Meany that I, uh
Shultz. I don’t know that you’ve met Don Rice, and you’ve obviously met
President. Yes.
Shultz. Don Rice.
Several voices. [Unintelligible.]
Rice. How are you?
Shultz. I talked with Meany this afternoon about the SST.
President. What’d he say?
Shultz. He said he was all out on it. If there was anything we wanted to do,
he wanted to do it. He’d be ready to do it. They
President. Well, could you ask him to, could you ask him, could you phone
him back after this meeting and ask him to call Hubert Humphrey, with the
understanding he, uh — —
Shultz. Yeah.
President. Hubert Humphrey has told everybody that he was going to be for
it. And he understood — only because Meany was for it.
Shultz. That’s right.
President. Because labor was for it. And, now that we understand he’s
wavering in it, he’s breaking. And that Hubert Humphrey’s vote may make the
difference.
Shultz. All right. I’ll call him. He said he — he had been calling me and that
he had quite a few disappointments, he said. But, anyway, I think we're working
on it and we will continue to work on it.
President. And he, however, is apparently not doing much.
Shultz. That’s right.
President. Uh, uh, uh, tell him we ought to review this, this situation. [Un-
intelligible.] Now, uh, John, would you express your views, uh, to us all — you
expressed them to me this morning. [Coughs.] I had a [unintelligible] you fellows
heard their story today.
Ehrlichman. It’s dead. It’s
Connally. Well, Mr. President, I don’t — I understand you did meet with ’em —
but I don’t want to try to go back over the economics of it, uh, I’m not — —
President. How about the politics ? Can you
Connally. Uh, I’m not trying to talk about it or discuss at any great length
the, the economics of it, but as far as the politics are concerned — looking to 1972,
it, uh, it appears very clear to me that you’re going to have to move, uh, strong
in the Midwest. You’re going to have to be strong in rural America, uh, and par-
ticularly that part of the country. Now, there are a lot. of things that you can’t
do, uh, with respect to farmers. They're almost, uh, beyond help at this point.
Uh, they feel like they are. They don’t feel like anybody’s trying to help them.
Uh, every time they turn around, they hear somebody talking about, wanting to
increase imports on beef from Australia to, to — in behalf of the consumer. Hog
prices are down what, uh, fif — seventeen dollars
845
Habdin. [Unintelligible] dollars from 29.
Connally. They were, they were 29 a year ago.
Unidentified. It’s because they grew so many.
Conn ally. Well, we had, there’s, there's lots of problems and they’re re-
sponsible for a lot of them. Fortunately, beef prices have held up fairly well
but, uh, grain is an insoluble problem so far as I can tell. Uh, it, it, it — working
with it for years, so I, I just don’t know many areas that you can do many
things — that’s the net of what I’m saying — to help, uh, the farmers uh, and
the dairy people now. These dairymen are organized; they’re adamant; they’re
militant. This particular group, AMPI, which is the American Milk Producers
Institute or something, uh, represents about 40,000 people. The one that parallels
them on the east, uh, Mid-Con, or something
Hakdin. Mid-American.
Connally. Mid-American group represents about 40,000. The southeastern
group, uh, Dairymen Inc., whatever their name is, represents a lesser number,
but probably in the range of 20,000 members. They, uh, very frankly, they tap
these fellows — I believe it’s one-third of 1 percent of their total sales or $99 a
year whichever is
Pbesident. Like a union.
Connally. Oh, it’s a check-off. No question about it. And they’re meeting,
and they’re having meetings. They have them a Sabine airplane, and they just
travel from one part of the country to another part of the country to get these
fellows in and they sign them up and it’s a pure check-off deal. And they, they’re
amassing an enormous amount of money that they’re going to put into political
activities, very frankly. And, uh, uh, I think, the purpose — I think they’ve got,
uh, a legitimate cause. I wouldn’t, I wouldn’t recommend that you do, you ta — ,
do that if it didn’t have any merit to it. They’re asking for, for an increase in the
cost, uh, in the price of a hundredweight up to four — , 492. They originally
started out at 505. And, uh, uh, I am sure that these fellows can all argue more
convincingly than I can that on the basis of the merits, they ought not to get it,
or that milk production will go up or something else, but the truth of the matter
is, the price of milk is now pegged at 492, You’re not going to raise the price of
milk. Uh, they’re supporting the price of milk themselves with their own money
by buying cheese. Right today. Now, if they, if you don’t support the price, let
them support it at 492, they’re going to have to drop it because their, their re-
sources are not such that, that they can continue to pay the difference between,
what, 466 and the, and the 492. So they’ll drop the price.
Habmn. Now they’re, they’re in trouble. They’ve already spent more money
than they have, and they’re going to drop the price of milk about 50 cents a 100,
on, uh April 1. [Unintelligible] lost to the Treasury. This is why the deficit
Unidentified. They’re not, they aren’t simply involved with low resources.
Connally. They, they may well have. Now, there’s some talk that, uh, that
if the management of it’s in trouble and so forth — I don’t believe it, I don’t be-
lieve if.
Unidentified. I’ll, I’ll
Connally. They just raised to pay $20,000 for a meeting in Brownsville not
too long ago. And this means they’ve got security. And, uh, they’re doing some
things that I think are a little strong-armed tactics, perhaps in, uh, the organiz-
ing, uh. But, uh, I don’t criticize that unless we are prepared to take on business
and labor and all at the same time. There’s no point in denying the farmer what’s
the practice for the laborer. And, uh, so I’m not, I wouldn’t judge it on a moral
basis. I judge it on the basis of, uh
Habdin. You’ve heard all the rest of it
Connally. I’m addressing myself to the narrow aspects, to the political aspects
of it. I don’t think there’s a better organization in the United States. If you can
get it, uh, if you can get more help for ’em, that, uh, will be. uh, be more loyal
to you. And, uh, and I think they’ve got a worthy case to begin with. And, uh,
that being true, I just think you ought to stretch the point. I wouldn’t wait till
next year, so that — I know that there’s been some advice given to you. to wait
till next year. Uh, that’s — I will differ with that, simply because they’re going
to make their association and their alliance this year and they’re going to spend
a lot of money this year in various congressional and senatorial races all over
this United States. And. you don’t want to be in a position — as you well know
better than I — you got no questions when people think [unintelligible] you’re
846
doing something for them. And they’re not lined up in position. If, if you do
something for them this year, they think you’ve done it because they got a good
case and because you’re their friend. If you wait till next year, I don’t care what
you do for them. They’re going to say, “Well, we put enough pressure on them
this election year, they had to do it.” And you, you get no credit for it. So it’s
still going to cost you an enormous amount of money next year, and you get no
political advantage out of it. And, I just think that, uh, that unless you just, uh —
the economics of it are just beyond reach, or beyond question that, uh, if you
ought to really seriously think about doing it this year.
President. That’s the problem. I have two problems — is that you have it
in the House and the Senate.
Connally. What you are going to do on that?
Unidentified. [Unintelligible.]
President. What I mean is, that if you don’t do it, they’re going to do it
anyway.
Connally. I think if you don’t do it
President. If they do
Connally [continuing]. They’re going to pass it.
President. I think they do.
Hardin. I think it’s
President. We have a damn near insoluble problem.
Hardin. I think it’s, as it stands today, it’s almost certain to pass.
Connally. Uh, I think that’s right.
Ehrlichman. Is that what Belcher told you?
Hardin. Yes, yes, I think they got 150 names on the bill.
Unidentified. You sure?
Hardin. And, uh
Unidentified. What is it?
Hardin. And, uh, the Speaker’s all out for it.
Connally. Absolutely. Wilbur’s all out for it.
Unidentified. Yeah.
Connally. Well, they’re going to pass it through the House. Beyond any
question in the world.
Hardin. And, uh, and, uh, they’ll pull the liberals on this one, uh, because
they’re, they’ll say they’re going to embarrass the President.
President. That’s right.
Hardin. Uh, the liberals might attract the consumers in any other situation.
But they won’t do it now.
President. That’ll raise the price, you see. I mean, that's the way they’ll cut
the liberals off. They’ll say : No, they’re going to — we guarantee, we won’t —
like they told us this morning, we won’t raise the price ; we’ll cut back on pro-
duction — we’ll have a voluntary
Hardin. Uh, I spoke, I spoke a little bit with them this morning, uh, but
I just don’t quite know
Unidentified. [Unintelligible.]
Connally. Now they’ve already figured out and how — They’re circulating —
I’ve had it for days — they’re circulating how they’re going to cut you up this
year. And that’s what they’re going to do. They got it all figured out. They’re
passing this out on the Hill, just exactly how many electoral votes they’re
going to cost you if you veto the 85 percent bill — which they think they’re going
to pass. And I think they’re going to pass it. And they say that it’li cost you
Missouri, Wisconsin, South Dakota for sure. Veto will probably cost you Ohio,
Kentucky, and Iowa. And, then they go on down and they take the States and
they figure what percentage of the States it’s going to cost you and they’re
going to [unintelligible].
Hardin. Well, if it does pass, I don’t think the President has any choice but
to sign it.
President. Well, all right.
Connally. Well, then, what do you do? If you do, you’ve cost yourself the
money — you’ve lost your political advantage. You, you’re, you’re infinitely
worse off.
President. Probably.
Connally. That’s where you are.
Hardin. I think so.
President. What’s the cost?
847
Hardin. Oh, it’s just a wild guess. They said 35 million and I would suggest
that it’s, uh, nearer a hundred.
President. You would?
Hardin. Now if they could get, if they need to — we had a little talk after you
left and
Unidentified. Right.
Hardin [continuing], uh, about whether they really could influence produc-
tion. And they could, if they went all out to do it. And what they would do, a
year from now, would be end up with a hundred and 20 million — billion pounds of
milk produced. Uh, they’d be a mature enough organization that they could, uh,
recognize that they had made a mistake and could go out and tell their mem-
bers they had to survive. Uh, well, they’re — maybe we won’t talk about that.
Uh, it’s a fact of life. Uh
President. Uh, it seems to me that the problem we have, Cliff, is this. That,
uh, and as you know we have decided on a different course of action in the
cheese business and all the other
Hardin. Well that has to be done. That has, has to be done anyhow.
President. Oh, what I mean isn’t that what we decided that, and that was
all we could do.
Uniden tified. Yeah.
Shultz. The higher you raise the price, the more certain it is that you have
to be strict about the imports. Otherwise, all we’re doing is paying the money
to the foreigners.
Unidentified. Yeah.
Shultz. You have to admit in connection with our business.
Uniden tified. Yeah.
President. Uh, I see your
Shultz. See that high price here throughout 'the
President. Uh, uh
Several voices. [Unintelligible.]
Unidentified. Yeah. Uh.
Unidentified. [Unintelligible. ]
President. The high interest rates.
Unidentified. That’s right.
Unidentified. [Unintelligible.] Yeah.
President. Well, it's one of those things where with all you experts sitting
around where you have to make a political judgment. My political judgment is
that the Congress is going to pass it. I could not veto it. Not because they’re
milkers, but because they’re farmers. And it would be just turning down the
whole damn middle America. Uh, where, uh, we, uh, where we, uh, need support.
And under the circumstances, I think the best thing to do is to just, uh, relax
and enjoy it.
Unidentified. The legal
Connally. Mr. President, trade for both years, if you do it. Trade for this
year and next year, if you possibly can.
President. With these people?
Connallt. Yes, sir.
President. Well
Connally. Yes, sir.
President [continuing]. Can that be done? I, uh, that’s what I, uh
Connally. Yes, sir.
President. That would be great.
Connally. Yes, sir.
Ehrlichman. If you could make a deal for the 2 years
Connally. Yes, sir. It can be done.
Hardi n'. They will do that.
Unidentified. You bet.
Connally. Won’t they Phil?
Campbell. Yes.
Unidentified. Yeah, I would
Unidentified. Well, I would say the price is stable.
President. Yes ; that’s correct.
Unidentified. Yeah.
Hardin. The other thing Mr. President, so they’re not asking
Unidentified. And, uh
35-687 0 - 74 - 55
848
Hardin [continuing]. That, uh, on grounds that it would be just hard to answer.
These fellows have a tendency to say, “Well, now look, uh, look at the con-
struction industry. Look at labor. Uh, and then why be so chintzy with us?
Uh, all, all evidence is our costs keep rising, and that we’re under the freeze, and,
uh, you take it out on us not, not the people who are really causing the problem.”
And, this is hard to answer. Uh, when it’s a challenge put that way
Campbell. Well I think we can settle for a— —
Unidentified. We’ve got this other consid
President. All right, make the best deal you can.
Unidentified. Yeah.
President. Do it for 2 years and, uh, we, uh, we, uh, we know that, uh, and as
I say, I appreciate the, the very fine judgment to the contrary which, which you
can’t do as, uh
Hardin. Now, we must do one other thing, uh
Unidentified. [Unintelligible.]
President. Let’s let them know what we’re doing. That, uh
Ehrlichman. Let’s get credit.
Unidentified. Oh God, if we’re going to do this
Connally. Mr. President
President. Let’s
Connally. Please, may I interject a suggestion?
President. Uh, uh
Unidentified. [Sighs.]
Connally. Uh
President. Anything you like.
Connally. Well, let’s don’t, let’s don’t trade the, uh, uh, through Agriculture,
uh, on the merits
President. Yeah.
Connally. Until, uh, some other conversations are had.
President. Yeah, yeah,
Connally. Uh-— —
Hardin. [Unintelligible] we’ve got a little work to do. We’ve got to let Page,
that, uh
Unidentified. What?
Hardin. I mean — Bob Dole.
Connally. All I’m saying is you
Ehrlichman. No. Later, because they’re
Connally [continuing]. You’re in this thing for everything, you, can get
out of it. [Unintelligible.]
Unidentified. [Unintelligible.]
Unidentified. Yeah.
Ehrlichman. You either hold your position now till you get the green light,
couldn’t you?
Connally. Oh, sure.
President. What?
Ehrlichman. Yeah, as I say, that Agriculture doesn’t need to do anything
right away.
Unidentified. He
President. You, you’re now thinking of the political offer ?
Ehrlichman. In a day or so.
Several voices. [Unintelligible.]
Shultz. The sooner you do it, the better off you’re going to be, aren’t you?
Hardin. Uh, yeah. Possibly, uh — Page.
Shultz. In a day or so.
Hardin. Now, Page knows Dole. I wish he hadn’t done it quite this way, but one
of his little talks to the Speaker, and Wilbur — he got them to agree to hold the
bill until he could talk to the White House.
President. Well
Connally. He, he could make, Mr. President, I suggest to you that somebody
make a little capital with the Speaker and with Wilbur. That you’ll do this.
And somebody can do it. Now, they’ll, they’ll say, well, you, you know, they’ll
say, well, “You did it because
President. Yeah.
Connally [continuing]. We’ve introduced a bill.”
President. All right.
849
Conn ally. But I know somebody down heTe can make a little time with them.
How much, how much I don’t know. But it’s worth trying, obviously, because
they’re both extremely interested in it.
Ehrlichman. Phil, move over there, would you. We’d like to get the picture of
some of the House groups that are [unintelligible]. All together now.
Hardin. Wilbur, uh — —
Unidentified. Shouldn’t happen [unintelligible].
Shultz. As an aside on this : Wilbur passed the message to me via Bill Gifford
to thank you very much. Apparently his family was
Unidentified. Yeah, he got around to the White House.
Shultz. And, uh, he spoke with — and the grand — and he said the grand-
children loved it. Wilbur says it’s the nicest thing that’s happened to him in years.
President. Hah.
Shultz. And I just wanted you to know [unintelligible] he apiprecia — he really
had a very pleasant evening.
iCoNNALLY. Let me tell you -how important I think it is to Wilbur. Now I don’t —
I can’t vouch for this. I haven’t pursued it. I haven’t followed it up. I don’t want
to. But I was told that you could almost name your price with Wilbur short of
all-out support of revenue sharing if you did it.
Ehrlichman. You know him?
'Connally. Yes, sir.
Campbell. You that close to him?
Connally. That’s correct.
(Campbell. And he knows this bill intimately.
Connally. That’s corredt.
Campbell. And he can explain it to you better than the dairymen.
Connally. That’s correct.
President. Yeah. Yeah.
Connally. He sure can.
President. I noticed they had a strong man from Arkansas in there, didn’t
they ?
Ehrlichman. Well, uh, let me ask this. Uh, who’s the guy that told? Uh
President. What my point is : This is something where I would not have it
done by you, Cliff, in Agriculture. Let’s have it done in a way by somebody who
has to get something out of it. Uh, like George. You see my point?
Hardin. Uh, hm. Sure.
President. On Wilbur.
Hardin. Sure.
President. How would that be? Does that sound all right to you, John? Ol
should you tell him?
Connally. No. I think somebody other than me, sir.
President. Yeah.
Connally. I think George, or
President. Yeah.
Connally. Whoever
President. You see my point?
Shultz. Yeah, maybe John and I.
President. Maybe John Ehrlichman and George.
Connally. And don’t overlook the Speaker, Mr. President.
President. And do the same with the Speaker. But, I mean the point is,
when you do something for these fellows, remember, don’t just let them think
that we’re doing it for, uh, turning our back on policy. Get a picture to them.
Unidentified. True. Right.
Unidentified. [Unintelligible.]
President. You have that point, now.
Unidentified. Yes, sir.
President. Fine.
(Connally. I could maybe suggest a better way. If you tie it in, uh, keep in
mind that Wilbur called me twice about this.
President. Uh huh.
Connally. And I think Jerry called him about this.
Hardin. Did he call you about it?
Connally. The Speaker called me, which is very unusual, and he just normally
doesn’t do that.
Unidentified. Well, that’s fine, Dick, both talked to you about it.
850
President. All right. Fine. Well, all right.
Ehrlichman. There is
President. I think that, I think that, I think what our play should be here
is basically, uh, uh, I think maybe it’s, uh, George and John — what do you think?
John Ehrlichman.
Ehruchman. I think that would be great.
President. They, they’re going to have to deal with them on revenue sharing
and all these other programs. And, and you, uh, pass the word to — you, of course,
handle all the — Page and all that.
Unidentified. Heh, heh.
Unidentified. If you give them cookies they, they’ll love it.
Hardin. Now look there, there are a few of those, fellows — . Let’s take them
home with us.
Several Voices. Oh, yeah.
Hardin. There are only a few. And, uh, I think we got to give them a chance
to holler back.
Ehrlichman. I’ll agree.
Unidentified. Now — I’ll agree.
President. That’s right. That’s right.
Hardin. We may need them again.
President. Yes, sir. They’ve been wonderful.
Unidentified. Wonderful.
Hardin. We’re going to let you time the [unintelligible] and see what we can
[unintelligible].
Unidentified. We may need some hands.
Unidentified. [Unintelligible.]
President. What would you like to do with the timing, Cliff? I mean — what
are you suggesting?
Hardin. Well, I think it depends on George. Uh, you know, uh, uh, we’ve got
to accommodate — I think we ought to go this week.
President. Good ; I think the sooner the better
Hardin. And, uh
President. Because, uh, let’s don’t have, let’s don’t do it under pressure.
Hardin. And, uh, uh, uh, I think that if you can get Wilbur and, uh, uh, the
Speaker quickly.
Unidentified. Yeah.
Hardin. Uh, then, uh, uh, you get a hold of Page and these other fellows, uh,
also, but, as soon as they know what we are thinking about, uh, it will leak out
pretty fast.
Shultz. Well, I don’t think that there’s any problems about the thing
and, uh
President. But be sure you get to Page Belcher.
Unidentified. [Unintelligible.]
President. He could get Wilbur.
Unidentified. But you’re going to have to [unintelligible].
Unidentified. Yeah.
Unidentified. [Unintelligible.]
Shultz. If you wanted to, you could do it. At the same time, of course, you
get different people doing it so they don’t get crossed up.
Unidentified. All right.
Campbell. It, it, it — it’s going to have to almost be done simultaneously be-
cause just as soon as they’ve talked, it’s so important, everybody is going to
know it. The first one that knows is going to get on the phone and call the
dairymen— — ■
Unidentified. You, uh
Campbell. And soon as one of the dairymen knows, all of them will.
President. I’ll say.
Shultz. Uh, but aren’t you and somebody going to want to talk to the dairy-
men about it so you can set up a
Ehrlichman. Make a 2-year deal.
Unidentified. A 2 year deal.
Shultz. Two year deal.
President. I think first you have got to — well, then and they’re going to
know — they’re, they’re
Campbell. But no, Mr. President, you could ask, you could ask if we’re able
to do anything would you be satisfied to leave this alone next year. They’ll come
851
back promptly — and you’ll get a way out if you do. They’ll never, never listen
to the Secretary. We’ve found that
Unidentified. Um huh.
Campbell. But I can tell you
Unidentified. [Unintelligible.]
Unidentified. [Unintelligible.]
Conn ally. May I suggest?
Unidentified. And I know
Campbell. I suggest just as quick I can get them on the telephone.
President. All right.
Connally. May I also suggest— —
President. Make sure you got the deal to present to me, And, uh-
Unidentified. [Unintelligible.]
Campbell. No. I’m not notifying them anyway.
President. No, no, no, no, no. [Unintelligible.]
Bhrlichman. His idea is that he’ll say, “Look we were able to do this. Will
you pledge this.” See?
President. Uh huh.
Campbell. No ; no problem.
Ehrlichman. Still hypothetical.
President. Yeah, yeah. Then that way the decision is still open. And then, boom.
Oonnally. And you can pretty well seal this, John and George, uh, when you
talk to Wilbur and the Speaker. The 2-year aspect.
Unidentified. You handle it.
Connally. You should hear that out and we’ll talk about it.
Whitaker. I just want to raise one point. The thing that got that started is
the concern of over-production. If you don’t think down the line with me it will
be more trouble in the end.
Campbell. This — if, if we do it’ll be 2 years off and not next year.
Unidentified. That’s it.
President. And John, what other problems does that involve? Uh, uh [unin-
telligible].
Several Voices. [Unintelligible.]
Hardin. [Unintelligible] you may have over-production next year. And we may
blame it on this. But it will be for other reasons.
President. Yeah.
Ehrlichman. Actually it takes more — takes longer than that.
President. There’s one thing about this, it’s one thing about this industry that
is, uh, quite interesting. It’s that, uh, it’s, uh, it’s a big business. From the stand-
point — you know, they go into this business, you know, and people say — it — as a
matter of fact, I get the impression, Cliff, and I’m not too much of an expert on
the farmer, but I get the impression that— for example, with regard, uh, uh,
regarding, regarding the price of hogs. People who go into that business, from
what I gather — it’s pretty easy, isn’t it?
Hardin. Changing the par—, went for parity ?
President. The dairy business, on the other hand, requires an enormous net
invest — investment. You know, you can raise more pigs, right?
Hardin. Yes. And the, and the times get
President. Fast. Fast. And that’s why the pig, po — , the corn-hog, ratio, uh —
that business goes up and down almost like an escalator, doesnt’ it?
Unidentified. Right.
Connally. Mr. President, two litters per year and the average now is running
better than seven pigs per litter, isn’t it?
Campbell. Mr. President, there has been some studies run on this and the
cost is approximately, it approaches $2,000 per cow. So you just multiply 50
cows, 100 cows. 150 cows by 2, $2,000. You’ve got a pretty good investment.
President. Well, you have an enormous — so somebody is going to go into that
business.
Unidentified. Yeah.
President. I mean, uh, there are added things ; it’s it’s a big, uh
Campbell. Big chunk of cash. Can’t go less than 50 cows
President. I know. Yeah.
Campbell. Seventy or eighty.
President. Yeah. Yeah.
Hardin. But, uh, we had, what, a million dairy farmers, uh, 10 years ago and
down 400,000 from what you were.
852
Shultz. We have a, uh, we have a problem to, to, uh, think about here on the
antitrust side of this thing. Or, uh, they’re going to wind up in trouble.
Hardin. Yes, they may have
Shultz. If they try to control production
Hardin. Yeah, they, they
Shultz. They’re over — they’re, very eager.
Unidentified. [Unintelligible.]
Hardin. May have already done it. But, uh, uh— —
Connally. The significant thing is they have legal counsel and they’re fol-
lowing their advice.
Hardin. Well
President. Good.
Shultz. They do have a good legal counsel.
Ehblichman. They have a good one.
President. They’ve got them all over the country.
Connally. Uh, there are many folks [unintelligible] but I don’t know, Cliff,
what you’re talking about.
Hardin. Uh, well, they’re, they’re sure, they’re sure awfully close to the line,
they are not the first group in the economy, that’s done that.
Unidentified. Oh, I’ll say. [Laughing.]
President. Well, we won’t prosecute the farmers.
Hardin. Could I bring up just one other thing?
President. Sure.
Hardin. It’s a somewhat related subject, Mr. President.
President. Sure.
Hardin. It doesn’t have anything to do with this matter ; but, uh
President. Britain?
Hardin. No.
President. No.
Hardin. Uh ? Meat, meat imports. Uh
President. Oh, that. I thought we decided that.
Hardin. We did.
President. We are going to import aren’t we?
Hardin. Uh, a little, uh, as little as possible. But Mr. Houthakker called me
yester — He’s convening a meeting now, and, uh, he thinks we ought to force the
price of beef down. And let in more imports. And he’s, he wants a interdepart-
mental meeting. I think it’s next Tue — Monday or Tuesday. And this is just going
to, uh, raise havoc with the cattlemen all over again. When we just got them all
quieted down. They’ve all written articles ; they’re just bleeding about what the
President did.
President. What would I do, if, if — and didn’t — I imported not too much,
and meanwhile, hold that middle, middle options?
Hardin. Yes. And, uh, they’re, and uh, so I called Ed and I said, “Now, I
want to see you bleed in your publications. I want you to post all the — and support
the President.” He went all out with me on this. “Well,” be snl-1. “we [r?"int«1-
ligi'ble] just a little.” And I said, “If I see one word [unintelligible] not one
damned one of you Is ever going to get in my office again. Do I make myself
clear?” And they did say it in their publications, They did go all out.
President. Um huh.
Hardin. Uh, so, uh, uh, to open this up again now, it just would be terrrible.
There’s no — in fact, it’ll change a bit. It’s just a — George, can you, can you collar
that guy? and, uh
Shultz. No, I, I
Hardin. He’s, he’s the one that’s given the Nixon administration the repu-
tation for being for low farm prices. He just — every once in a while he comes out
with something.
President. Sure never gets reflected in the CPI. Except, uh
Hardin. No.
President. Not this last month.
Unidentified. Oh.
President. It was for 6 months before that, though.
Unidentified. Oh.
President. So we’ve got to get credit for that.
Shultz. The last few months the wholesale price index has skyrocketed.
President. Yeah. That’s what I mean — food.
Shultz. Well, and the Consumer Price Index would have actually been, uh,
left no change, if it hadn’t been for the big increase in food prices.
853
President. Yeah.
Shultz. And I’m saying that that — food is going to follow wholesale prices.
Business. But, uh, the meat, the meat area is going to be a problem for us. If
we’re going to get into that, uh
Hardin. Well, from the consumer’s side, it’ll be great ; it’ll be, uh
President. You, you.
Hardin. You’ve got to get them [unintelligible]. But the poor customer then
[unintelligible].
Shultz. Uh, uh, the, I think the
Unidentified. [Unintelligible.]
Shultz. Well, I understand we’re heading into some real problems there,
but I
President. You mean
Shultz. Not that I’ve studied it, yes.
Oonnallv. Yeah. Go on.
President. I would too.
Shultz. Yeah, of course, we’re going to import less than we did last year.
Hardin. Possibly.
Shultz. Profit rising.
Unidentified. Yeah.
Hardin. But, I think I’ll probably import within 10 million pounds of this
thing. Isn’t that something?
Shultz. But all, all of these things. It’s just that, uh, it’s the same, it’s the
same thing when we discuss steel imports or, uh, bunch of these other things —
shoes or what have you, and meat. And on the one hand, there is the, the groups
that is pushing it ; on the other hand there’s the consumer. It, uh — as much
as — • —
Hardin. Everybody have one of these dairy departmental committees studying
something you can favor.
iShultz. Well that’s, well, Houthaker is particulary good at getting it, uh
Hardin. Yes.
Shultz. [Laughter.] These and, uh, I agree with making a speech or something.
Hardin, I don’t care if you study it if you can keep the trash out. But, uh, if
he passes us by, okay.
President. Let’s have nothing said about it. Is that fair enough? That is if
we’re going to have to do it.
Shultz. He has to call up and put his hand on that.
President. Will you tell him all about the increase?
Shultz. Study it and, uh, follow up on that.
Hardin. You can’t, you can’t convene an interdepartmental committee in this
Government and not — and then keep it out of the papers.
Ehrlichman. Oh, sure you can.
Unidentified. Um?
Ehrlich man. Sure you can. Yeah. Threaten them a lot.
[Laughter.]
President. The cattlemen have been pretty good friends for us, too.
Connally. Well, cattle prices are down. How much are they down uh, in the
past.
Unidentified. Not too much.
Connally. Few months?
Hardin. They’re going back up again, John, a little bit.
Unidentified. But, uh
Hardin. They are not so high, and so forth.
Connally. No, they’re not their highest.
Shultz. Same statement.
Hardin. There is a kind of
Connally. Oh, if they’re falling some, George, my [unintelligible] two or
three [unintelligible] do a study Agriculture [unintelligible] study [unintelligi-
ble].
Several Voices. [Unintelligible.]
Connally. Um hm, cattle prices. It’ll shock you. And just remember when
you talk about food prices, now, and, and bleed for the consumer, that today,
food prices in the United States are cheaper than they’ve ever been in the his-
tory of this Nation. In terms of what it takes for, well, uh, hours of work to
feed a family. Sixteen percent. That’s the lowest in the history of the world.
And
854
Shultz. So that
Unidentified. He’s my favorite secretary [unintelligible].
[Laughter.]
Several Voices. [Unintelligible.]
Shultz. You might study the [unintelligible] crisis awhile. [Unintelligible]
of all the things that
Unidentified. Where are they.
Unidentified. [Unintelligible.]
President. Well, we’ll try to keep the cattlemen from getting on our necks
for the moment.
Rice. We’ve got a, one loose end left on the, uh
President. Yeah.
Rice. The rate,
President. Uh huh.
Rice. And it seems to be one other thing we are going to have to do is coordi-
nate the timing of the announcement — which we have to make, uh, very
closely with these contacts. And
Erhlichman. Yeah. Well, right after this
Rice. However, there is someone to contact that doesn’t
Ehrlichman. We’ll coordinate that, Don. Uh, I think we’ll have to get the group
together. Uh, we’ll have to get Colson and Bob Dole in this, too. And, uh, so
President. Well, because Colson dealing with the, uh — Well, in any event, I
think you got a good game plan. You, you’d, uh, you know what to commit your,
your friends and our friends and so on. For political reasons you do, uh, Mr.
Mills and Mr., uh, [sigh] Albert. And then, uh, I, uh, I understand Phil will get
the dairy people and make the — and say, “All right, you don’t bug us next
year.”
Unidentified. That’s right.
Campbell. And you are going to do the same thing, George, with the Speaker.
Shultz. Yeah.
President. All right.
Shultz. What we’re going to, is
Unidentified. We’re going to pressure this thing.
Shultz. Eighty-five percent of parity.
Unidentified. Pardon?
Unidentified. Is that right?
President. It’s eighty-five.
Shultz. We’re not suddenly going for 506, and I would guess 498.
Connally. No, we’re going for 492.
Shultz. 492. [Unintelligible] decided the amount was right.
President. Fair enough.
Unidentified. All right.
Ehrlichman. Better go get a glass of milk.
[Laughter.]
Ehrlichman. Drink it while it’s cheap.
Unidentified. But you know
Unidentified. That’s really
Unidentified. [Unintelligible] might work.
President. [Unintelligible.] Yeah, I told them. I said, milk is a sedative. Milk is
a sedative.
Hardin. Say, I told the President this morning that on that T.V. show last
night — Uh, uh, that, that few times when he looked right into the lens
Unidentified. Great.
Hardin. Uh, that went just magnificent.
Connally. May I have, may I have 2 minutes with you on another matter?
President. Sure, sure, sure. Sit down.
855
PROPOSED PRESS RELEASE ATTACHED TO PHIL CAMPBELL ME MORANDUM
tl '&■"
CEHArtl'MIiriT Or AGrtlCUL-iURE
owes or the sccrctary
y/ASt 1 1 NGTON , LJ.C. 202SO
C-i:pM
f; _ -
7 =7 -
fk- ii: '-
4
March 24, 1071
T 0: - Donald B. Rica
- ’ Assistant Director
Offica of Management and Budget
Attached is a proposed press release whan action is completed
on this subject.
,/J/ • ■
T 1 ' 1 001265 .
JELL
Under Secretary
Attachment
856
PROPOSED PRESS RELEASE ATTACHED TO PHIL CAMPBELL MEMORANDUM
Secretary Here i n today announced an upward adjustment of
support price for manufacturing milk to $4.92 from the $4.66 support
price announced by Min on March 12 which was a continuance at tnat
time of support at the same level as for 1970.
In announcing the n&v; higher support level. Secretary Hardin
stated such announcements are mini-sums which cannot be lowered
during that marketing season after once being announced, but which
can be raised. Support levels can be lowered only at the beginning
of the milk marketing year each April 1st.
Secretary Hardin stated that there is a constant analysis of
the milk production situation, and that farmer costs have escalated
V- . “ . *
sharply particularly in concentrate feed which has gone up $10 to
$20 per ton. Farmers have no way to cut other costs to compensate
for those which have risen.
001266
857
JOHN WHITAKER MEMORANDUM , MARCH 25, 1971
March 25, 1971
• CONFIDENTIAL
001247
* t .1 -I d ;; /.’» :/J v, rCR T K£ PJSC ORD .
‘,'JZ'YZTt president's Meeting with 20 Key Dairy* Industry
Personnel {Associated Milk Producers, Inc.)
Cabinet Room ..
Tuesday, March 23, 1971
10:35 - 11:25 a#m.
\\ l?h Secretary Hardin and Under Secretary Phil Campbell, you met
a 20-m.m delegation of dairy industry personnel because you had
decided not to increase milk prico supports from about 3.0% to 85%
of j^rlty, and you wanted to hear their case for milk supports up
to r\j * of parity. You made a brief speech about appreciation of
their support and how they were solid, patriotic people representing
the heartland.
They mado the point that they felt a price support of about $30-3 5
million would produce $50G million in revenue for the dairy farmers.
With the taxes on this, it* would cost the Government nothing. They
also talked about high labor and capital costs putting the dairy farmer
In a real price squeeze. Finally, there was much give and take about
the question of whether thi 3 Cooperative (which represents abo'ut
30-407<> of the milk industry) could, in effect, control their own
production so as not to overproduce#
Hardin and Campbell dwelled on the point that they were not at all
euro if prices were increased that production would go up 3C high
that tho market would tumble.
f Just before the meeting. Secretary Connelly called to suggest that
t y ou go along and announce you were ready to go to 85. o of parity#
Hardin was against this, as it turned out, ar.d you made no commitment
858
JOHN WHITAKER MEMORANDUM, MARCH 25 , 1971
- 2 -
one way or the other in the meeting. Tho meeting \va3 held in tan
background o£ the possibility that the Democrats are trying to ram
through a bill, with Carl Albert leading the troops, ior a mandatory
85% prico support, which i£ passed, would put you in a tough spot
to veto it with next year's elections coming up.
,You promised that although you had missed their meeting, last year
in Chicago, you wouid do your very best to come to their next
annual meeting (September 3-4, 1^71, probably in Chicago again).
Later the same day, you convened Secretary Connally, Secretary
Hardin, George Shultz, John Shrlichman, Don Rice and I to map
out strategy on this problem, v
NOTE: IN THIS PARAGRAPH , THE WRITER IDENTIFIES HIMSELF AS THE SIXTH PERSON
WHO ATTENDED A MEETING WITH THE PRESIDENT ON THE AFTERNOON OF MARCH
23, 1371. THE WHITE HOUSE "WHITE PAPER' THE MILK SUPPORT PRICE
DECISION OF JANUARY 8, 1974 IDENTIFIES THAT PERSON AS JOHN WHITAKER.
859
GORDON STRACHAN MEMORANDUM, SEPT EITHER 28, 1971
THE V/HITH MOUjE
• WASHINGTON
:• t yr. t,v r O'. 7 Jj
September 28, 1971
001726
* b : : :o pj\: : n; t:; : rc
FROM:
SUBJECT:
k. R. halos;: la:
GORDON STRACHAN
Milk Money
<a
Three natters of interest developed following the articles in
the Washington Post and the Wall Street Journal (copies attached
1) The Clerk of the House reports filed by the milk
people were done incorrectly. This resulted in the
disclosure of several of the committee chairmen, who
talked with the reporters. John Dean has suggested
changes in the form to preclude any further disclosure
when the reports are filed- again.
2) The RNC (Lyn Nofziger and Ab Herman) have been
answering reporters calls to the RNC. Unfortunately
they have referred some calls to Lee Nunn, who has
pleaded ignorance or "if the money is coming to us,
we haven't seen any of it yet"' (which is true because
the full 232 transferred is held in committees con-
trolled by the milk producers 1 treasurer) .
3) Colson sent a memorandum noting a Justice Department
Anti-Trust Division investigation of the milk producers
association exemption, which was upheld by the District
of Columbia Federal District Court in 1956. Colson urges
his own non-involvement. John Dean is checking this report
on a very low key basis. f ur — trrcr*?.irtrrrr. ey
John Dean has been watching this matter closely as well as the
Common Cause suit, which has received soma media coverage by
mentioning Jack Gleason.
860
- JOB* WHITAKER MEMORANDUM, NOVEMBER 22, 1971
Indistinct document retyped by
House Judiciary Committee staff
November 22, 1971
CONFIDENTIAL
MEMORANDUM FOR THE PRESIDENT'S FILE
FROM: John C. Whitaker
SUBJECT: Meeting with Secretary Connally, Secretary Hardin,
George Shultz, Don Rice, John Ehrlichman,
John C. Whitaker
Tuesday, March 23, 1971
(5:05 - 5:38 p.m.)
You worked out a strategy to announce that the Administration
was reversing Secretary Hardin's decision and increasing the
milk price support to 85% of parity.
The essential format was that Carl Albert and Wilbur Mills
were going to pass a bill for a mandatory increase in milk price
supports. The collective judgment was that the Democrats had
the votes to pass the bill and give them a strong issue if you
vetoed the bill.
After requesting Secretary Hardin to do all in his power to make
sure the milk people did not over-produce and ruin their market
(the basis for Secretary Hardin's original decision not to raise
price supports) you decided to have Secretary Hardin reverse
his decision publicly.
Indistinct document retyped by
House Judiciary Committee staff
861
Altered John Whitaker Memo ran dum, Nov.
THE -:TZ MOUSE
22 ,
WA : crcCTOM ,
MEMORANDUM FOR THE PRESIDENT *5 FILE
// e /,
FROM: John C. V/hitaher
/
SUBJECT: Meeting with Secretary Connelly, Secretary Hardin,
George Shultz, Don Rice, John Ehrlichman,,
John C. Whitaker
Tuesday, March 23, 1971
(5:05 - 5:38 p.m.) , .
You worked out a strategy to announce that the Administration
was reversing Secretary. Hs-rdia’s decision and increasing the
milk price support to 85fo of parity.
The essential format was that Carl Albert and Wilbur Mills
were going to pass a bill for a mandatory increase in milk price
supports. The collective judgment was that the Democrats had
the votes to pass the bill and give them a strong issue it you
vetoed the bill.
After requesting Secretary Hardin to do all in his power to make
sure the milk people did not ov?r- produce and ruin their market
(the basis for Secretary Hardirvs original decision not to raise
price supports) you decided to have Secretary Hardin reverse
his decision publicly.
862
ATTACHMENT TO JOHN DEAN MEMORANDUM, FEBRUARY 2, 1972
THE WHITE HOUSE
Washington
Data 2— — (
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JOHN DEAN IfflAOmmUM , SEPTEMBER 28, 1972
THE WHITE HOUSE
WAS H » N GTO N
September 28, 1972
AD M I NIST R A TIYELY CONFIDENTIAL
MEMORANDUM FOR:
FR OM:
SUBJECT: Q01273
JOHN EHRLICHMAN
JOHN DEAN^f
Nader v. Butz
On August 21, the Court of Appeals of the D. C. Circuit reversed the
District Court's dismissal of the above- captioned case for mootness
and remanded the case for further proceedings. Before the Court of
Appeals issued its order to the District Court, the Government, on
September 11, moved for at least a month's delay to permit time for a
decision whether to appeal to the Supreme Court. The Court of
Appeals has not yet ruled on this motion, nor has any decision been
reached on the question of petitioning for certiorari . However, the
Solicitor General has informed me that, absent a very strong indication
of governmental interest, he would not be disposed to authorize an
appeal.
This memorandum is intended to outline the consequences which would
*-.^flowTrom the failure to delay this case by seeking certiorari from the
" Supreme Court. The greatest political damage would be caused by
depositions of the key individuals connected with this matter. Once
the District Court receives the order from the Court of Appeals re-
manding the case, plaintiff need only provide the deponents reasonable
notice before starting to take depositions. Requests for production of
documents would not create such immediate problems since, under the
Rules of Civil Procedure, the government is allowed 30 days to respond,
unless the Court orders a shorter time.
The cast of potential deponents include many persons prominently
associated in the public mind with such other alleged improprieties as
the Watergate incident, the ITT case, and the wheat sale to Russia.
<< 5-687 0 - 74 - 56
864
001279
JOHN DEAN MEMORANDUM, SEPTE143ER 28 , 1972
- 2 -
ADM INISTR ATI VE L\ CONFIDE NTL-. L
Listed below are the most likely targets:
1. Maurice Stans and Hugh Sloan. They can expect to be questioned
concerning the more than 90 political committees organized to support .
the re-election of the President which received donations between
April-Scptembe r 1971 from SPACE, TAPE and ADEPI*, the three
political action committees of the milk producers' associations.
Officers of these dummy committees, some of whom have publicly
stated that they had not authorized the use of their names for this .
purpose, might also be deposed. Similarly, officers of the 10 Re-
publican committees, which received the initial contributions from
SPACE, TAPE and ADEPT in March- April 1971, could also be
subjected to questioning about the circumstances of the contributions.
2. The principal officers of the milk producers' associations and
their political committees. Questions would cover the meeting on
March 23, 1971 with the President and details about political contri-
butions to the President's campaign. Letters from various dairy
officials which were uncovered by discovery in another private lawsuit
will provide strong ammunition for Nader in these depositions. The
letters contain assertions similar to the self-serving type statements
found in the Dita Beard memorandum which directly link the reversal
of Secretary Hardin's decision to the political contributions.
3. Murray Chotiner, Marion E. Harrison and Patrick J. Hillings*
The role of Murray Chotiner' s law firm, Harrison St Beeves, should be
of prime interest to Nader. Harrison and Hillings attended the meeting
between the President and the dairy officials, while Chotiner has been
identified in the letters discovered in the second suit as the recipient of
the contributions.
* »
4. Jack Gleason. Depositions of the dairy officials are liable to reveal
that Gleason was also a contact man for them and handled their unreported
political contributions prior to March 1971 when they began to contribute
through Chotiner.
5. Department of Agriculture: Secretary Hardin, Under Secretary Phil
Campbell and Assistant Secretary Clarence Palmby. All three of these
officials attended the March 23 meeting with the President and were
connected with this matter in ficial positions.
865
_JOHN DEAN MEMORANDUM, SEPTEmER 28, 1972 ■
-3-
A DM INIST R AT I V ELY CONFID ENT IAL
6. White House: John Ehrlichman, John. Whitaker, Chuck Colson and
Henry Cashcn. Ehriichman, Whitaker and Cashcn all attended the
March 23 meeting between the dairy' officials and the President.
Whitaker and Colson are also recipients of letters that will probably
be obtainable through discovery from Marion Harrison concerning
the milk price support level.
7. OMB: George Schultz and Don Rice. Both of these individuals
also attended the March 23 meeting and played visible key roles in
t the decision to raise price support levels.
8. Treasury: Secretary Connally. Although. Connally' s role in this
matter is not easily discernible, he will be a likely target of suspicion
due to his contacts with the Associated Milk Producers, Inc. (AMPI),
which is headquartered in Texas. Prominent play might also be given
to the fact that AMPI was among the first and largest contributors to
Democrats for Nixon.
00l28$ e ry difficult legal and political problems in regard to executive
privilege will also be raised if discovery precedes the election. It
would be politically embarrassing to invoke the privilege to cover
White House documents, which are alleged to disclose serious im-
proprieties, or to protect White House staff members. There is also
a difficult legal question as to whether executive privilege can protect
information sought from persons, who though formerly employed by the
-government, are no longer serving in this capacity. This problem would
be particularly acute in the cases of Secretaries Hardin and Connally,
Assistant Secretary Palmby, and Don Rice. All persons connected
with the receipt of the political contributions, even though employed
by the government, would, of course, in no way be protected by
executive privilege because this political activity would clearly fall
outside their governmental roles.
I have advised Griswold -- as well as Kleindxenst and Erickson -- that
I feel the government should appeal. The suit is politically motivated
so why should we not take the appeal which will cut off discovery.
Um Griswold obviously docs not want to take an appeal for political reasons
alone, but the decision by the appeals court also raises questions about
the authority of the Secretary of Agriculture to act pursuant to his
legal authority — an issue with implications for other Cabinet officers.
I have requested that Justice examine these facets of the case in greater
detail and raise them with Griswold.
866
JOHN DEAN MEWRMDUM t SEPTEfJBER 28 T 1972
- 4 -
administratively confidential
V/hat I am saying, in brief, is that we may have to tell Griswold
to appeal and. if that occurs, I would like your backing.
Reaction or comments:
001281
cc: H. R. Haldeman
867
- JOHN DEAN MEWRANDUM, DECEMBER 15, 1972
THE WHITE HOUSE
WASH I NGTON
December 15, 1972
A DM IN IS T K AT I YE I ,Y CONFIDENTIAL
MEM ORAN D U M FOR
FROM:
SUBJECT:
CHUCK COLSON
JOHN DEAN
Nader v. Butz
001232
You are probably aware of the Nader suit which is attempting to
prove that the March 25, 1971 decision by Secretary Hardin to
raise the milk price support level was improperly influenced by
large campaign contributions from the milk producers' political
committees. Plaintiff is now actively engaged in discovery and
has made sweeping requests for -White House files.
Although we fully intend to exert all efforts to prevent disclosure
of any of the White House documents, in order to prepare our
position it will be necessary to examine all pertinent materials.
Therefore, I would appreciate your forwarding to my office any
documents or materials in your office that pertain to (1) the
March 23, 1971 meeting of the President with the dairy officials;
(2)., the March 12, 1971 determination and March 25, 1971 reversal
of that decision on milk price support levels; and (3) the March \
1972 determination of the milk price support level.
• V
Since you will shortly be returning to private practice, let me add
the reminder that communications from individuals outside the
government to the White House will, in general, fall outside the
scope of protection provided by a claim of executive privilege.
The use of this privilege in the courts has only been recognized
to extend to state secrets and inter governmental documents contain-
ing advice or recommendations.
Thank you.
CHAPTER 6
The 1972 Presidential Campaign of Senator Hubert H.
Humphrey — Financial Elements
PREFACE
The Select Committee was charged with the responsibility to inves-
tigate, inter alia , the burglary of the Democratic National Committee.
Specific mention was made of this in S. Res. 60, and it is common
knowdedge that the burglary on June 17, 1972, and events which
ensued from it, were the precipitant for the creation of the committee.
These matters for many months were the center of focus of the staff’s
energies.
The broader mandate of the committee was set forth in the very first
section. It charges the committee with the responsibility to investi-
gate improprieties “in the Presidential election of 1972.” There is no
limitation in the resolution to activities by the Republican candidate.
As in the case of the investigation into allegations of misconduct by
the President’s re-election effort, the investigation into allegations of
misconduct in the campaigns of a number of Democratic candidates
was bipartisan. It should be noted that improprieties in campaign
financing were not limited to any particular candidate or party.
By fairly and objectively examining campaigns of all candidates,
we should be able to see more clearly that the trouble does not lie with
any particular party ; rather it is the process by which we nominate
and elect our President that is in need of remedy.
Senator Humphrey’s campaign for the 1972 Presidential election is
the subject of this report. Analyses of still other Democratic candi-
dates follow. It should not, therefore, be thought that Senator Hum-
phrey’s campaign apparatus has been singled out, or that evidence of
improprieties was not found in the others, as discussed elsewhere in
this report.
Much of this report relates to contributions by dairy producers. This
agricultural enterprise looms large among Senator Humphrey’s con-
stituency. It is natural and reasonable that he would be interested in
their welfare. The dairy producers found him to be a legislator of
national stature and influence who was willing to listen to their prob-
lems. In fact Senator Humphrey had been a consistent supporter of
this constituency since 1949. The milk producers were willing to pro-
vide his campaigns with financial support, and they were not uni-
formly particular about doing so by means of trusts which were legally
established for making political gifts. The desire of the cooperatives
to support Senator Humphrey began much earlier than the period
(869)
870
covered by this committee’s mandate — financial support was being
given to the Humphrey campaign for the Presidency in 1968 when
their political action trusts were not yet in existence.
This report reveals that dairy cooperative corporate funds were
funneled to the Humphrey 1972 Presidential campaign to the extent
of at least $25,000. An additional $17,225 was given by way of the dairy
trusts. The report examines Senator Humphrey’s involvement in the
pressure placed on the White House to increase the milk support price
in March, 1971. The report reviews financial mechanisms of the Hum-
phrey campaign prior to April 7, 1972 and questions of propriety in
some other large gifts unrelated to the dairy industry. (Alleged vio-
lations and irregularities occurring after April 7, 1972 have been the
subject of treatment and public comment by the General Accounting
Office.)
It is intended that this exposition — which was not meant to be ex-
haustive — will contribute to the body of facts which must eventually
induce the Congress to enact meaningful reform in the financing of
Federal elections.
I. CORPORATE CONTRIBUTIONS TO THE 1972 PRESI-
DENTIAL CAMPAIGN OF HUBERT H. HUMPHREY BY
ASSOCIATED MILK PRODUCERS, INC.— VALENTINE,
SHERMAN AND ASSOCIATES MATTER
A. Summary
The 1972 Presidential campaign of Senator Hubert H. Humphrey
received services worth $25,000 from Valentine, Sherman and Associ-
ates (VSA), a Minneapolis firm specializing in computerized politi-
cal services, which were paid for with corporate funds of Associated
Milk Producers, Inc. (AMPI). Corporate funds of AMPI were also
paid in 1971 to VSA for the benefit of various Democratic parties and
Democratic candidates in several States for which VSA performed
computer services and the total amount paid VSA for the benefit of
Senator Humphrey and other Democratic candidates and officials was
$137,000.
While involved officials in those States knew that AMPI was par-
ticipating in the venture, there is no significant evidence that any of
the officials were aware that corporate funds of AMPI paid VSA to
support the projects in those States. Although AMPI itself eventually
received some computer tapes, they were of no use or value to AMPI
and were only provided AMPI to establish a semblance of propriety. 1
The evidence indicates that the initial contract between AMPI and
VSA was drafted by J ack Chestnut, a Minneapolis lawyer, who was
Senator Humphrey’s campaign manager in his 1970 senatorial race
and his 1972 Presidential campaign. Furthermore, there is evidence
that Chestnut was informed in July 1971 that AMPI corporate funds
were being used to pay VSA, and that, at a later time, he notified VSA
that a $25,000 payment for the Humphrey campaign account would be
made by AMPI.
1 It was during a committee executive session with Bob A. Lilly of AMPI on November
14, and 16, 1973 that the first information concerning the Valentine, Sherman transaction
with AMPI was discovered.
871
On January 24, 1974 Senator Ervin wrote to Senator Humphrey
requesting that he meet with members of the committee statf concern-
ing “various allegations concerning the employment of corporate funds
by Associated Milk Producers, Inc., and others.” Thereafter on Febru-
ary 7, Senator Ervin wrote a “follow-up letter” which was “designed
to provide certain specifics respecting the inquiries the committee
wishes to make.” After referring to the evidence of the payment of cor-
porate funds of AMPI to Valentine, Sherman and Associates for the
benefit of the Humphrey campaign, Senator Ervin stated “we feel it
necessary for a committee member to speak with you respecting these
circumstances.” Senator Humphrey responded to both letters on Febru-
ary 20. Eeferencing the corporate funds paid to VSA by AMPI, Sena-
tor Humphrey said :
Let me say that neither at the time of the alleged transaction
nor now do I have any knowledge concerning this particular
matter. . . . Because I know nothing about the transaction and
have no records in my files relating to it, I see no point in
inconveniencing any member of your committee to meet with
me. 2
Mr. Chestnut, his campaign manager, after first being interviewed
by the committee staff, later refused to testify under oath in executive
session on the grounds that his testimony might be self -incriminatory. 3
A request to Senator Humphrey’s office for production of records has
not been fully met. 4
The Federal Corrupt Practices Act makes unlawful the giving or
receipt of corporate contributions to political candidates or commit-
tees, or the purchase with corporate funds of services to benefit polit-
ical candidates or committees.
B. Associated Milk Producers, Inc.
Associated Milk Producers, Inc. (AMPI) consists of approximately
40,000 dairy producer members in the southwestern, central, and upper
mid-western States. Its headquarters are located in San Antonio,
Texas. Because Federal statutes have forbidden the use of corporate
assets for political contributions, in 1969 AMPI established a trust
to collect monies from participant-donors, almost entirely dairy farmer
members and AMPI employees, and to make political contributions.
This trust was named the Trust for Agricultural Political Education
(TAPE). In 1972 it was succeeded by CTAPE. A more complete
description of AMPI and TAPE, as well as of other dairy producers’
co-ops, may be found at the beginning of chapter 5 of the Select
Committee report on the Milk Fund.
C. Valentine, Sherman, and Associates
VSA was formed as a partnership in 1969 and was incorporated in
1972. Its two initial partners were Jack Valentine and Norman Sher-
man. Sherman had been Press Secretary to Senator Humphrey when
he was Vice President. For a time, the firm specialized in providing
2 See Attachment No. 1, p. 899.
3 See Chestnut. 17 Hearings 7699-7703.
4 See Samuel Dash/David Gartner Correspondence, 25 Hearings 11816.
872
computer services to political candidates who desired to locate voters
favorable to their cause and induce them to the polls on election day.
The 1970 senatorial campaign of Hubert H. Humphrey was one of
YSA’s first clients. VSA was subsequently employed by Senator Hum-
phrey’s 1971-72 Presidential campaign. During that campaign, VSA
billed the campaign organization for services in the total amount of
$270,000. Included within this total were billings amounting to $200,000
for computer services regarding the States of Nebraska, Oregon,
Florida, and Maryland. As described in detail herein, $25,000 of this
amount was paid by AMPI from corporate funds and there is evidence
that Senator Humphrey’s campaign manager was aware of and pro-
moted this payment.
D. VSA’s Initial Proposal to AMPI
VSA developed a procedure by which it could capture voter names
and inclination and relevant demographic data which would be useful
in the computerization of political mailings and for other political
purposes. It decided to market its services in this regard to various
Democratic candidates and State parties. VSA hoped that it could
persuade AMPI to bear a large part of the cost of such work. So there
would be an appearance of a commercially useful product for AMPI,
VSA proposed to provide AMPI with computerized lists of rural resi-
dents which supposedly AMPI could use in various commercial pro-
grams it might undertake, such as selling insurance. This was, however,
a facade. David Parr, consultant to the general manager of AMPI,
testified that the documents surrounding the transaction which referred
to commercial uses were bogus, that AMPI had no real interest in
mailing lists, and that the project was “purely political.” 6 Harold
Nelson, a former general manager of AMPI, testified that ‘Tt]he
primary motive was to help Senator Humphrey” 6 in his 1972 Presi-
dential campaign.
William Connell, Executive Assistant to Vice President Humphrey
from 1965 to 1969, stated it was his idea to stir the interest of organi-
zations such as AMPI in sharing the cost of VSA’s political projects.
He stated, however, that he thought the AMPI payments would be
legal, that is, would come from trusts, such as the Trust for Agricul-
tural Political Education (TAPE), which was an adjunct of AMPI.
In January of 1971, Connell sent a letter to Parr stating that Jack
Valentine would be in Louisville, Kentucky, on January 29 while
Senator Humphrey spoke to a dairy group there, and suggested that
Valentine make use of the occasion to present VSA’s proposal to
Parr. 7 Following the event in Louisville, Mr. and Mrs. Parr, Connell,
and Valentine flew to Minneapolis in the company of Senator Hum-
phrey. Either during this flight, or while in Louisville, Valentine dis-
cussed his proposal with Parr. Valentine’s pitch stressed the political
benefit to candidates that the AMPI expenditure would bring. How-
ever, no agreement was reached at that time. Also, according to Con-
nell, there was no mention then of any benefit for or commitment to
the Humphrey campaign. Connell said that, while Senator Hum-
6 Parr, 15 Hearings ©842.
0 Nelson, 15 Hearings 6581. See report of Wright, Lindsay and Jennings to Board of
AMPI dated March 13. 1974, concerning earlier AMPI support of Senator Humphrey.
7 Parr exhibit 4, 15 Hearings 6911.
873
phrcy remarked that VSA did good work, he was not involved in the
discussion between Valentine and Parr.
Valentine, during this initial contact, submitted a written proposal
to AMPI. 8 This proposal recites that VSA specialized in the use of
computers in politics and that the end product is the . . oldest
type of politics known . . . locate and find your people and get them
registered and to the polls.” 9 It explains that Iowa, Kansas, and Ne-
braska had expressed an interest in VSA’s services but needed finan-
cial assistance. Under the heading, “Benefits to AMPI,” the proposal
argues that AMPI financing of VSA’s services would give AMPI
“tremendous political leverage.” 10 While the proposal contends that
“. . . AMPI would have superior lists by which to help organize its
membership,” it notes that “[a] 11 of the proposed States are critical
to Democratic victory in ’72.” 11
E. VSA’s Arrangements With AMPI Regarding Services in
Various States
It appears that, during the ensuing months, 12 arrangements were
made by which VSA with AMPI support would provide political
services to various Democratic officials in the States of Iowa, Kansas,
South Dakota, and Oklahoma which in some instances were available
for use in the Presidential campaign. An understanding of the
arrangements regarding these States is helpful as background to the
AMPI contribution made to Senator Humphrey. Connell and Ted
Van Dyk, who had also worked in Humphrey’s Vice Presidential office,
functioned as agents or finders for VSA with respect to these States.
The Select Committee has not established that any of the individuals
in these four States who contracted for or received the benefits of
VSA’s work were specifically aware that the payments to VSA by
AMPI were made from corporate money.
The initiating force behind the Iowa arrangement was Van Dyk.
The cost of this project was $60,000, $50,000 of which was to be paid
by AMPI. The evidence suggests that the work done in this State
was for Iowa Democrats generally. Thus, a letter from Valentine to
Clark Rasmussen, a former Iowa State Party Chairman, at the
“Hughes for President” headquarters dated July 13, 1971, indicates
that the project would benefit the Iowa Democratic Party and all Iowa
Democrats. 13 (Despite the destination of the letter, there is no evi-
dence that VSA’s work was done primarily to service Senator Hughes’
1972 Presidential effort.) 14 Valentine stated in this letter that a con-
8 Parr exhibit 5, 15 Hearings 6912-18.
9 Parr exhibit 5, 15 Hearings 6914.
10 Parr exhibit 6, 15 Hearings 6918.
11 Parr exhibit 5, 15 Hearings 6918. Nelson testified that the value of the lists for
AMPI membership drives was questionable. In fact, he disclaimed any commercial purpose
for acquiring the lists.
12 A Valentine memo to Connell of April 1, 1971 indicates that as of that date an agree-
ment had not yet been reached. See 25 Hearings 11822.
13 See Valentine to Rasmussen letter, 25 Hearings 11823. See also Valentine to Miller
letter, 25 Hearings 11827. It was in July of 1971 that Van Dyk’s retainer with AMPI
was increased from $25,000 to $60,000 per annum. Van Dyk explained that in early 1971 he
asked Nelson and Parr for an increase, because he felt his consulting services were worth
more in view of the “large number of consultants” retained by AMPI, and because he faced
financial difficulties because of the loss of a major client that had gone bankrupt. Van Dyk,
16 Hearings 7022. According to Van Dyk, the AMPI leaders told him they couldn’t raise his
retainer at that point, but they did allow him to charge to AMPI a portion of his firm’s
overhead expense ($10,000 during the first half of the year). Starting in July, billing for
overhead expense ceased.
14 With respect to participation of Hughes personnel, see 16 Hearings 7304-05.
874
tract was not necessary and that he was proceeding on the basis of the
“AMPI commitment.” VSA billed an Iowa official for $10,000 for
this project on July 12, 1971. 15
Yan Dyk was also the intermediary for the VSA project in South
Dakota for a senatorial campaign. This was to cost $20,000, $7,000 of
which would be paid by AMPI. According to Sherman, the campaign
personnel were aware of the arrangement with AMPI. As noted, how-
ever, there is no evidence they were specifically aware that corporate
money would be used in payment.
Connell arranged the Oklahoma project, which was performed for
the State Democratic Party. AMPI agreed to pay $30,000, which was
one-half the expense. VSA retained the rights to the lists prepared
for use in the 1972 Presidential campaign. The Oklahoma project was
begun with the intention of providing service to State candidates.
A letter from Valentine to Governor Hall dated May 14, 1971,
expressed appreciation for a previously held meeting and the hope
that they could get together with AMPI to get the project started. 16
A Valentine memorandum of July 20, 1971, states that certain State
candidates would share in the project and finance it with AMPI. 17 But
a VSA proposal to Governor Hall, dated July 21, 1971, suggests that
the lists provided might be used by other Democratic candidates. 18
The Oklahoma project, however, was halted after the initial data
accumulation, and no payments were made to VSA other than by
AMPI.
The Kansas project was for the State Democratic Party. 19 Its pro-
jected cost was $50,000; AMPI paid $25,000. As in Oklahoma, VSA
reserved the right to use the lists created in the upcoming Presidential
campaign. The project was discontinued after the initial data accumu-
lation due to non-payment by the State party.
F. The Corporate Payments by A M PT
On June 15, 1971, Valentine wrote Parr enclosing an invoice for the
Iowa project per instructions from Van Dyk. 20 Valentine stated that,
if there were any questions about the invoice, Parr should contact Val-
entine or Van Dyk. In an apparent effort to expedite payment, Valen-
tine called Van Dyk, who assured him that AMPI would pay.
Valentine also called Parr. Parr, who said he had talked to Nelson,
assured Valentine that VSA would be paid by July 30.
VSA received an AMPI corporate check for $25,000 on July 30.
Out of concern for the corporate nature of the check, Valentine said,
he called Jack Chestnut for legal advice. 21 According to Valentine,
^ See VSA invoice to Iowa official, 25 Hearings 11828. The Des Moines Register of
May 17, 1974, in a report by George Anthan. said that Senator Hughes “emphasized in an
interview that he suggested to officials of AMPI that they help finance the Iowa Democratic
effort, after he had turned down their offer of a contribution to his personal campaign
funds.” Hughes said AMPI officials “agreed to some support for the Iowa Democratic drive,
which was designed to assist the expected 1972 campaign by Representative John Culver for
the U.S. Senate.” Hughes said he had no reason to suspect corporate funds would be used.
18 See Valentine letter to Hall, 25 Hearings 11829.
17 See 7/20/71 Valentine memo, 25 Hearings 11830.
18 See VSA proposal to Hall, 25 Hearings 11831.
w See Valentine notes. 25 Hearings 11837.
20 See Parr exhibit 8, 15 Hearings 6924-29.
21 An additional dimension of the relationship between Chestnut and AMPI can be seen
in a covert arrangement established in 1970 for the payment of a retainer to Chestnut.
Rather than making monthly payments directly to Chestnut, AMPI was invoiced by
William Connell, former Executive Assistant to Vice President Humphrey, and Connell in
875
Chestnut said the check could be retained if AMPI were to receive
some computerized lists. Valentine stated that he and Chestnut to-
gether then drafted a contract to be signed by VS A and AMPI. The
contract indicates that the services to be performed by VSA involved
the compilation of lists of rural residents to be used by AMPI in its
commercial operations. This contract was back-dated to June 10,
1971 (presumably because the initial invoice was dated June 15,
1971) . Valentine signed the contract and sent it to Nelson and Parr by
cover letters dated August 2 and 3, respectively. 22 These letters speci-
fied that the contract enclosed was drawn by Chestnut. The wording
of the contract notwithstanding, Valentine stated that Chestnut and
Parr knew the $25,000 he received by corporate check was for political
work done in Iowa. After consulting w r ith Chestnut, Valentine de-
posited the AMPI check August 2. 23
Chestnut, when subpenaed to testify before the committee under
oath about his knowledge of the VSA-AMPI relationship, asserted
his privilege against self-incrimination and declined to testify. 24 He
had previously been interviewed by the committee staff without oath
on December 13, 1973. During this interview, Chestnut said he had
some recollection that Valentine told him the $25,000 check had been
received. Chestnut stated he told Valentine that, if the payment was
for legal corporate work, Valentine could accept it. Chestnut said he
has no recollection of being asked by VSA to draft any contract in
this connection, despite the fact the Chestnut law firm file on VSA
contains what appears to be a draft of an agreement between VSA
and AMPI relating to the provision of rural names. 25 This draft agree-
ment, however, is substantially different from the June 10 contract.
When first observed in the Chestnut law firm VSA file, the draft agree-
ment appeared just underneath an invoice to VSA for July in the
amount of $91. The Chestnut calendar relating to services performed
contains an entry on July 29, 1971, reflecting preparation of a “milk
contract” for VSA. 26
Nelson indicated in his testimony that Chestnut was aware of the full
parameters of the understanding between VSA and AMPI and par-
ticipated in its establishment. As he testified, “we asked him [Chest-
nut] to prepare the deal.” 27
Parr has no recollection of receiving the August 3 letter from Valen-
tine enclosing the contract. He said that, while some invoices from
VSA may have been routed to him for approval, it was Nelson with
turn paid Chestnut. Parr has stated that AMPI wanted a Minnesota lawyer who was
familiar with polities and dairying because of a bill in the legislature and because of concern
over a rival co-op, Land O’Lakes. AMPI wanted an attorney to keep it posted. Connell
recommended Chestnut. Parr discussed it with Chestnut, and a retainer was agreed upon.
Parr states Chestnut was paid through Connell because of reluctance to add another attor-
ney to AMPI retainer payrolls. Parr said it is likely that he had conversations with Chest-
nut about political contributions. Connell had first met Parr and Nelson during the
Humphrey campaign in 1968. Connell was placed on retainer with AMPI as a consultant
in the spring of 1969 at $25,000 per year. His invoices for eight months, beginning in
April of 1970, totaled $5,000 more than necessary for his annual retainer in order to pass
through $625 per month to Chestnut. See Connell 1/21/70 letter, 25 Hearings 11839.
22 See Valentine letters to Nelson and Parr and VSA/AMPI contract. 25 Hearings . 11840.
23 Long distance phone charges for the Chestnut law 7 firm show calls placed to Connell on
July 30, 1971, as well as August 2, 1971. A long distance call to Connell had also been
charged to Chestnut on January 19. 1971, three days before Connell sent the letter to Parr
(See Parr exhibit 4, 15 Hearings 6911) which suggested a meeting between Parr and Valen-
tine and which appears to have set the entire chain of events into motion.
24 See 17 Hearings 7700-02.
25 See VSA/AMPI draft, 25 Hearings 11844.
26 See Chestnut calendar. 25 Hearings 11845.
87 Nelson, 15 Hearings 6581.
876
whom Valentine mainly dealt. Parr acknowledged that, although VSA
proposed to provide AMPI with rural lists, the primary purpose be-
hind the AMPI payments was to reduce the costs to various Democratic
Party leaders of political work done by VSA. He conceded that AMPI
expected to acquire political influence by paying portions of the costs
Democratic officials incurred for VSA’s services. During his testi-
mony before the committee in executive session, the following exchange
occurred :
Hamilton. * * * [T]his contract was back-dated to cover the
payment of political moneys for the work done in Iowa, and
to cover the use of corporate money for political work done in
other States in the future ? Is that fair ?
Parr. I think that would be right . 28
All payments by AMPI to VSA — which eventually totalled $137,-
000 — were paid from corporate funds. This figure includes not only
payment for work done for Democratic leaders in Iowa, South Dakota,
Oklahoma and Kansas, but also the $25,000 paid by AMPI for VSA
services rendered to the Humphrey Presidential campaign (discussed
below in detail). The following schedule sets out the payments made
to VSA by AMPI:
Amount
Date paid of check
July 16, 1971 $25,000
August 25, 1971 25,000
October 18, 1971 7, 000
November 15, 1971 , 27, 500
December 21, 1.971 25, 500
December 29, 1971 27, 000
Total 137, 000
While certain invoices were contemporaneously submitted to achieve
certain of these payments, as discussed below, a wholly new bogus set
of invoices and letters reflecting these transactions was prepared by
Valentine in 1972. 29
Nelson’s initials appear on certain of the VSA invoices indicating
that he approved payment to VSA. When Nelson was asked to explain
the necessity for his approval of payment, he said it was to control this
sort of “political expenditures.” 30 He testified further : “I recognize
it as being illegal.” 31
G. AMPI Contribution s to Senator Humphrey’s Presidential
Campaign
1. THE $25,000 CORPORATE PAYMENT
A fundraiser for Senator Humphrey was held on October 8, 1971,
at the Raclisson South Hotel in Minneapolis. Parr and Nelson attended
this affair. 32 According to Valentine, he met Parr and Nelson at the
airport and transported them to the hotel. Valentine arranged this
means of getting together with Parr and Nelson so he could impress
upon them his need for additional payments. He told them he needed
28 Parr. 15 Hearings 6841.
29 See further list of VSA invoices and checks, 25 Hearings 11846; and Lilly exhibit
31. 14 Hearings 6193-6215.
30 Nelson, 15 Hearings 6590.
31 Nelson, 15 Hearings. 6595.
32 AMPI flight logs show travel to Minneapolis on October 8 and 17, 1971. See AMPI
flights, 25 Hearings 11847.
877
$25,000 for Kansas, $30,000 for Oklahoma, and $25,000 for the Hum-
phrey projects, a total of $80,000. Nelson, Valentine said, gave him
assurance of early payment. Nelson said the money would be paid in
the same manner as previously, even though the dangers of making
the payments with corporate money apparently were discussed. It
appears that both Valentine and Nelson wanted to make certain that
VS A provided some services directly to AMPI to support the
payments.
Parr’s testimony in executive session provides some corroboration
of this account. He recalls that he and Nelson met on two occasions
with Valentine. According to Parr, one of these occasions was in the
fall of 1971 when Parr and Nelson went to a Humphrey fundraiser in
Minneapolis. He remembered that Valentine picked them up at the
airport, and testified that there may have been some conversation about
money due.
In December, 1971, as related by Sherman, Chestnut telephoned him
to advise that part of the Humphrey bill would be paid by AMPI.
Similarly, Valentine stated that Chestnut informed VS A, probably
through Sherman, that AMPI would meet $25,000 of the Humphrey
debt to VSA. AMPI paid VSA $25,500 on December 21, 1971, and
$27,000 on December 29, 1971. From these payments, VSA credited
$25,000 to the Humphrey account. 33 Chestnut, in a staff interview,
denied he arranged for AMPI to make this payment for the benefit
of the Humphrey campaign, denied informing VSA that the payment
would be made, and denied being aware that AMPI money was used
to reduce the VSA campaign debt. 34
There is, however, documentary evidence indicating that Chestnut
was in fact aware of the AMPI payment for Humphrey to VSA. One
such indication is found in a memorandum from Sherman to Chestnut,
dated December 27, 1971, which contains partial reports on VSA work
in Nebraska, Maryland, Oregon, and Florida. 35 With respect to the
first three States, Sherman stated that the charge is $125,000, of which
$100,000 was to be paid by the first of the year. He then wrote, “you
have paid $20,000 and another $25,000 is certain by other arrange-
ments ” (italics added). The reference to $25,000 by “other arrange-
ments” appears to refer to the AMPI payment. 36
A VSA invoice to “Humphrey for President” on December 29, 1971
states that $100,000 is the cost for services in Oregon, Maryland and
Nebraska. 37
33 Sherman stated he knew of no benefit to AMPI for its payment on the Humphrey
account.
34 It may be relevant that Chestnut’s telephone records indicate that two calls from Miami
Beach, Florida, to Parr in Little Rock. Arkansas, were charged to him on December 29,
1971. ( See Chestnut Phone Records, 25 Hearings 11852.) Records of the Seaview Hotel,
Miami Beach, Florida (see Seaview Records, 25 Hearings 11861) reflect that Senator
and Mrs. Humphrey were registered in a three-room suite from December 28, 1971, to
January 3, 1972. Chestnut and his family registered separately for the period December 30,
1971. to January 2, 1972. Chestnut’s invocation of the Fifth Amendment when subpenaed to
testify under oath prevented his questioning to determine if the calls to Parr on Decem-
ber 29, 1971, were related to the AMPI payment of the same date. Even though Parr
admitted that he frequently talked to Chestnut during this period he informed the Com-
mittee (through his attorney) that he does not recall specific discussions with him during
this period or discussions relating to payments to VSA. He is certain there was no such
conversation in which Senator Humphrey participated.
35 See December 27, 1971, Sherman memo, 25 Hearings 11869.
30 Valentine has stated that this memorandum constituted written evidence of an oral
agreement between VSA and the Humphrey campaign for Nebraska, Maryland, and Oregon
reached between Sherman and Chestnut in August or September of 1971. Chestnut denied
that the memorandum constituted a contract between VSA and the campaign.
87 See 12/29/71 VSA invoice to “Humphrey for President”, 25 Hearings 11872.
878
However, in the just-discussed Sherman to Chestnut memorandum
written 2 days earlier, Sherman had stated that the charge for Oregon,
Maryland, and Nebraska was $125,000. The reduction of $25,000 most
likely reflected the payment from AMPI.
A Sherman memorandum to Chestnut, dated January 24, 1972,
complained of a lack of payments by the Humphrey campaign. 38
Sherman stated, “It’s killing us” and “we are absorbing the overhead
costs through our other clients.” 39 He noted that $85,000 of $200,000
due for work in Florida, Oregon, Maryland, and Nebraska had been
received. But a later YSA invoice to Humphrey for President “c/o
Jack Chestnut” dated February 16, 1972, shows that, as of January 24,
only $60,000 had been actually paid by the campaign organization to
VSA. 40 Again the $25,000 difference appears to reflect the AMPI
payment. These documents strongly suggest that Chestnut was aware
of the $25,000 payment from AMPI.
It is instructive to note that the last three AMPI payments to VSA
in November and December of 1971 totaled $80,000. This corresponds
precisely to the amount Valentine says he asked Nelson to pay in Min-
neapolis in October 1971 and to the AMPI commitments for Oklahoma
($30,000), Kansas ($25,000), and Humphrey ($25,000). By adding
this $80,000 to the $50,000 for Iowa and the $7,000 for South Dakota,
a reconciliation of the total amount paid by AMPI to VSA — $137,000 —
is achieved.
2. INDICATIONS THAT AMPI OFFICIALS INTENDED MORE THAN $25,000 OF
THE $137,000 TO BE FOR SENATOR HUMPHREY’S BENEFIT
There is certain evidence suggesting that AMPI officials intended
more than $25,000 of the amount paid VSA would benefit Senator
Humphrey’s campaign. In this regard, the testimony and evidence
provided by AMPI official Bob A. Lilly must be considered. The
evidence Lilly submitted consisted both of testimony and handwrit-
ten notes describing the various matters in which he was involved. 41
Lilly’s notes inform that, on or about July 19, 1971, he was told that
Nelson, Parr, Tom Townsend (of AMPI), Jack Chestnut, and others
had met at Senator Humphrey’s home in Waverly, Minnesota. 42 Soon
afterwards, Nelson, Parr, and Townsend told Lilly, according to his
notes, that AMPI was committed to pay $140,000 to VSA for Hum-
phrey and Congressman Wilbur Mills. The commitment to Humphrey,
Lilly understood, was made at the Waverly meeting. Lilly says he
was told that money would be spent by AMPI in several States for
38 See 1/24/72 Sherman to Chestnut memo, 25 Hearings 11873.
39 A Sherman memo to Chestnut of 1/26/72 complains, “I have taken what money we
have in Valentine, Sherman and invested it in the Humphrey campaign.” (See 1/26/72
Sherman to Chestnut memo, 25 Hearings 11874.)
40 See 2/16/72 VSA invoice to “Humphrey for President”, 25 Hearings 11875.
41 Lilly, 14 Hearings 6144-65 ; and Weitz affidavit, exhibit B, 14 Hearings 6226-36.
43 Both Parr and Nelson testified that they had never been to Humphrey’s Waverly
home, although Nelson said Parr told him he had visited there. There was a fund-raising
event for Senator Humphrey at his home on September 18, 1971. but the Select Committee
received no firm evidence that any of the above named AMPI officials were in attendance.
Senator Humphrey’s office has advised that no guest list has been maintained. Chestnut
recalled that in the summer of 1971 there was a fund-raising event at Humphrey’s home in
Waverly. He recalled a large tent erected on the lawn. He said some officials from AMPI
may have attended, but he has no recollection of conferring with them, nor of any con-
ferences they may have had with Senator Humphrey. When Connell was asked if he was
present at Humphrey’s home in Waverly in the summer of 1971 when AMPI officials were
present, he said lie did recall an event with 506 or 600 people present and a large tent on
the lawn. He said Parr and Nelson may have been there and it was likely Chestnut was
there, but he has no recollection of any discussion at that time concerning an AMPI com-
mitment to Humphrey.
879
Senator Humphrey and Congressman Mills in the form of payment
for comnuterized voter lists. Lilly had no knowledge of any arrange-
ment between AMPI and ASA before J ulv, 1971 .
It appears that periodically from July, 1971 to January, 1972, Lilly
had conversations with Nelson, Parr, and Townsend concerning pay-
ments made, and to be made, to VS A. Lilly apparently had some re-
sponsibility to insure that proper amounts were paid, and he made
periodic attempts to determine the status of AMPl’s obligations. He
preserved several pages of notes that he made contemporaneously with
these efforts. 43
The notes, written at different times as the obligations matured,
contain certain conflicts as to amounts and designations. Lilly’s notes
indicate that, in a conversation with Parr and Nelson, he was at some
time told that $137,000 was to go to VSA for the following: Iowa —
$50,000; Oklahoma — $30,000; Kansas — $25,000; South Dakota —
$7,000 ; Humphrey — $25,000. Lilly cannot reconcile these designations
with his earlier understanding that, the entire amount would benefit
Humphrey and Mills. Lilly’s notes also indicate that, after all pay-
ments had been made, he talked with Nelson who told him that $50,-
000 had been allocated to Humphrey. 44
Nelson’s recollections are likewise confused. He remembers the air-
port ride with Valentine as predating the arrangement between AMPI
and VSA. 45 It was his recollection that on this occasion he met Valen-
tine for the first time and an oral agreement was reached for VSA
to do work for AMPI. However, his understanding is that VS A’s work
was to be for Senator Humphrey’s benefit and that the AMPI pay-
ments would reduce the cost of VSA’s services to the Humphrey
campaign. Valentine told Nelson, “. . . this (agreement) would make
it possible for them to furnish lists to the Humphrey campaign for
much less than they otherwise would be able to do it.” 46 Nelson said
the AMPI commitment to VSA could have been $140,000. He had no
firm recollection of the contract signed by Valentine in late July, 1971,
which was back-dated to June 10, but he thinks it was sent to him
pursuant to his meeting with Valentine in Minneapolis. Nelson was
aware that corporate funds were used to make payments to VSA in an
amount totalling more than $100,000. He was not aware that candi-
dates other than Humphrey were to receive any benefit from the
AMPI relationship with VSA. 47 He did know that projects were to
be undertaken in five or six States, but thought they were related
to the Humphrey campaign.
Valentine’s testimony, of course, does not support Nelson’s recollec-
tion that they met in Minneapolis before the arrangement was made. It
appears that Nelson may be mistaken as to the events of the Minne-
apolis meeting. 48 It is useful to note, however, that at the October 8
43 Weitz affidavit, exhibit B, 14 Hearings 6226-36.
44 Ibid.
45 Sherman’s recollections, based on a contemporaneous conversation with Valentine,
support Valentine’s account of this situation. In addition, Sherman says that Chestnut may
have accompanied the group.
46 Nelson, 15 Hearings 6595.
47 Robert Isham, an AMPI official, also thought the VSA lists were prepared to benefit
Humphrey.
^Records provided by Senator Humphrey’s office indicate that the Senator spoke to an
AMPI conference on July 28, 1971. at the Thunderbird Motel in Bloomington. Minnesota.
This motel is located near the Minneapolis Airport. The Select Comftiittee, however,
received no firm evidence that Valentine and Nelson met on this occasion. However, AMPI
flight logs show travel to Minneapolis on July 28, 1971. (See AMPI Flights to Minneapolis,
25 Hearings 11847.)
880
meeting, Nelson for AMPI pledged $50,000 to Senator Humphrey’s
Presidential campaign. 49 Both Senator Humphrey and Chestnut were
present at that meeting. Nelson stated he may have intended at the
time that the money pledged would come from trust funds (and thus
be legal money) but that he had not excluded the possibility that cor-
porate money would be used. There is no evidence, however, that such
an additional sum was contributed to Senator Humphrey from cor-
porate sources.
As to whether it was intended that AMPI payments to VSA in
excess of $25,000 were to be for Senator Humphrey’s benefit, an Oc-
tober 21, 1971, memorandum from Sherman to Chestnut is pertinent.
Under the heading “Kansas and Oklahoma,” this memorandum reads :
We are going to be working in these states, as you know,
partially financed by AMPI. Both of these states were con-
tacted several months ago and to the best, of my knowledge
never involved HHH. If there is any inclination by these
governors to use the information for HHH, I am not aware
of it. Even if they were interested, it would not be where
you would invest that contribution. My point on this is : one,
when the original commitment was made to Governor Hall
and Governor Docking, there was, to the best of my knowl-
edge, no HHH involvement ; two. there is no indication that
Hall or Docking have been told that since then ; three, never
in Valentine’s conversation with Dave Parr was there a sug-
gestion on either side that, this was for HHH.
I don’t know how you can gracefully clear that up, but we
have an apparently firm arrangement to be paid by AMPI
for a part of those two states plus South Dakota. 50
This document clearly indicates Sherman’s belief that AMPI pay-
ments to VSA for Kansas and Oklahoma were not for Senator Hum-
phrey’s benefit. The memorandum, however, is susceptible of an in-
terpretation that Chestnut felt the AMPI payments for Kansas and
Oklahoma were to benefit Senator Humphrev’s campaign, perhaps
that the Senator would have the use of the VSA lists prepared for
those States. Chestnut asserted his Fifth Amendment privilege and
his testimony in this regard is not available.
H. The Preparation of Bogus Documentation; the Provision of
Useless Lists to AMPI by VSA
The evidence shows that, in March 1972. Valentine fabricated a new
set of invoices and letters between AMPI and VSA relating to the
services described above, along with another contract dated April 29,
1971. Lillv has testified that the creation of this bogus set of documents
came at Valentine’s initiative. But Valentine states it was Lilly who
49 This fact may explain Lilly's note that Nelson told him that $50,000 had been alio*
cated to Humphrey. Parr was questioned concerning his recollection of any commitment to
Humphrey as included within the AMPI money to be paid to VSA.
Sanders. Bo you recall that $50,000 was to go to Humphrey with only $5,000 of
it from TAPE?
Parr. I remember making a pledge for $50,000 but I don't know whether $5,000 was
to come from TAPE . . .
See. Parr. 15 Hearings 6860.
50 See October 21, 1971 Sherman to Chestnut memo, 25 Hearings 11877.
881
desired the fabrication to demonstrate the legitimacy of the expendi-
tures to the AMPI comptroller. 51
Valentine states he met with Lilly in December of 1971, at which
time Lilly said AMPI had no records to support an agreement between
the two firms. 52 Valentine says he was then given AMPI stationery
and that, in March 1972, Lilly called for the documentation saying he
was under pressure to get the lists for AMPI and close the deal. Val-
entine said he would furnish lists worth $137,000. However, according
to Valentine, the computer lists finally sent to AMPI contained only
one million names and were worth only $30,000. Lilly, however, told
Valentine that the quantity of names and the value of the lists did not
matter since his only interest was having something to show the comp-
troller. Valentine created the entire file by having the documents typed
by different employees and on different typewriters in his office. On
March 23, Lilly met with Valentine at the Minneapolis Airport and
together they signed the spurious documents. A series of twelve letters
was prepared.
Lilly states that he received seven tapes from VSA in February,
1972. Lilly did not even check to see if any data was contained on the
tapes. He testified that “I do not know what they represent,” and that
“[t]he names on the tapes . . . were never utilized.” 53 Lilly felt the
tapes had no genuine value. The AMPI official in charge of data proc-
essing, Robert Isham, testified that he does not know the purpose for
which the lists were acquired or any use of them by AMPI.
IT. SENATOR HUMPHREY’S SUPPORT FOR LEGISLA-
TION FAVORABLE TO MILK PRODUCERS, AND OTHER
CONTRIBUTIONS FROM DAIRY PRODUCER COOPERA-
TIVES
A. Summary
In 1971 and 1972, Senator Humphrey, who had been traditionally
supported by milk producers, received $17,225 from dairy producers’
trusts for his Presidential campaign. These contributions were in addi-
tion to $25,000 which went, to the benefit of the Humphrey campaign
from dairy cooperative corporate assets.
On March 25, 1971, the Secretary of Agriculture announced a price
support level for milk more favorable to dairy producers than the
support announced on March 12, 1971. Heavy Congressional pressure
was cited by the White House as one factor in the second decision. Sen-
ator Humphrey met with AMPI officials, spoke on the Senate floor to
urge an increase in the price support of milk, and introduced legisla-
tion on March 19, 1971, to mandatorily raise the level. Senator Hum-
phrey has stated that there was no relationship between his receipt of
dairy contributions and his support of the price increase legislation.
There is evidence that, beginning in 1949, Senator Humphrey has
consistently supported legislation favorable to the dairy industry.
61 Sherman stated Valentine told him that Lilly, for this reason, initiated the document
fabrication.
62 The June 10, 1971, contract between the two firms — which itself was a sham docu-
n t-— app ar en t! y had been forgotten. The bogus April 29, 1971. contract is Lilly exhibit
31. 14 Hearings 6193.
53 Lilly, 14 Hearings 6149.
882
B. Background
This committee has investigated the relationship between the milk
producer contributions to the President's campaign and the milk sup-
port price increase announced on March 25, 1971. The question at issue
is whether or not the increase was granted in return for or in anticipa-
tion of contributions.
The thrust of the Milk Fund investigation conducted by the
Select Committee has been predicated on the thesis that contributions
by dairy producers’ trusts (TAPE, CTAPE, SPACE, and ADEPT)
were made to induce a more favorable decision by the executive branch
of Government in respect to the level of governmental support for
the price of milk, or that such contributions were in fulfillment of a
commitment that they would be given in return for a more favorable
decision. It was on March 12, 1971, that the Secretary of Agriculture
announced that the price of milk for the 1971-1972 marketing year
would be supported by the Federal Government at approximately 80%
of parity. In the ensuing weeks many Congressmen and Senators spon-
sored legislation which would have forced the President to raise price
supports to a minimum of 85% (and even 90%) of parity. Support
for this mandatory legislation was predominantly Democratic; 125
members of Congress and 29 Senators introduced or co-sponsored such
legislation. The President met with representatives of the dairy indus-
try on March 23, listened to the merits of their case, and on March 25,
the Secretary of Agriculture announced an increase of support to
85% of parity.
A White Paper issued by the White House on January 8, 1974, 54
argued that intense Congressional pressure, in addition to the eco-
nomic merits and political considerations, was a factor in the Presi-
dent’s decision. Senator Humphrey admittedly was a strong advocate
of a price support increase in 1971 and introduced legislation to set
the minimum level at 85% of parity. During 1971 and 1972, Senator
Humphrey was first an unannounced and later an announced Presi-
dential candidate, and the dairy producers, as they had traditionally
done, provided substantial support to his Presidential campaign.
C. Senator Humphrey’s Action in March, 1971
Senator Humphrey, a Democratic candidate for President in 1971-
1972, was one of the legislators who supported the dairymen’s posi-
tion. On March 4, 1971, Senator Humphrey made a speech on the floor
of the Senate declaring himself in favor of a 90% level of support.
Tie said he contacted the Secretary of Agriculture on this. 55 He re-
iterated his position on March 9 and 10, and said he was again appeal-
ing to the Secretary of Agriculture. S. 1294, which would have man-
datorily raised the support for the price of milk to 85% of parity,
was introduced by Senator Humphrey on March 19, 197l. 56 George
Mehren, then consultant to AMPI, met with Congressmen and Sena-
tors, including Humphrey, to discuss the need for a price increase.
54 White Paper, 17 Hearings 8073.
65 Humphrey speech. 25 Hearings 11879.
56 See Senate bill, 25 Hearings 11880. Senator Humphrey’s bill was one of 30 similar
bills introduced in Congress in connection with the milk price level for the 1971-1972
marketing year.
883
According to Mehren, the object was to put pressure on the adminis-
tration. Senator Humphrey met with David Parr, assistant to the
general manager of AMPI, on February 23, 1971. Although Senator
Humphrey’s office provided copies of certain daily schedules for the
Senator, a committee request of April 17, 1974, for other documents
relating to this section has not been honored.
D. Contributions by Dairy Trusts to Senator Humphrey
Senator Humphrey was given $17,225 by the dairy trusts in 1971
and 1972. This consisted of $5,125 in 1971 and $12,100 in 1972. Twelve
thousand, five hundred dollars ($12,500) of these amounts was given
by TAPE and CTAPE (adjuncts of AMPI) . In addition, the Hum-
phrey campaign in 1971 received $25,000 in corporate contributions
from Associated Milk Producers, Incorporated by payment of bills of
Valentine, Sherman and Associates as detailed in another section of
this report. In all then, Senator Humphrey’s campaign received over
$40,000 from dairy cooperatives in 1971 and 1972. 57
III. LARGE INDIVIDUAL CONTRIBUTIONS TO THE
HUMPHREY CAMPAIGN BEFORE APRIL 7, 1972
A. Summary
Until April 7, 1972, it was illegal under Federal law for anyone,
with certain possible exceptions discussed below, to give more than
$5,000 in any calendar year to a Presidential candidate, or to any na-
tional level campaign committees operating in his behalf. More than
one-half million dollars was contributed to the Humphrey Presiden-
tial campaign in 1971 and in 1972 (up to April 7) in the form of indi-
vidual donations in excess of $5,000. These donations were not sub-
divided among multiple committees.
The evidence shows that three types of entities operated as pre-
April 7, 1972 campaign committees in the Humphrey Presidential
campaign for the receipt of individual campaign contributions in
excess of $5,000. These three types of entities were :
(1) A Partnership . — Jackson & Co., a limited partnership,
received four individual contributions of stock each of which was
$86,000 or more and sold the stock, distributing the proceeds to
Backers for Humphrey, a Presidential committee.
57 The contributions by cooperative political trust and date in 1971 and 1972 were :
SPACE (Dairymen, Inc.) :
April 24, 1972 $1,000
September 25, 1972__. ___________ 2,500
Total .____ 3, 500
ADEPT (Mid-America Dairymen, Inc.) :
February 4. 1971 125
April 21, 1972 ________ 1, 000
September 5, 1972_ * 100
Total 1 OOP;
T APE/CT APE ( AMFT) :” ~ ~ ~ ~ ~
December 3, 1971 5,000
April 6, 1972 1,000
May 5, 1972 — 4, 000
August 16, 1972 — 2,500
Total .____ : 12,500
Grand total 17, 225
See Keema affidavit, 17 Hearings 7959-68.
884
(2) Formal Humphrey Campaign Committees. — Backers for
Humphrey, the principal pre-April 7, 1972 Humphrey Presiden-
tial campaign committee, received a number of individual con-
tributions of money in excess of $5,000 each. Backers for Hum-
phrey was also the recipient of the proceeds from the four sales
of stock by Jackson & Co., which alone exceeded $360,000. In addi-
tion, other Humphrey campaign committees operating on behalf
of his Presidential campaign received contributions in excess of
$5,000, including Volunteers for Humphrey and Humphrey for
Senator Committee, which were used in 1971 and early 1972 for
Humphrey’s Presidential campaign.
(3) A Trust Account. — A trust account maintained by the in-
corporated law firm of Humphrey’s campaign manager, Jack
Chestnut, received a contribution in excess of $5,000 — a purported
personal loan of $100,000 from Paul Thatcher, Treasurer of Back-
ers for Humphrey.
Aside from Thatcher, the major sources of the donated funds
discussed • above were a group of three individuals, including
Dwayne Andreas, a Minnesota businessman, and a “blind trust”
operated for the benefit of Senator Humphrey by its trustee,
Andreas.
Months of delay were encountered in obtaining production of
records from Minneapolis banks. Humphrey campaign financial
records pre-dating April 7 were destroyed by Chestnut, and
Chestnut has invoked the Fifth Amendment privilege, against
self incrimination when subpoenaed to testify under oath. Under
circumstances described in Section I above, Senator Humphrey
declined a request to be interviewed. 58 A request for documents
from his office has not been fully met.
B. Introduction
Until April 7, 1972, it was a felonious violation of Federal law for
any person to make a political contribution in excess of $5,000 during
any calendar year to a Presidential candidate or to any national cam-
paign committees operating on his behalf (18 USC 608). 59 This law,
which is not known to have been the basis for any criminal prosecu-
tion, was repealed by Section 203 of the Federal Election Campaign
Act of 1971 (Public Law 92-225) ; however, its applicability before
58 See attachment No. 1, p. 899. It is Senator Humphrey’s position that the requests in
the Ervin letter were limited to the Valentine, Sherman letter.
Be Section 608. Limitations on political contributions and purchases :
(a) Whoever, directly, or indirectly, makes contributions in an aggregate amount in
excess of $5,000 during any calendar year, or in connection with any campaign for nomi-
nation or election, to or on behalf of any candidate for an elective Federal office, including
the offices of President of the United States and Presidential and Vice Presidential electors,
or to or on behalf of any committee or other organization engaged in furthering, advancing,
or advocating the nomination or election of any candidate for any such office or the suc-
cess of any national political party, shall be fined not more than $5,000 or imprisoned not
more than five years, or both.
This subsection shall not apply to contributions made to or by a State or local committee
or other State or local organization or to similar committees or organizations in the Dis-
trict of Columbia or in any Territory or Possession of the United States.
* * * * * * *
(c) In all eases of violations of this section by a partnership, committee, association,
corporation, or other organization or group of persons, the officers, directors, or managing
heads thereof who knowingly and willfully participate in such violation, shall be punished
as herein provided.
(d) The term “contribution”, as used in this section, shall have the same meaning pre-
scribed by section 591 of this title.
885
April 7, 1972, during 1971 and the early months of 1972, was one rea-
son why some of the Presidential candidates engaged in the practice
of constituting multiple committees. By having a host of such com-
mittees available for the receipt of contributions, a wealthy donor
could divide a large contribution into $5,000 increments to each of
such committees and thus avoid the applicability of Section 608. An-
other consideration, of course, was the gift tax law which requires the
payment of a tax on any donation to a political committee in excess
of $3,000. Because of the joint applicability of Section 608 and the gift
tax law, donors customarily subdivided their contributions into $2,500
allotments, togetfer with a $2,500 donation from a spouse.
C. Background
The Presidential campaign of Senator George McGovern, 60 and the
Finance Committee To Re-Elect the President each eventually con-
stituted hundreds of committees to circumvent the provisions of these
laws. Indeed, it was Section 608 which initially caused such intense
concern and difficulty for the Committee To Re-Elect the President
(CRP) and the Associated Milk Producers, Inc. (AMPI) in managing
the dairy producers’ contributions to CRP. The $100,000 which AMPI
gave to Herbert Kalmbach in 1969, apparently for the benefit of the
President’s re-election, was belatedly recognized as being in violation
of Section 608. Because of a desire for secrecy, the officials of AMPI
contrived an elaborate system of repaying the $100,000 which had
been taken from their political action trust. An official of AMPI made
a personal bank loan to repay the sum, then repaid the loan with funds
he obtained from AMPI attorneys and consultants, who appear to
have obtained reimbursement by increasing their billings to AMPI.
Still later, the AMPI political action trusts, TAPE and CTAPE, were
confronted with the need for a great number of committees functioning
on behalf of the reelection effort for President Nixon, and the reelection
campaign officials encountered many difficulties in constituting enough
committees to receive subdivided contributions.
The Humphrey campaign officials did not make the effort to create
numerous committees. An examination of bank records has revealed
evidence and led to other documentary disclosures which show that
several donors to the Humphrey Presidential campaign made vei'y
large contributions to but one campaign entity, seemingly (1) in dis-
regard of the strictures of Section 608, (2) in ignorance of Section 608,
or (3) with some understanding that their contribution constituted
an exception. 61 Well over one-half million dollars was infused into the
Humphrey campaign shortly before April 7, 1972, in the form of
individual contributions in excess of $5,000. Senator Humphrey also
60 See, e.g., executive session testimony of Marian Pearlman, 25 Hearings 12173, and
Miles Rubin, 25 Hearings 12137.
61 Section 608(a) exempts by its terms contributions to a “State or local committee
or . . . organization or to similar committees or organizations in the District of Colum-
bia.” The question arises as to the scope of this exemption which was added on the floor of
Congress in 1940 and made part of amendments to the Hatch Act. Thus, the question arises
as to what is a “state or local” committee that is “engaged in furthering . . . the nomina-
tion or election” of a candidate for the office of President. There appears to have been no
prosecution relating to contributions in excess of $5,000 at least in part, according to the
Department of Justice, because of the ambiguity of the exemption. It should be noted that
FCRP established numerous campaign committees which were organized in the District of
Columbia, which banked in the District of Columbia, and which had officers who lived or
were employed in the District of Columbia, to receive multiple contributions from indi-
viduals as well as organizations such as TAPE (which are not subject to gift tax). .
886
utilized assets from a “blind trust”— which he had created in 1965— to
provide two separate sums of $23,000 and about $86,000 of his own
money to his own campaign in January and February of 1972.
As of April 7, 1972, it became unlawful for a Presidential candidate
to use personal funds in excess of $50,000. Prior to that time, the only
limitation on contributions was found in Section 608. There have been
no prosecutions under this section with respect to a candidate’s con-
tributions to or expenditures for his own campaign, and the committee
knows of no construction of the section applying it to a candidate’s
use of his own funds.
D. The Humphrey Presidential, Campaign Takes Form — Hum-
phrey V olunteer Committee ; Friends of Humphrey Committee
A formal announcement of Presidential candidacy was not made by
Senator Humphrey until January 10, 1972. Activity in contemplation
of a Presidential campaign had begun by Senator Humphrey and by
others on his behalf in 1971 and his interest in the Presidency was
widely reported. For example, in the fall of 1971, a selected number of
persons were invited to meet in Minneapolis with Senator Humphrey
and his top campaign personnel. At this function, many of these indi-
viduals committed themselves to a certain level of contribution to the
Senator in the event he announced his candidacy. (Officials of A MPT
stated at that time their organization would be committed to the ex-
tent of $50,000.) During 1971, some bank accounts were opened in
Minnesota by the Humphrey campaign organization, and although
they did not bear a title to readily reflect their relationship to a Presi-
dential campaign (Humphrey Volunteer Committee; Friends of Hum-
phrey Committee) , checks were drawn on these accounts to pay Presi-
dential campaign expenses. 62 These accounts were closed just prior
to April 7, 1972.
E. Humphrey for Senator Committee — Continued Use
The Humphrey for Senator Committee 63 which had been utilized
for Senator Humphrey’s Senatorial campaign in 1970, was continued
as an active account by the Humphrey organization into 1972. It was
used to pay Presidential campaign expenses, $50,000 was deposited to
it as late as February 28. 1972, and it w T as closed on April 10, 1972,
three days after the effective date of the Federal Election Campaign
Act of 1971. S. Harrison Dogole, a financial backer of Senator Hum-
phrey, wrote three checks which were deposited to the committee’s ac-
count in the total amount of $85,000 ($10,000 on May 21, 1971 ; $25,000
on July 26, 1971: and $50,000 on February 28, 1972), although the
July 26 check was payable to Volunteers for Humphrey. 64
F. Use of the Chestnut Law Firm Trust Account
Presidential campaign expenses were also paid by checks written
on the Minnesota bank account of a trust maintained by the incor-
porated law firm 65 of Humphrey’s campaign manager, Jack Chest-
62 A $25,000 deposit to the Humphrey Volunteer Committee on April 20. 1971, and a
$10,000 deposit to the same committee on June 25, 1971, were in cash. See “Humphrey
Volunteer Committee” deposits, 25 Hearing s 11881.
® Jack Chestnut was Treasurer of this Committee and signator of the bank account.
64 Dogole checks, 25 Hearings 11883.
05 Chestnut, Brooks, and Burkhard of Minneapolis, Minnesota.
887
nut. For example, trust account funds were used to make a $25,000
payment to Valentine, Sherman Associates for computer work for the
Humphrey Presidential campaign. 66 These expenditures were funded
in January of 1972 by a $100,000 check deposited to the Chestnut
trust account and drawn on the personal checking account of the
Humphrey organization treasurer, Paul Thatcher. 67 Chestnut then
paid Presidential campaign expenses by drawing checks on this law
firm trust account.
A few weeks later, on January 31, 1972, the Chestnut trust account
issued a check for $100,000 to Thatcher individually, apparently in
repayment of what appears to have been a $100,000 loan to the
campaign. 68
G. Backers of Humphrey Committee — Jackson and Company^
The Chestnut law firm trust account was enabled to make this re-
payment to Thatcher because of the receipt of a $100,000 check 69 on
the same day (January 31, 1972) from Backers of Humphrey, a Hum-
phrey campaign committee which had just been constituted that
month, 70 and which appears to have been a major pre-April 7, 1972
committee. Backers was organized in Minnesota, its officers ( and can-
didate) were from Minnesota, and it banked in Minnesota. However,
it supported a candidate for national office, its officers — Chestnut and
Thatcher — were the national campaign officers, and it both received
contributions from outside the State and expended money outside
the State for national campaign purposes. It had a maximum bank
balance of $101,000, total deposits of $674,063, and was closed on
April 12, 1972. 71 It was undoubtedly the committee which received
the greatest infusion of funds before April 7, 1972. $471,725 of the
receipts of Backers of Humphrey were transferred from Jackson and
Company, a partnership established by the campaign primarily to
process the sale of stock contributions. 72
88 See January 11, 1972 Chestnut check, 25 Hearings 11886.
e lSee January 11, 1972 Thatcher check, 25 Hearings 11887.
68 See January 81, 1972, check to Thatcher. 25 Hearings 11888. (A contribution is de-
fined. for the purposes of Section 608, as including a loan.)
69 See January 31, 1972. “Backers” check, 25 Hearings 11889.
70 Chestnut and Thatcher were authorized shrnators on the account of Backers of
Humphrey. Thatcher signed the January 31, 1972 check for $100,000. Thatcher, indi-
vidually, donated $50,000 to Backers of Humphrey on March 7, 1972. See Backers deposit
slin dated March 7, 1972, and Thatcher check dated March 1972, 25 Hearings 11890.
71 See “Backers” authorization card and bank statements, 25 Hearings 11892.
72 Thatcher and LaDonna Hagan were partners in this entity. Although Thatcher stated
during an early interview that the partnership was created to process stock contributions,
investigation revealed that more than $50,000 was received by Jackson and Company in
the form of donors’ checks, mostly in the amounts of $5,000. Jackson and Company appears
to have functioned as a conduit for these contributions. The funds were forthwith trans-
ferred to Backers of Humphrey, although the checks were actually payable to various
other committees. Some of these transactions were :
Samuel Rothberg issued a $5. 000* check to Friends of Humphrey Committee dated.
February 24. 1972. and a $5,000 check to the District of Columbia Committee for Humphrey
dated February 25. 1972. Both checks were deposited to Jackson and Company on Feb-
ruary .-28. 1972, and on the same date $14,925 was transferred by Jackson and Company to
Backers of Humphrey. See March 14, 1974, Walters letter, 25 Hearings 11897.
M. Phillips and J. Phillips issued cheeks for $5,000 and $10,000 respectively, to the
Humphrey campaign. They were deposited to Jackson and Company on February 29, 1972.
and on the same day $15,000 was transferred bv Jackson and Company to Backers of
Humphrey. See March 20, 1974, Walters letter, 25 Hearings 11903.
Garrett G. Carlson wrote one $5,000 check to each of the following five committees, all
dated March 24, 1972 : National Humphrey for President Committee, National Humphrey
Volunteer Committee, National Citizens for Humphrey Committee, National Draft
Humphrey Committee, and National Humphrey Friends Committee. However, they were
HI deposited to the Jackson and Company account on March 27. 1972 ; and on the same date
Jackson and Company transferred $35,000 to Backers of Humphrey. See April 8, 1974
Walters letter, 25 Hearings 11907, re Jackson and Co. See executive session testimony of
Ben E. Fellows, 25 Hearings 11765.
888
H. Archer-Daniels-Midland Shares Contributed — The Humphrey
“Blind Trust” 73
The predominant portion of funds transferred to Backers of Hum-
phrey from Jackson and Company came from the sale of shares in
Archer-Daniels-Midland Company (ADM), the firm headed by
Dwayne Andreas. 74 These shares were aggregated from the donations
of Dwayne Andreas, Sandra A. McMurtrie (Andreas’ daughter),
Doris Hastings (an Andreas friend in Florida), and the Humphrey
“blind trust” created in 1965 and for which Andreas served as trustee.
The total number of shares thus contributed to Jackson and Company
in December of 1971 was 10,500 (3,000 shares from McMurtrie and
2,500 shares from each of the others). 75 The stock was sold between
January 17 and 24, 1972, at around $35 per share to produce a total
net receipt of $362,046,30. 76 Thus, Andreas and Hastings each donated
about $86,000; McMurtrie about $104,000; and Senator Humphrey’s
blind trust about $86,000. 77 In three installments ($150,000 on Janu-
ary 31, 1972; $40,000 on February 4, 1972; and $166,800 on Febru-
ary 10, 1972) , Jackson and Company transferred $356,800 to Backers
of Humphrey. 78 Soon thereafter, Backers transferred $80,000 to a
Humphrey for President account in the National Bank of Washing-
ton, D.C. ($50,000 on January 31, 1972, and $30,000 on February 16,
1972) , 79 At least to this extent Backers of Humphrey appears to have
been serving as a conduit for the Washington, D.C. committee.
The Humphrey blind trust transferred an additional $23,000 to the
Humphrey campaign in February of 1972“ This sum came from funds
on deposit in a savings account of Interatah and Company, a limited
partnership acting as nominee or agent for the trust. At the direction
of Dwayne Andreas, Interatah and Company issued its check for
$23,000 to Backers of Humphrey on February 15, 1972. a
I. Affidavits of Andreas, Hastings, McMurtrie
Andreas, Hastings, and McMurtrie have submitted affidavits con-
cerning their individual contributions, and Andreas has submitted an
affidavit in his capacity as trustee for Senator Humphrey. 82 The indi-
viduals’ affidavits are in virtually identical language. They each state
73 A “blind” trust is a trust in which the trustee exercises his powers in a manner so that
the beneficiary does not become knowledgeable of the investments held and managed. Legis-
lators make use of this device to preclude suggestions that their legislative decisions and
other official actions are influenced by their financial holdings.
74 Archer-Daniels-Midland is the largest domestic soybean processor and one of the largest
U.S. flour millers, operating in many states and foreign countries and producing more than
400 agricultural products. Andreas was also Chairman of the Board of First Interoceanic
Corp., now Independent Bancorporation, a bank holding company in which Paul Thatcher is
the Executive Vice President. Independent Bancorporation is a wholly owned subsidiary of
Archer-Daniels-Midland.
75 See Walters/Dash correspondence, 25 Hearings 11918.
78 See confirmations on sale of Archer-Daniels-Midland stock, 25 Hearings 11929.
77 Counsel for Senator Humphrey on March 26, 1974 gave Select Committee counsel a
brief view of a copy of a gift tax return for Senator Humphrev, executed in August of 1973.
The return showed the gift of $91,000 from the sale of stock. He did not produce returns for
Hastings, Andreas, and McMurtrie as he had offered to do, perhaps because committee
counsel would not agree to his pre-condition that no use or disclosure would be made of
them, but stated that such returns existed.
78 See “Backers” cheeks and deposit tickets, 25 Hearings 11939.
79 See “Backers” transfer of funds, 25 Hearings 11945.
80 Counsel for Senator Humphrey, also on March 26. 1974, gave Select Committee counsel
a brief view of a copy of a gift tax return for Senator Humphrey, executed in August of
1973. showing a gift of $23,000.
81 See Interatah check and deposit to “Backers”, 25 Hearings 11947.
82 See Walters/Dash correspondence, 25 Hearings 11918.
889
that the affiant donated Archer-Daniels-Midland stock to the Hum-
phrey campaign in December of 1971 and that it was delivered to
Jackson and Company as agent for the purpose of converting it to
cash and distributing the proceeds “as directed by various Humphrey
committees.” The affidavits recite that the ADM stock was contributed
voluntarily, was a part of the affiants’ personal estate, and that the
affiants did not act in the name of, or as conduits for, any other party.
The affidavits of Hastings, McMurtrie and Andreas (as an indi-
vidual) do not deal with such questions as how the ADM stock was
acquired by Hastings and McMurtrie, how they came to make virtually
identical, substantial and almost simultaneous contributions, the role
of Archer-Daniels-Midland in these events, or the role of Andreas
with respect to the Hastings and McMurtrie contributions, to whom
or which committee they understood the contribution would go,
whether Section 608 or gift tax laws were considered and, if so, how. 83
Andreas’ affidavit as trustee for Senator Humphrey avers that the
Trust was established by Senator Humphrey and was funded by his
personal assets “in which no other person had any interest.” Continu-
ing, he states that in December of 1971, Senator Humphrey requested
“that appropriate distributions be made from the assets of the Trust
for the benefit of his campaign,” so Andreas delivered 2,500 shares
of ADM stock to Jackson and Company as agent for the purpose of
converting the stock to cash and “distributing the proceeds to various
Humphrey committees.” Andreas states that the stock was a part of
the Trust’s assets and that he did not act, in the name of any party
except as trustee for Senator Humphrey. In February of 1972, again
as trustee for Humphrey, Andreas distributed $23,000 to the Hum-
phrey campaign from funds on deposit in a savings account in the
name of Interatah and Co. acting as nominee or agent for the Trust.
Andreas avers that the $23,000 was a part of the Trust’s assets and the
property of Senator Humphrey by virtue of his beneficial interest in
the Trust. 84
In response to a committee request for data concerning additions to
the trust of Senator Humphrey during 1971 and 1972, Senator
Humphrey’s attorney provided affidavits from accountants who have
reviewed relevant financial records which showed that the only ad-
ditions to the trust came from Senator Humphrey’s own funds. 85
As previously noted Senator Humphrey (or his trustee) appears to
have paid gift tax on these political contributions. Senator Hum-
ph rev’s attorney has advised the committee that the gift tax was paid
out of an abundance of caution. As to the relevance of Section 608,
83 Subsequent to the receipt of affidavits. Counsel for the donors advised the Committee
that the donors intended to have their Archer-Daniels-Midland stock contributions sub-
divided into multiple committee contributions of $5,000. However, the Committee is not
aware of the existence of a sufficient number of Humphrey campaign committees at that
time to receive the contributions in units of $5,000 or less.
84 See Walters/ Dash correspondence, 25 Hearings 11918, Although the cover letter of
Mr. Joe A. Walters transmitting the affidavits asked that the identities of the affiants be
kept confidential, Andreas is well known as a wealthy contributor to political campaigns ;
and persons of probable affinity to Hastings and' McMurtrie are listed in a publication of the
Citizens’ Research Foundation as contributors to Democratic committees. A Lawrence
Hastings of Miami Beach is publicly reported as donating $2,000 to McGovern. A William
McMurtrie of the same address as Sandra McMurtrie is shown to have donated $5,000 to
the Democratic National Committee.
85 See Tang and Devillier affidavits, 25 Hearings 11949. At the same time Senator
Humphrey’s attorney advised the Committee (by letter of July 2, 1974) that the trust
“acquired the ADM stock on November 10, 1969.”
890
that statute has never been construed by the courts and, in any event,
the committee is aware of no authority that it has any applicability to
a candidate’s contribution to or expenditure for his own campaign.
J. Chestnut Interviews
When subpenaed to testify under oath on April 11, 1974, Hum-
phrey’s campaign manager Jack Chestnut invoked his fifth amend-
ment privilege against self-incrimination and refused to testify. 86
When he had been interviewed without oath on October 18, 1973, 87
before most of the above information was developed by this committee,
he most of the above information was developed by this committee, he
said he had no knowledge of any donors who desired anonymity, nor
of any contribution of $1,000 or more by a third party so as to protect
the identity of the true donor. He stated then that the Humphrey
campaign public disclosure of contributors did not withhold the iden-
tities of any persons who had asked for anonymity. 88 Chestnut told
the committee staff he “coidd not be sure” of the identity of any Min-
neapolis bank depositories for the Humphrey campaign. 89
In fact, he had been an authorized signator on the Minneapolis
bank accounts of the Backers of Humphrey Committee, Humphrey
Volunteer Committee, Friends of Humphrey Committee, Telephone
Account, and Humphrey for Senator Committee, as well as the treas-
urer for this last committee. And he made no mention of the use of
his own law firm trust account as campaign depository.
K. Investigative Deuays
The documentary evidence concerning the large contributors to the
Humphrey campaign in early 1972 was pieced together from an ex-
amination of the records of numerous bank accounts uncovered as a
result of a staff examination of the records of Valentine, Sherman
Associates, a Minneapolis firm specializing in computer services for
political campaigns. The firm had received corporate contributions
for the benefit of the Humphrey campaign account. This discovery
of the bank accounts and the acquisition of records was not accom-
plished until well into 1974. Many delays were encountered in produc-
tion of records in compliance with subpoenaes. 90 After tentative agree-
ment in conference with the donors’ counsel, he took more than four
weeks to furnish the identities of Andreas, Hastings, and McMurtrie
88 Chestnut, 17 Bearings 7700.
87 Chestnut, 25 Bearings 11719. ^
88 Senator Humphrey’s own contributions through the Trust of more than $100,000 were
not included in the public disclosure of March 14, 1972 as reported by the Citizens' Research
Foundation listing of “Political Contributions of $500 or more Voluntarily Disclosed by
1972 Presidential Candidates.” Andreas is listed at only $75,000 ; Dogole at only $50,000 ;
and Thatcher at $25,000. In addition to contributions already set forth herein, Andreas
contributed $15,000 to the “Humphrey Volunteer Committee” by check dated December 14,
1971, signed LaDonna Hagan. (See Andreas check, 25 Bearings 11953.) (Hagan also
served in the Humphrey campaign. She had a drawing authority on campaign accounts, was
an authorized signator for Interatah and Company, and was one of the limited partners of
Jackson and Company.) Ben Fixman contributed $37,499 to the Humphrey campaign in 1971
and is not listed in CRF. See Fixman checks. 25 Bearings 11956. CRF does not list
Garrett G. Carlson nor the Phillips mentioned herein. See footnote sub-section H, supra.
89 The questions and answers were :
Sanders. Were any Minneapolis banks used as depositories?
Chestnut. That is possible.
Sanders. Do you know the identities of any ?
Chestnut. I really could not be sure.
Chestnut, 25 Bearings 11729.
00 See committee memos re VSA, 25 Bearings 11960.
891
along with their affidavits. Chestnut’s refusal to testify under oath
when subpenaed on April 11, 1974 prevented the staff from obtaining
a full explanation of the campaign’s solicitation and handling of these
donations. As explained in section I above, in response to a committee
request, Senator Humhprey declined to meet with a member of the
committee for interview. 91
A committee letter to Senator Humphrey’s Administrative Assist-
ant dated April 17, 1974 asked for the production of various categories
of documents, one of which was communications with Jack Chestnut,
Paul Thatcher, and Dwayne Andreas in regard to the Presidential
campaign.
This letter was answered on May 23, but certain documents re-
quested have still not been produced. 82
L. Destruction or Financial Records
Virtually all of the Humphrey campaign pre-April 7 financial
records were destroyed by Chestnut in the summer of 1972. There was
no legal obligation to retain campaign financial records under the
law existing before April 7, 1972. However, such wholesale destruc-
tion necessarily raises a question of motive and propriety, as expanded
upon by Chairman Ervin in an exchange with Maurice Stans :
Senator Ervin. In other words, you decided that the right
of the contributors to have their contributions concealed was
superior to the right of the American citizens to know who
was making contributions to influence the election of the
President of the United States.
Mr. Stans. We did not evaluate it in those terms. We evalu-
ated it in the terms that it was the Congress of the United
States in 1925 that gave the option to a contributor to re-
main anonymous and that we had no right to give away his
anonymity.
Senator Ervin. Well, Mr. Stans, do you not think that men
who have been honored by the American people, as you have,
ought to have their course of action guided by ethical prin-
ciples which are superior to the minimum requirements of
the criminal laws?
Mr. Stans. I do not have any quarrel with that, but there
is an ethical question in whether or not I can take your money
as a contributor with an understanding on your part that
you are entitled to privacy in that contribution and then
go around and release the figure to the public.
Senator Ervin. Well, all the law said, as you construe it,
as your counsel construed it, was that you did not have to
make a public reporting of these contributions. The law did
not require you to destroy the records of those contributions,
did it?
Mr. Stans. Mr. Chairman, the law did not even go that
far. The law did not even require us to keep any records dur-
ing that period of time, on the advice of my attorney.
91 See attachment No. 1, p. 899.
02 See Gartner/Dash correspondence, 25 Hearings 11816.
892
Senator Ervin. But the law did not require you to destroy
the records you did keep ?
Mr. Stans. No, of course not. That would be a silly propo-
sition.
Senator Ervin. Well, do you think that men who exercise
great political power, as you exercised it and as a former
Attorney General of the United States was exercising it and
as other people engaged in this committee work, that they
ought to disregard ethical principles and say they have ful-
filled their full duty to the American people as long as they
keep on the windy side of the law ?
Mr. Stans. Senator, I haven’t said that and I would not
say it. I am saying that I think we have to balance one ethical
principle against another, the right of privacy of an indi-
vidual as against the right of the public to know.
The Congress has recognized that there is a problem. That
is why it passed a new law. There was no reason that I know
of why we should have anticipated the date that law was
effective. The Congress, Mr. Chairman, gave us 60 days after
the law was effective to operate under the old law*
M. Perspective and Disposition
The desire of wealthy political contributors to remain anonymous
has been long recognized as reasonable and justifiable. However, the
public right to know has been gaining ascendancy over the individ-
ual’s right to privacy in this respect. A statutory limitation on the
amount of an individual contribution, as well as on a candidate’s use
of personal funds, and stringent reporting requirements, undoubtedly
have value in reducing the potential for subtle and surreptitious
abuses.
On April 11, 1974, the United States Senate passed and sent to the
House of Representatives S. 3044, an Act known as the Federal Elec-
tion Campaign Act Amendments of 1974. By continuing in effect the
$50,000 limitation on the use of a Presidential candidate’s personal
funds — which first became effective on April 7, 1972 — S. 3044 expresses
the judgment of the Senate that the use of personal funds in greater
amounts might provide a breeding ground for abuse. Moreover, this
new Act will require any loan or advance from a candidate’s personal
funds to be evidenced by a written instrument fully disclosing the
terms and conditions. While the Federal Election Campaign Act of
1971 (which became effective April 7, 1972) 94 did not include any
limitation on the amount which could be given to a candidate’s cam-
paign (other than from the candidate’s own funds), and earlier stat-
utes had no effective limitations at all, Section 304 of S. 3044 will pro-
hibit contributions to a campaign in excess of $3,000. It will also be a
violation for a candidate to knowingly accept a contribution which,
when added to the sum of all other contributions from that donor,
03 Stans, 2 Hearings 755.
64 The facts reported herein have not been the subject of inquiry by the General Accounting
Office since they occurred before April 7, 1972, the date of commencement of GAO jurisdic-
tion. GAO audits reports reviewed many alleged violations, irregularities, and deficiencies in
the Humphrey campaign after April 7, 1972, some of which were referred to the Attorney
General and the Internal Revenue Service for consideration. These will not be restated or
reviewed. See* for example, executive session interviews of Ben E. Fellows, 25 Hearings
11765, and Joseph E. Cole, 25 Hearings 11787.
893
exceeds $3,000. Again, the Senate has thus expressed a collective judg-
ment that these limitations will serve some useful purpose in eliminat-
ing various kinds of abuses which can be inherent in a candidate’s
acceptance of larger contributions from any one individual.
IY. CONTRIBUTION FROM MINNESOTA MINING AND
MANUFACTURING COMPANY
A. Summary
Minnesota Mining and Manufacturing Co. (3 M) maintained a
secret cash fund for making political contributions, one source of
which was a European consultant who billed 3 M for services not
rendered. The consultant, by previous arrangement initiated by top
executives of 3 M, then remitted to 3 M his receipts from these billings.
In February of 1972, a Humphrey fund-raiser solicited a contribution
from an official of 3 M. The decision to provide financial assistance was
deferred until April of 1972 when ten 3 M officers each bought a $100
ticket to a Humphrey fund-raising affair. The ten individuals were
subsequently reimbursed from 3 M’s secret fund. 95
B. The Contribution
For many years the executives of Minnesota Mining and Manu-
facturing Co. maintained a fund for making political contributions.
Mr. Harry Heltzer became chairman and chief executive officer of 3 M
in 1970. At about that time he became aware of the existence of this
fund, although he did not learn precisely the mechanics of how cor-
porate money was channeled to it.
Wilbur Bennett, Director of Civic Affairs for 3 M, explained that
an agreement was reached with a European consultant whereby
the consultant would submit false invoices to 3 M for services when
actually no services had been rendered. The consultant was paid
by 3 M, and the item was accounted for as an ordinary business
expense. The consultant returned the payments to 3 M in the form
of cash which was kept under the control of 3 M executives. Specifi-
cally, it was maintained in the custody of Mr. Irwin Hansen, 3 M’s
Director of Finance. The established procedure for release of contribu-
tions from this fund was that the chief executive officer would give his
authorization on contributions recommended to him, and this would
be presented to Hansen who would then provide the authorized
amount of cash.
In February of 1972, the Humphrey for President campaign solicited
a contribution from Jerome Schaller, the Manager of Governmental
Relations in 3 M’s Washington, D.C. office, for a fund-raising dinner
to be held in Florida. However, in a letter to Patrick J. O’Connor, a
Humphrey fund-raiser, dated February 24, 1972, 96 Schaller declined
the request, stating that his 3 M colleagues felt that a similar affair on
behalf of Senator Humphrey would be held soon in Minnesota and
that they expected to be “. . . asked to contribute substantially at that
time.”
95 This section is principally based on affidavits of officers of 3 M, supplemented by staff
interviews.
96 See February 24, 1972, Schaller letter, 25 Hearings 11973.
894
An informal $100 per person affair for Senator Humphrey was
scheduled at the Radisson South in Minnesota on April 13, 1972.
Thereupon, Schaller wrote a memorandum to D. O. Opstad and W- M.
Bennett dated March 16, 1972,” to suggest that ten people in 3 M
contribute to the dinner. Schaller further advised that the “. . . price
makes the donation non-reportable.” Opstad referred the memoran-
dum to Mr. Bennett with a notation that Humphrey “. . . seems to be
well financed, but we may find it politic to support the Mpls
[Minneapolis] affair.”
Mr. Heltzer told the committee during interview that although he
does not recall seeing the March 16, 1972 memorandum from Schaller,
he does recall that Bennett informed him orally of the memorandum.
Upon approval of the contribution, Schaller wrote a memorandum to
Opstad and Bennett dated April 7, 1972 98 to advise that the checks
for the Humphrey fund-raising dinner were to be made out to the
“Humphrey Dinner Committee.” Bennett subsequently collected
$100 checks from ten different 3 M corporate officers, each of whom
attended the dinner and was reimbursed for the expenditure in cash
from the secret fund in Hansen’s custody. The contributors had the
understanding that the money had come from a company executive
fund. Bennett does not remember the names of the individuals who
made the $100 contributions ; however, he is certain that he, Heltzer,
and Schaller were not among the ten.
Bennett is uncertain in his recollection of the delivery of the $1,000
to the “Humphrey Dinner Committee.” Bennett indicated to the com-
mittee during interview that the ten $100 checks were given to an in-
dividual whose identity Bennett does not remember, who was handling
the tickets for the Humphrey fund-raising dinner. Bennett gave the
committee no indication that anyone in the Humphrey campaign was
aware of the corporate source of this contribution.
On October 17, 1973, the 3 M Corp. and Mr. Heltzer entered pleas
of guilty to misdemeanor violations of the Federal Corrupt Practices
Act, relating to the making of similar contributions to FCRP." The
basis of the charge was contributions which had been made from the
secret corporate fund to the Committee To Re-Elect the President. The
corporation was fined $3,000, and Heltzer was fined $500.
Y. CONTRIBUTION OF $50,000 BY JOHN L. LOEB, SR.
A. Summary
In May of 1972, in an effort to generate additional funds for the
California primary, Senator Hubert H. Humphrey met in New York
City with Mr. John L. Loeb, Sr., senior partner of Loeb, Rhoades,
and Co. (investment brokers) . Senator Humphrey personally solicited
a contribution from Loeb, and Loeb agreed to give $50,000. Senator
Humphrey’s campaign manager, Jack L. Chestnut, spoke with Loeb
to explain the financial condition of the campaign and according to
Loeb’s attorneys, they discussed “mechanics of the contributions.” On
the following day Chestnut called Loeb’s secretary, Arthur Griffiths,
97 See March 16, 1972, Schaller memo, 25 Bearings 11974.
93 See April 7, 1972, Schaller memo, 25 Hearings 11975.
99 See Report on Campaign Financing — Corporate Contributions.
895
to give him a list of committees for the contribution. Pursuant to a con-
ference with Loeb, Griffiths then asked some office employees of Loeb,
Rhoades, and Co. if they were willing to contribute to Humphrey and
to be reimbursed for such by Loeb.
Seven persons each wrote two personal checks in the amount of
$3,000 each, and one person wrote a check in the amount of $6,000, all
payable to Humphrey campaign committees, for a total of $48,000.
Griffiths transferred corresponding amounts from Loeb’s account to
the bank accounts of each of these persons and in addition, Loeb added
$2,000 in cash to make a total package of $50,000. This was handed to
C. Bruce Solomonson, Senator Humphrey’s son-in-law, who delivered
it to the Humphrey campaign comptroller, Paul Thatcher.
The next Humphrey campaign committee report to the General
Accounting Office, on May 24, 1972, listed these contributions as being
made by the respective payors on the checks, but the $2,000 in cash was
not reported until June 10, after the transaction had been called into
question by GAO. After some reports by the news media and inquiry
by GAO, letters were sent by Mr. and Mrs. Loeb to each of the recipient
campaign committees advising that the Loebs were the true donors.
Thatcher then notified GAO that the committee reports should be
amended to show Mr. and Mrs. Loeb as the true donors, each in the
amount of $24,000.
On April 7, 1972, a new Federal election law had become effective
making it illegal for any person to make a contribution in the name of
another, or to accept a contribution by one person in the name of an-
other. On May 31, 1973, Mr. Loeb entered a plea of nolo contendere
to violations of this election law (Section 440 of Title 2, United States
Code) and was fined $1,000 on each of three counts.
B. Senator Humphrey Meets With Loeb — The Solicitation
On May 10, 1972, Senator Humphrey met Mr. John L. Loeb, Sr. in
New’ York City for the purpose of soliciting financial assistance for
the Senator’s Presidential campaign. According to Paul Thatcher, the
campaign comptroller, several days before the meeting, someone on
the campaign finance committee suggested to him that he set up a meet-
ing between Humphrey and Loeb, who had been a supporter of Hum-
phrey for many years. Thatcher said he called Loeb and spoke directly
with him to make the appointment. Since Senator Humphrey’s sched-
ule anticipated that he would be in New York City on May 10, the
meeting was fixed for that time.
Although, as discussed in Section I above, Senator Humphrey de-
clined to be interviewed when requested by the Select Committee, 100
the staff had access to a report of an interview with him by the FBI on
May 17, 1973. Contrary to Thatcher’s account, the Senator advised the
FBI that lie contacted John Loeb, asked him to meet him in New York
City, fixed the date for May 10, and then met with Loeb on that date
in the Waldorf Astoria. Senator Humphrey spoke with Loeb alone
and told Loeb that he would be grateful for financial assistance. Loeb
gmU 1 h' would be of help but, according to Senator Humphrey, no de-
tails were mentioned. It was understood that Jack L. Chestnut, Senator
Humphrey’s campaign manager, would talk with Loeb.
100 See attachment No. 1, p. 899. It is Senator Humphrey’s position that the requests in
the Ervin letters were limited to the Valentine, Sherman matter.
35-687 0 - 74 - 58
896
In an unsworn staff interview on October 18, 1973, Chestnut stated
that he was in the company of Senator Humphrey with several other
persons in New York City on May 10, 1972. The group was in New
York City for campaign purposes. Senator Humphrey told Chestnut
that they would meet with Loeb. The group, which included C. Bruce
Solomonson, Senator Humphrey’s son-in-law, and Max Kampelman,
a Humphrey campaign advisor, went to a hotel suite which Chestnut
thought was Mr. Andreas’ where Senator Humphrey talked with
Loeb. According to Chestnut, he and Solomonson were in a different
room when Humphrey talked with Loeb, after which Senator
Humphrey called on him to explain the financial condition of the
campaign to Loeb. Chestnut told Loeb an immediate donation was
needed whereupon Loeb said he “would arrange for $50,000 to be
picked up tomorrow.” Although Chestnut said there was no discus-
sion of how the $50,000 would be accumulated, Loeb’s attorneys aver
that Senator Humphrey suggested Loeb speak with Chestnut “with
respect to the mechanics of the contributions to be made,” and that
“Mr. Loeb did so.” Furthermore, at the time of Loeb’s sentencing,
his attorneys complained to the Court that at Loeb’s meeting with
Senator Humphrey and Chestnut, “No one called the existence of
Section 440 to Mr. Loeb’s attention, or raised any question as to the
procedure which Mr. Loeb used.” 101
An FBI report of an interview with Loeb on May 8, 1973, reflects
that Loeb said that in meeting with Senator Humphrey on May 10,
1972, he agreed to be responsible for a $50,000 contribution to assist
Humphrey in the California primary. 102 Loeb said he desired anonym-
ity because he did not want to be known publicly as a wealthy donor.
Although Chestnut and Kampelman were in the Waldorf Astoria
suite at the time of Loeb’s conversation with Humphrey, they
were not privy to the conversation. When Loeb asked Humphrey,
“How shall I go about this,” Humphrey said the matter should be
discussed with Chestnut. Loeb then asked Chestnut to contact his
secretary, Arthur Griffiths.
Soon after the meeting Chestnut notified Thatcher that Loeb would
give $50,000 which should be picked up the next day in Loeb’s office.
C. Assembling the Contribution
The next day, May 11, Loeb asked Griffiths to find some office em-
ployees who would be willing to make a contribution to Humphrey.
Loeb said the device of making his contributions through employee
intermediaries was his own idea. Also during this day Chestnut called
Griffiths and told him that Loeb suggested he call and that Griffiths
should make arrangements for $50,000 to be given to Humphrey.
Chestnut gave Griffiths a list of the committees to receive the contribu-
tions and the two discussed the sum to be given by each contributor.
Griffiths contacted various persons to inquire if they were willing to
contribute to Humphrey and indicated to them that they would be
reimbursed. Several persons expressed a disinclination to contribute.
Griffiths accumulated fourteen checks for $3,000 each and one check
for $6,000 for a total of $48,000 from eight individuals. 103 Two thou-
101 See Fortas letter, 25 Hearings 11976.
102 Loeb’s attorneys advised the Committee that Loeb asked Humphrey how much he
wanted and Humphrey said $50,000.
103 Griffiths checks, 25 Hearings 11986.
897
sand dollars in cash was added by Mr. Loeb to make a grand total
of $50,000. 104 Griffiths arranged for the transfer of funds from Loeb’s
account to the accounts of the individual donors to reimburse them in
full for the checks they had written.
D. Delivery and Receipt or Contribution — Reports to GAO
Solomonson picked up the contribution from Loeb on May 12 and
delivered it to Thatcher in Washington, D.C. Upon opening the pack-
age, Thatcher found the checks and the $2,000 in cash. Thatcher
thought it was completely reasonable that Loeb had raised these funds
by soliciting other persons. The $2,000 in cash was given to Joseph
Cole to open a new account in California. The checks were given to
staff for routine handling.
On May 24, 1972, the Humphrey committees filed a report of receipts
and expenditures to the General Accounting Office as a required pre-
California primary report. The $48,000 contributions by check were
listed in the report, but not the cash. Curiosity of the news media was
aroused because of bank addresses shown for the donors, and GAO
initiated inquiries. Loeb spoke with counsel on May 31 and was ad-
vised of the provisions of the new law. On June 1, Mr. and Mrs. Loeb
wrote to each of the recipient committees to advise them that they
were the true donors. The next day, Thatcher filed an amended report
with GAO to reflect the Loebs as the true donors, each in the amount
of $24,000. 105 The $2,000 contribution of cash was not reported to
GAO until June 10, 1972.
E. Thatcher’s 1973 Conversation With Humphrey
Thatcher has stated that sometime in 1973, he met Senator Hum-
phrey on an airplane and told the Senator he was concerned and
upset because Loeb’s lawyers were advising Loeb to fight the charges
when they knew there was a clear case against him. Senator Humphrey
was concerned because Loeb was a friend of his and was having diffi-
culty due to a contribution to the Senator. Thatcher does not know
whether Senator Humphrey took any action after hearing Thatcher’s
view that Loeb should plead guilty.
F. Loeb’s Prosecution
Loeb was prosecuted for violations of the election law which went
into effect on April 7, 1972, which makes it a crime to make a contribu-
tion in the name of another person. 106 On May 31, 1973, he entered a
plea of nolo contendere to violations of section 440, title 2, United
States Code, and was fined $1,000 on each of three counts. He stated
to the court that he had no knowledge of the enactment of the new
law. 107
104 In conflict with this, in the FBI Report of an interview with Griffiths on July 18, 1972,
it is stated that Griffiths said Loeb gave a “$2,000 check” drawn on Loeb’s account. There is
no mention of a cash contribution by Loeb.
105 See Thatcher letter to GAO, GAO press release, and letter to Attorney General, 25
Hearings 11990.
100 See Information Filed Against Loeb. 25 Hearings 11995.
107 See Memo Against Prosecution, 25 Hearings 11907.
898
G. Status of the Matter
The Federal Election Campaign Act of 1971 made it mandatory
for every political committee to report the name of every contributor
of more than $100, and made it unlawful to knowingly receive a con-
tribution made by one person in the name of another.
Loeb’s attorneys averred in court that Senator Humphrey sug-
gested Loeb speak with Chestnut “with respect to the mechanics
of the contribution,” and that when Loeb agreed to give $50,000
“[n]o one called the existence of [the new law] to Mr. Loeb’s atten-
tion or raised any question as to the procedure.” Chestnut spoke with
Loeb; the next day Chestnut called Loeb’s secretary to furnish the
names of committees which would receive the donations and discussed
with the secretary the sums to be given by contributors.
The question may arise whether it would be reasonable for Chestnut
to expect Loeb to accumulate the grand total of $50,000 from so many
donors in just 1 day.
When called to testify under oath, Chestnut invoked the fifth
amendment, and Senator Humphrey’s office has not complied with a
committee request for records relating to Loeb.
899
Attachment No, 1 to Chapter 6, page 1 of 3 pages
CnHeb J&icdes Mortals
SELECT COMMITTEE ON
PRESIDENTIAL. CAMPAIGN ACTIVITIES
(rtlKiUwn TO I. DCS. U. t)D CONCAUS)
Washington. D.C. 20510
As you know the Senate Select Committee on Presidential
r- Campaign Activiti es is investigating various allegations
' concerning the employment -of corporate funds by Associated
Milk Producers, Inc., and others for the benefit of various
political candidates in the 1972 presidential campaign and
election. In this regard, we are Interested in obtaining
certain information and materials from you, of course, at
your convenience.
. While we know that your schedule is extremely tight, the
Committee would appreciate it if you would consent to
meet with members of our staff. Members of our staff will
be in contact with members of your staff in the very near
future.
Thank you in advance for your cooperation.
Sincerely^
Sam J. Ervin, Jr.
Chairman
C. TALMiSOCC. OAw J. OVWXTT. rVA.
. ihou»«. ha>*j t-ow/xj- r. w oaten. conn.
i. Mowroy*. k. mix.
040 1 cwhio. «i3 rrujy Oi?ectos
, ocncrrt cout « sij _
January 24, 1974
Hon. Hubert'H. Humphrey
Room 232 Old Senate
Washington, D.C.
Dear Senafyr Humphrey:
900
Attachment No, 1 to Chapter 6, page 2 of 3 pages
SAW J. n*VlM. /*-. N.C.. OMIKMUI
MOA»HO H. *AKCR. JR.. -TCN*.. VICE CHAIRMAN
Hi; * l/AN E. TALMAOGC. GA. EDW*PIB J. GURNEY. FLA.
r>*Mri- K. IMPUTE. HAWAII ICIVOI r. WCICKClt. JR.; '
j05E;-h m. mosto r a. n. mcx.
'TStnztcb JSAtxiaz Nanais
SELECT COMMITTEE ON
PRESIDENTIAL CAMPAIGN ACTIVITIES
Washington. D.c. 20510
February 7, 1974
Honorable Hubert H. Humphrey
232 Old Seriate Office Bldg.
Washington, D.C.
Dear Senator Humphrey:
This letter is intended as a follow-up to my letter to
you on January 24., 1974, and is designed to provide
certain specifics respecting the inquiries the Committee
wishes to make of you.
We have discovered evidence indicating that the sum of
$25,000.00 was paid with corporate funds by Associated
Milk Producers, Inc., to Valentine, Sherman and Associates
a computer firm, in partial payment of a debt owed to
that firm by your presidential campaign. There is
evidence indicating that Jack Chestnut, your campaign
manager, was aware of and instigated this payment.
Mr. Chestnut, however, denies any knowledge of this
event.
The Committee has absolutely no evidence indicating
that you had contemporaneous knowledge of this payment.
Nevertheless, to fulfill our mandate, under S. Res. 60,
we feel it necessary for a Committee member to speak
with you respecting these circumstances. There are
also certain records in your files that the Committee
wishes to examine and our staff will promptly contact
your staff to specify the records we would like to see.
A member of the Committee will shortly contact you
regarding these matters. We would appreciate it if
you could find time, at your convenience, in your busy
schedule to meet with a Committee member.
Thank you for your cooperation in these regards.
Sincerely,
cv-tT f
d ■ ^ M, .
Sam J. Ervin, Jr.
Chairman
901
Attachment No r 1 to Chapter 6,
page 3 of 3 pages
QlCmleb Percale
WASHINGTON. DA mil
February 20,. 1974
• n ‘Ui J..ERVTV K .
The Honorable Sam J. Ervin, Jr,
Chairman
Select Committee on Presidential
t Campaign Activities
United State a Senate
Washington, D. C. 20510
' >” v - '•
Dear Mr, Chairman: ^
Your letter of February 7 as a follow-up to your letter of January 24
has been received. It indicates that the Select Committee has dis-
covered evidence of a payment of $25, 000 with corporate funds by ; :
Associated Milk Producers, Inc. , to Valentine, Sherman and Associates,
a computer firm, in part- payment of a debt owed to that firm by a
volunteer committee supporting my bid for the 1972 presidential
nomination.
B'7Sp
1974 I' j
iIMBElTD iL'llJJ-
WASHINGTON, D. a j
Let me say that neither at the time of the alleged transaction nor
now do I have any knowledge concerning this particular matter. In
fact. It wasn't until just recently that 1 even heard there was any
contention that funds of Associated Milk Producers, Inc. , were paid
to the Computer firm and somehow credited to the receivables that the
firm had coming from the volunteer committee supporting my candidacy.
Because I know nothing about the transaction and have no recor^a In my y -
files relating to it, 1 see no point in inconveniencing any member of
your Committee to meet with me. XV - ■
Best wishes.
Sincerely,
tilWHilUTy ■ ’ sr
CHAPTER 7
The 1972 Presidential Campaign of Congressman Wilbur
D. Mills — Financial Elements
PREFACE
Congressman Wilbur D. Mills formally became a candidate for the
Presidency on February 11, 1972. Efforts on his behalf had begun in
early 1971. A committee entitled Draft Mills for President was consti-
tuted in the summer of 1971 by Mr. Charles Ward, an Arkansas busi-
nessman. Ward had conceived the idea of a draft, spoke with Mills
about it in June of 1971 to insure he had no objection, and in July
opened a campaign office in Washington, D.C. To permit contributions
of larger amounts to be subdivided, Ward also served as chairman for
committees named “Good Government” and “Sound Economic
Growth.” 1 2 He served the draft campaign actively until February of
1972, at which time the official structure of the Mills campaign was
created.
According to Ward, Draft Mills had receipts of about $200,000 from
July of 1971 to February of 1972. About 75 persons gave $1,000 or
more ; only a few donated more than $3,000. The General Accounting
Office records show that post- April 7, 1972 receipts were about $293,000.
This report reviews Congressman Mills’ support of legislation favor-
able to dairy producers, and dairy trust contributions to his campaign.
It also reviews monetary contributions and other benefits of substantial
value to the Mills campaign from corporate assets of Associated Milk
Producers, Inc., Mid-America Dairymen, Inc., Gulf Oil Corp., and
Minnesota Mining and Manufacturing Co.
The Select Committee made an effort to schedule an interview with
Congressman Mills. Letters were sent to him by Chairman Ervin on
J anuary 24, and on February 7, 1974?
Senator Ervin stated, “. . . we feel it necessary to speak to you . . .”
and “We hope that you, at your convenience, can find time in your
busy schedule to meet with a member of the committee.” 3 No written
reply was received, but on March 18, 1974, the attorney for Congress-
man Mills orally advised committee counsel that Congressman Mills
would meet with a committee Senator immediately after House action
on certain legislation. Congressman Mills’ counsel said Senator Ervin
would be notified of this by letter ; however, no such communication
1 From December of 1971 to March of 1972, at least 25 Mills campaign committees were
constituted apparently for the receipt of contributions to be subdivided in view of the gift
tax laws. See Mills Campaign Committees, 25 Hearings 12033.
2 See Attachment 1, p. 928.
a Ibid,
904
has been received. On a television appearance (NPACT) on April 1,
1974, Congressman Mills stated he was “unaware of what was going on
in the so-called Draft Mills.” I. * * 4
In April of 1972, Mr. Joseph Johnson became chairman of Mills for
President. 5 This became the principal campaign committee. During
February and March of 1972, Johnson did campaign work while on
the Congressional payroll of Congressman Mills; and for the preced-
ing 6 months, Johnson had worked in the Draft Mills project while
salaried by Associated Milk Producers, Inc. (AMPI). When called to
testify under oath on April 2, 1974, Johnson invoked the Fifth Amend-
ment privilege as one reason for refusing to answer any questions
concerning the 1972 Presidential campaign of Mills. Senator Tal-
madge, who chaired the committee session, sustained Johnson’s refusal
to testify on the basis of his privilege against self-incrimination.
Prior to April 7, 1972, the Federal law was ambiguous concerning
the necessity for Presidential candidates to file reports of receipts and
disbursements during the primary election period. Nevertheless, many
candidates made voluntary disclosures of the identities of their con-
tributors. Congressman Mills made no voluntary disclosure for the
period preceding April 7, 1972. 6 Thus, very little is publicly known
concerning the identities of Mills supporters before April 7.
The Federal Corrupt Practices Act of 1925 made it unlawful for
any corporation to make a contribution or expenditure in connection
with any election to any political office, or for any candidate, political
committee, or other person to receive any such contribution (Title 18,
Section 610). In addition to this prohibition, it is unlawful to pur-
chase articles of any description, the proceeds of which inure to the
benefit Of a political candidate or committee (Title 18, Section 608b).
Because of staffing and time limitations, the investigation of the
Mills campaign was not exhaustive.
I. CONTRIBUTIONS FROM ASSOCIATED MILK
PRODUCERS, INC.
A. Introduction
A corporation which gave a large measure of support to Congress-
man Mills’ Presidential campaign in 1971 and 1972 was Associated
Milk Producers, Inc. (AMPI). It consists of approximately 40,000
dairy producer members in the southwestern, central, and upper mid-
western States. Its headquarters are located in San Antonio, Tex. Be-
cause Federal statutes have forbidden the use of corporate assets for
political contributions, in 1969 AMPI established a trust to collect
moneys from participant-donors, almost entirely dairy farmer mem-
bers and AMPI employees, and to make political contributions. This
trust was named the Trust for Agricultural Political Education
(TAPE). In 1972, it was succeeded by CTAPE. 7 In addition to con-
* See Mills television appearance transcript, 25 Hearings 12070.
5 During an unsworn staff interview, Johnson said he became chairman as of April 7, 1972.
A “Mills for President” report to GAO indicates that Johnson became chairman in May of
1972. See “Mills for President” GAO Report, 25 Hearings 12072.
6 See “Political Contributors of $500 or more Voluntarily Disclosed by 1972 Presidential
Candidates,” published by Citizens’ Research Foundation, Princeton, N.J.
7 A more complete description of AMPI and TAPE, as well as of other dairy producers’
co-ops, may be found at the beginning of Chapter 5 of the Select Committee report on the
milk fund.
905
tributions of $55,600 from TAPE and CTAPE (and two other dairy
trusts), there is evidence that Congressman Mills’ Presidential cam-
paign received the benefit of up to $75,000 from corporate assets of
AMPI, $15,000 from corporate assets of another dairy cooperative
Mid-America Dairymen, Inc., and $40,000 in donations from mem-
bers, employees, and officers of AMPI, for a grand total of about
$185,000 from dairy producer sources. This is the equivalent of 38%
of his campaign revenues. 8
The benefit which the Mills campaign received from AMPI cor-
porate assets came in the form of cash, checks, goods, and services. This
section of the report sets forth the supporting details.
AMPI records, some of whidh might have been relevant to topics
of this report, were destroyed in March/April of 1971. According to
Tom Townsend, an AMPI official, after a private antitrust suit had
been filed against AMPI, he was instructed by David Parr, assistant
to the AMPI General Manager, to destroy records in the Little Rock,
Ark. office of AMPI relating, among other things, to political activi-
ties or contributions.
B. Contributions bt Political Action Committees — Mills’
Support of Legislation Favorable to Dairy Producers
1. SUMMARY
The Mills Presidential campaign received $55,600 from the trust
funds of TAPE, CTAPE, ADEPT, and SPACE. 9 Of this total,
TAPE and CTAPE (the adjuncts of Associated Milk Producers,
Inc.) gave $26,500. While Congressman Mills did not sponsor any milk
price support legislation in March of 1971, he was of assistance to
AMPI and its organized effort to pressure the Nixon administration
to grant an increase in the level of support for the price of milk, he
had numerous meetings with dairy producers and their lobbyists,
arranged a dairymen’s meeting with the Speaker of the House, sug-
gested Congressmen to be contacted as cosponsors of legislation, and
urged key officials of the Nixon administration to take action.
2. background
The milk marketing year begins on April 1. Each year before
April 1, the Secretary of Agriculture has a statutory obligation to fix
the level at. which the Government will maintain the price of milk.
On March 12, 1971, the Secretary announced a price support level of
$4.66 per hundredweight (about 80% of parity). The dairy producers
had been lobbying in the Congress and in the Department of Agricul-
ture in order to obtain a support level of at least 85% of parity. When
the March 12 decision became known, the dairy producers marshalled
their efforts in an attempt to obtain a statutory increase. They focused
8 See Higgins letter, 25 Hearings 12075. The Chairman of Draft Mills estimated pre-
April, 1972 receipts at $200,000. By letter of June 26, 1974, GAO advised that post- April 7,
1972 receipts of Mills for President were $266,408 (rather than $371,719 as published in the
GAO year-end summary). Other Mills committee receipts after April 7, 1972 were $26,787.
Thus total receipts approximated $493,000.
9 ADEPT, Agricultural and Dairy Educational Political Trust, is the trust fund of Mid-
America Dairymen, Inc. of Springfield, Mo. SPACE, Trust for Special Political Agricultural
Community Education, is the trust fund of Dairymen, Inc. of Louisville, Ky.
906
their attention on Capitol Hill, urging Congressmen and Senators
to sponsor favorable legislation for a two-fold purpose. They con-
ceived that a well-spring of legislative support could persuade the
administration to reverse its position, or failing that, such legislation
might eventually be enacted.
On March 25, 1971, the Secretary of Agriculture announced an in-
crease in the level of support to $4.93 per hundredweight (about 85%
of parity).
This committee has investigated the relationship between milk pro-
ducer contribution to the President’s campaign and the milk price
support increase announced on March 25, 1971. The question at issue
is whether or not the increase was granted in return for or in anticipa-
tion of the contributions. A White Paper issued by the White House on
January 8, 1974, argued that intense Congressional pressure, in addi-
tion to the economic merits and political considerations, was a factor
in the President’s decision.
3. SUPPORT FROM MILLS
The dairymen looked upon Congressman Mills as a foundation stone
in their project in Congress. He had been a consistent supporter of
legislation beneficial to farm and dairy groups. Bob Lilly, assistant
to the AMPI general manager, testified that Mills was a significant
and important person to have on their side in getting a price support
increase. Mills declared his position and suggested other Congressmen
who should be contacted to become cosponsors of legislation. Tally said
they were successful in inducing a number of Congressmen to urge
the executive branch to declare an increase.
Dr. George Mehren (who became AMPI general manager in 1972
and who previously was an AMPI consultant) testified that AMPI
worked with Mills for the dissemination of data to other Congress-
men and to assess the chances of enactment of favorable legislation.
Mehren’s calendar shows he met with Mills on March 16, 1971. Mehren
testified as follows :
Sanders. With respect to the March 1971 price support
decision, could you elaborate for me on your work in gen-
erating support on Capitol Hill?
Mehren. It was a very limited activity ... I would say
that I talked maybe to five or six people ... I think I
talked with Wilbur Mills repeatedly ... I talked with
Senator Humphrey on occasion. . . , 10
In February, 1971, officials of the Department of Agriculture and
White House iiaison were called to Speaker Albert’s office to meet with
the Speaker, Congressman Mills and dairy producers. Mehren said
this was initiated by Mills. The purpose was to communicate to the
Secretary of Agriculture and to congressional liaison of the Repub-
lican administration the importance of the requested price adjustment.
Tom Townsend, an AMPI employee working under the supervision
of David Parr, an AMPI official, said he (Townsend) personally con-
tacted Congressmen to urge action on a price increase, and he had
10 Mehren, 16 Hearings 7317.
907
conversations on the matter with Congressman Mills. Townsend was
present at the Albert-Mills meeting. Of it, he said : “Chairman Mills
and the Speaker got together and asked somebody from the White
House, a liaison man, to come up at a meeting in Speaker Albert’s
office.”
Sanders. What, if anything, did Chairman Mills and
Speaker Albert represent to AMPI that they were personal-
ly willing to do for the dairymen ?
Townsend. Well, I think, lend support to the bills that were
being introduced ... he (Mills) would try to be helpful
in terms of advising the administration and other Members
of Congress to generate support. 11
The question was put to Mr. Harold Nelson, AMPI general manager
until January, 1972, “Now you mentioned . . . contact with various
Congressional leaders . . . was also part of the strategy in early
1971 to obtain a milk price-support increase . . . With whom did you
meet?” Nelson testified, “I met with Wilbur Mills and — as I recall —
and this can be wrong — I may have met with Chairman Poage. . . . 12
Congressman Mills’ attorney advised committee counsel that Con-
gressman Mills has had frequent meetings with David Parr of AMPI.
Congressman Mills was asked to furnish logs and calendars for the
February-March, 1971 period. His attorney stated that such docu-
ments have not been maintained. In his April 1, 1974 television appear-
ance (NPACT) , Congressman Mills was asked by the moderator about
the willingness of the milk industry to contribute so substantially to
his Presidential campaign. He responded, “I did talk to (George)
Shultz generally about it (price increase) . I met in the Speaker’s office
one time with Clark MacGregor when he was in the White House. But
the Speaker and I didn’t do the talking. The people that we had asked
Clark to come to hear did the talking. Namely, the dairy farmers them-
selves. . . .” 13 Congressman Mills’ attorney also advised that Mills
had one conversation with Connally about the milk increase, the
purpose of which was to make sure the President was aware of the
facts.
In testimony given to the Select Committee, John Connally said he
had a number of conversations with Mills between March 12 and
March 25, 1971, about milk legislation: “I do know that Chairman
Mills talked to me about it several times ” 14
According to the White House white paper, 15 the records of Clark
MacGregor, Presidential counsel, show that Congressman Mills urged
him on at least six occasions in February and March of 1971 to urge
the President to raise the support price. MacGregor has described the
contacts to the Select Committee staff as “vigorous lobbying.” Con-
gressman Mills telephoned George Shultz, then Director of the Office
of Management and Budget, on March 4, 1971, “to push for a prompt
decision.” 16 Mr. Shultz’ telephone log also shows he was called by
Chairman Mills on March 8.
11 Townsend, 16 Hearings 7120.
12 Nelson. 15 Hearings 6555.
13 See Mills Television Appearance Transcript, 25 Hearings 12070.
14 Connally, 14 Hearings 6088.
15 See White Paper, 17 Hearings 8078.
16 See Shultz memo, 17 Hearings 8128.
908
4. DAIRY TRUST CONTRIBUTIONS TO MILLS
There is evidence that the Mills Presidential campaign received
up to $75,000 in money, goods, and services from AMPI corporate
assets, in addition to $55,600 received from the dairy trust established
to make legal political contributions. Those sections of the report
which follow will provide details concerning contributions to Mills’
campaign from corporate assets of AMPI (as well as other
corporations) .
Mills received $1,500 from TAPE in 1971 and $25,000 from CTAPE
on June 13, 1972. ADEPT gave the Mills campaign a total of $16,600
in June, July, and August 1972, and SPACE gave a total of $12,500 in
May, June, and August of 1972.
Dr. Mehren was asked if the backing of Mills for the 1971 milk price
support was a factor in deciding upon subsequent contributions to
him. He said : “I think, in complete honesty, it would be a factor or an
incident in a long history of understanding, awareness, accessibility
and support.” 17 Concerning the CTAPE donation of $25,000 to the
Mills campaign, Mehren testified : “Mr. Mills knew I gave it to him,
and he thanked me for it. . . .” 18
5. COMPLETION OF INVESTIGATION
This limited investigation has not uncovered any direct evidence
that Congressman Mills’ support of the March, 1971 dairy legislation
constituted a specific quid fro quo for the money, goods and services
given to him. The failure of Congressman Mills to make himself avail-
able for committee interview, his campaign manager’s invocation of
the fifth amendment when called to testify under oath, and the destruc-
tion of records by AMPI have prevented a full development of the
facts.
C. Cash From Corporate Assets of Associated Milk
Producers, Inc.
1. SUMMARY
In August of 1971, on the instruction of Harold Nelson, general
manager of AMPI, Bob Lilly, an assistant to Nelson, delivered
$5,000 cash to David Parr, also of AMPI. There is evidence that
Parr sent the money to Washington where it was delivered to Mr.
Oscar E. (Gene) Goss, administrative assistant to Congressman
Wilbur Mills. Lilly acquired the cash by borrowing from a bank and
then repaying the loan with funds received from AMPI attorneys who
obtained reimbursement by billing AMPI for services not rendered.
In November of 1971, Jake Jacobsen, AMPI attorney, gave $5,000
cash to Parr for Congressman Mills. Parr had asked Jacobsen for this
money, saying it was needed for Mills’ Presidential campaign. J acob-
sen obtained the cash by a withdrawal from his law firm account.
Jacobsen is one of the attorneys who, according to Lilly, obtained reim-
bursement from AMPI for moneys he made available for political
17 Mehren, 16 Hearings 7323.
18 Mehren, 16 Hearings 7325.
909
contributions. Jacobsen denies this. Parr cannot recall the disposition
of the $5,000 received from Jacobsen.
2. $5,000 IN AUGUST 1971
On August 17, 1971, Harold Nelson, AMPI general manager, in-
structed Bob Lilly, his assistant, to deliver $5,000 cash to David Parr,
also of AMPI, for Wilbur Mills. On the. same day Lilly obtained the
money by borrowing $10,000 at the Citizens’ National Bank of Austin,
Texas. According to Lilly, Nelson told Lilly he could repay the loan
by aggregating funds from AMPI attorneys on retainer, “[a]nd
the attorney in turn would bill AMPI double out of what would have
been contributed and be paid in that manner.” 19
Nelson testified that he has no recollection of telling Lilly in August
of 1971 to give $5,000 to Parr for Mills, but stated “. . . if Lilly
said that I did it, I am perfectly willing to accept the fact that I
did. . . .” 20 Parr testified that he asked Nelson to send $5,000 to
Little Bock for a Mills appreciation dinner in August of 1971. Parr
denied that he received any request for this money from anyone work-
ing for Mills. Lilly delivered the cash to Parr’s secretary, Norma Kirk,
at the Little Rock Airport on August 17, 1971, and Kirk returned
it to Parr’s office where it was placed in a walk-in vault. Parr testi-
fied that at his direction, one of his employees, Tom Townsend, took
the $5,000 to Washington, D.C. to be given to Gene Goss, adminis-
trative assistant to Wilbur Mills. Parr said that. TAPE funds were
not used because publicity was not desired. 21
Townsend testified that in possibly August of 1971, on Parr’s in-
struction, he carried a sealed envelope from Little Rock to Wash-
ington, D.C. where he delivered it to Goss in Mills’ congressional
office. Parr told Townsend that the envelope contained cash and
checks, somewhat less than $5,000.
Townsend recalled what Parr had said to him: “I’ve got some
contributions that I would like to have you take up to Washing-
ton . . . Now be careful, because some of it is cash . . . some cash
and some checks, and it’s less than $5,000. . . .” 22 Townsend told Goss
the envelope was from Parr.
Goss has no recollection of receiving this cash. He does remember
receiving checks, not more than 100 in all, which Parr sent to the
campaign. These checks were written by dairy farmers and other
persons associated with AMPI, and will be explained more fully in
Section F.
Lilly held one-half of the $10,000 loan in reserve, and used it to
repay the loan along with funds obtained from Stuart Russell, an
19 Lilly, 14 Hearings 6166.
20 Nelson, 15 Hearings 0612.
21 Parr’s testimony was as follows with respect to the $5,000 cash he received from Lilly :
Parr. . . . that was brought to Washington by Mr. Townsend.
Sanders. That would have been under your supervision and direction ?
Parr. Yes, sir.
Sanders. And you would have had to tell him who to give it to?
Parr. Yes.
Sanders. Who would that be?
Parr. I believe it was given to Mr. Goss.
Sanders. Who is the AA to Mills. Why did Lilly give $5,000 to Norma Kirk?
Parr. Mr. Nelson and I had discussed the idea of making a contribution to the Mills
appreciation rally.
See Parr, 15 Hearings 6831.
22 Townsend, 16 Hearings 7089.
910
AMPI attorney. Lilly testified that Russell was the only one he con-
tacted for this purpose. In 1971, Kussell disbursed $39,500 to Lilly,
for which he obtained reimbursements by billing AMPI $62,950. 23
A Russell check for $4,000 on October 5, 1971 was payable to cash, the
proceeds of which were used by Lilly in paying the $10,000 loan in full
on October 8, 1971.
3. $5,000 IN NOVEMBER 1971
On November 10, 1971, Lilly went to Austin, Tex., to see Jacobsen. 24
At the Austin Airport he unintentionally met Jacobsen, Parr, and
Townsend. It appeared they were there for reasons other than to meet
Lilly. Lilly observed an envelope being handed to Jacobsen by Joe
Long, Jacobsen’s law partner. Lilly heard Long say, “here is the $5,000
for Wilbur that you wanted. . . .” 25 Jacobsen, Lilly said, handed the
envelope to Parr with a similar remark: “[HJere’s the $5,000 for Mr.
Mills,” 26 and Lilly observed Parr put the envelope in Parr’s pocket.
Jacobsen testified that Parr telephoned him to say, “. . . Mr. Mills
needs $5,000 in his Presidential campaign.” 27 At a different point,
Jacobsen testified, “He (Parr) asked for it” and “He wanted it for
Mr. Mills.” 28 Jacobsen withdrew $5,000 from his law firm account.
He testified, “. . . I delivered $5,000 to David Parr for Wilbur
Mills” 29 in the Austin Airport.
Jacobsen was unable to say whether his check for $2,750 on Novem-
ber 10, 1971, drawn on the firm of Jacobsen and Long, and the check
for $2,250 written by Long on November 10, 1971, also drawn on the
Jacobsen and Long account, were specifically the source of the $5,000
cash which he gave to Parr on the same date. 30 He averred that he did
not bill AMPI for reimbursement.
Lilly has testified that other moneys he received from Jacobsen for
political uses were recouped by Jacobsen from AMPI, and the com-
mittee’s Milk Fund Report presents independent evidence corroborat-
ing Lilly’s account. For the 12-month period ending June 30, 1972,
the Jacobsen law firms in Austin, Tex., and Washington, D.C. re-
ceived fees from AMPI totalling $80,000.
Parr had great difficulty in remembering the circumstances of this
transaction. He said it was confused in his mind with the $5,000
which Lilly delivered to Little Rock in August of 1971, but he said he
thinks he did ask Nelson about this money. He recalls receiving $5,000
from Jacobsen in the Austin Airport; he recalls that it was for a
political contribution ; but he cannot remember if it was for Mills. He
acknowledged that the $5,000 was in the form of cash, but he does
not know the source of it.
Nelson testified that he has no recollection of authorizing any pay-
ments to Mills.
23 Hart Affidavit, 17 Hearings 7922.
24 See Chapter 5, Milk Fund, Section V.A.2.
25 Lilly, 14 Hearings 6168.
20 Lilly, 14 Hearings 6172.
27 Jacobsen, 15 Hearings 6434.
28 Jacobsen, 15 Hearings 6431.
29 Jacobsen, 15 Hearings 6430-
30 Jacobsen exhibits 21 and 22, 15 Hearings 6496. See Chapter 5, Milk Fund, Section
II.D.3b, for other transactions involving the Jacobsen and Long accounts.
911
I). Services Rendered by Employees of Associated Milk
Producers, Inc.
x. SUMMARY
In August 1971, an appreciation dinner was held for Mills in Little
Rock. Some AMPI employees provided services for this function.
Between July 1971, and the end of January 1972, three employees of
AMPI worked at various times on the Mills Presidential campaign.
Two of them applied major portions of their time to the Mills cam-
paign for several months while on the AMPI payroll; one working
as an advance man traveling for and with Mills, and the other doing
office work. Expenses of these employees, including apartment and
furniture rental in Washington, D.C., were paid by AMPI. Salaries
and expenses of these employees for the relevant period totaled at least
$25,000. There is evidence that there was a conscious decision on the
part of a top official, or officials, of AMPI to assign AMPI employees
to work in the Mills Presidential campaign for a period of at least
several months, and that Mills’ administrative assistant as well as the
head of the Draft Mills campaign was at least aware of their partic-
ipation in the campaign.
2. JOE JOHNSON, TERRY SHEA, BETTY CLEMENT BULLOCK
During Parr’s testimony before the committee, he was questioned
concerning the assignment of AMPI employees to the Mills campaign :
Hamilton. . . . the first question is whether or not in late
1971 or early 1972 there were several AMPI employees who
moved to Washington and worked in the Mills campaign
while still on the AMPI payroll ?
Parr. Yes.
Hamilton. And who was that?
Parr. Joe Johnson, Betty Clement, and Terry Shea.
❖ * * * sfc
Hamilton. When did they come to Washington ?
Parr. The best I can remember is November.
Hamilton. And they stayed until after you left AMPI?
Parr. Yes.
Hamilton. And do you know what their combined monthly
salary would have been ?
Parr. I suppose around $2,500.
❖ * % % %
Hamilton. Who in AMPI made the decision to let these
three people go to Washington?
Parr. Mr. Nelson and myself.
After explaining that the employees reported to Charles Ward,
chairman of Draft Mills, Parr continued :
Hamilton. Do you recall any conversations with anybody
on the Mills staff or payroll, Congressional staff, campaign
staff?
Parr. I am sure they knew it. We did not try to hide it.
* * * * *
35-687 O - 74 - 59
912
Hamilton. Can yon give me the name of anybody on the
Mills staff that knew of this arrangement ?
Pare. I am sure that Mr. Goss knew it.
Hamilton. ... is it correct . . . that you sent them to
Washington without first notifying somebody in the Mills
staff to make the arrangements?
Parr. I would not say that. I just did not know the par-
ticulars. I am sure that there were some notifications or some-
thing that they were there. Mr. Johnson was traveling with
Mr. Mills
Parr was questioned further about the type of work these employees
performed for the campaign, and the amount of time devoted to the
campaign :
Sanders. Do you know, in fact, what they did for the at
least three months that they were here ?
Parr. I believe that Mr. Johnson traveled with Congress-
man Mills. I believe Ms. Clement worked in the Draft Mills
for President Committee. . . . And I believe Mr. Shea was
what they called an advance man
* * * * *
Sanders. . . . they were working full-time or virtually full-
time for the Mills campaign ?
Parr. Yes. 31
The following facts pertain to the services rendered by Betty Clem-
ent Bullock to the Mills campaign, and AMPI payment for her serv-
ices. Congressman Mills and Warren K. Bass, a certified public ac-
countant in Little Rock, established a nonprofit association called
Arkansas Voter Registration Association which was succeeded by
National Voter Registration Association (NVRA). “AMPI person-
nel, including Mr. David L. Parr, Mr. Forrest Wisdom, and Mr. Joe P.
Johnson, began to discuss a ‘project’ with Mr. Bass, in 1969.” 32 AMPI
was interested in information concerning the central United States.
Arrangements were finalized for NVRA to furnish AMPI with “. . .
voter registration information, educate key personnel of AMPI, edu-
cate AMPI members, and supply Mr. Parr with any other informa-
tion he might request. ... it was agreed that AMPI would pay all
of the salary expenses of the Association, which totaled $1,750 per
month. AMPI paid Mr. Bass $1,000 on May 24, 1971 ; $1,000 on July 1,
1971 ; and $10,500 on August 17, 1971,” 33 to cover an estimated 6
months for completion of the project.
An AMPI secretary, Betty Clement Bullock, was sent by Parr to
work for NVRA in the spring of 1971. For the first few months her
salary of $750 per month was continued to be paid by AMPI. After
June 30, 1971, she received her salary of $750 per month from Bass
(another employee of NVRA was paid $1,000 per month). About the
first of July. 197l, however, Bullock was assigned by Parr to work in
the Draft Mills campaign. She staffed the Mills headquarters in Little
31 Parr, 15 Hearings 6864.
82 Report of Wright, Lindsey and Jennings to AMPI, March 13, 1974, p. 116.
33 Ibid.
913
Rock until the date of a Mills appreciation dinner at the end of August.
As explained below, there is evidence that she then began working
on preparation for a rally in Ames, Iowa on October 2 featuring
Mills. On November 1, 1971, Bullock was sent to Washington, D.C.
where she assisted in the Mills campaign until February 1, 1972, at
which time she became salaried by Mills congressional office. Accord-
ing to Joe Johnson, beginning in September 1971, Clement spent al-
most every day at the Draft Mills office.
Gene Goss stated during a staff interview that Bullock came to
Washington in mid or late fall, 1971. He said she worked for Johnson
and may have had a desk in the Draft Mills office, but he did not know
who paid her.
At the time, of Johnson’s campaign assignment, he held the post of
Director of Field Services for AMPI’s northern Texas division. John-
son considered Mills to be an old friend of the Johnson family — Con-
gressman Mills had known Johnson’s father and offered Johnson an
appointment to the West Point Academy in 1947. Johnson’s AMPI
salary in 1971 was $25,000 per year.
During a staff interview, Johnson advised that in July 1971, Parr
asked him to go to Little Rock to help put together an appreciation din-
ner for Mills. He spent 10-15 days on this project for which time AMPI
paid his expenses. Terry Shea worked on the project also. There was
Mills for President advertising in the form of bumper stickers, plac-
ards, and balloons. 34 During a staff interview, Johnson acknowledged
that from September, 1971 to January 31, 1972, he assisted in the Mills
campaign while on the AMPI payroll. He said in September he only
spent about 30% of Ms time on the campaign ; however, in this calcula-
tion he did not include time spent on the preparation for the October 2
rally in Iowa where Mr. Mills was the principal speaker. 35 From Octo-
ber to January, Johnson estimated his time on the Mills campaign to be
50-70%, although he said he was working 18 hours per day and there-
fore also spending considerable time on AMPI business. He said Parr
must have asked him to see what he could do for Mills in Washington.
Johnson stated he did some advance work and handled correspondence.
He recalled travel for and with Mills to Chicago, Miami and Cali-
fornia. AMPI paid Johnson’s expenses. Gene Goss may have been
present a couple of times when travel was discussed, but Johnson
averred that no one on the Mills staff knew who was paying his bills.
According to the Wright Report, Bullock said that Johnson worked
as an advance man for Mills from September 1971 through January
1972. She said he traveled around the country arranging speaking en-
gagements and taking care of incidental details. She said he helped to
organize the campaign of Mills for the New Hampshire Presidential
primary.
Shea did not contribute much time to the campaign until January,
1972, according to Johnson. But in December 1971, Shea was desig-
nated as Secretary for numerous Mills campaign committees estab-
lished to receive contributions to be subdivided apparently in view
of the gift tax laws. 36
34 See Section G of this report for means of provision of bumper stickers.
35 See Section E for an account of the Iowa rally.
86 See Mills Campaign Committees, 25 Hearings 12033.
914
In order to reduce total expenses, Johnson rented two apartments
in Washington in November 1971. The total rent was more than $600
per month. In addition to the apartment rental, Johnson and Bullock
leased furniture at a total cost of about $175 per month for which they
were reimbursed by AMPI. The apartments and furniture rental cost
to AMPI was $6,088.62. (The excess over the actual cost for 3 months
of use is attributable to an agreement of settlement with Johnson and
Bullock because the apartments had been leased for a 12-month
period.) AMPI records reveal that AMPI paid Johnson for additional
expenses he billed in November and December 1971, in the total amount
of $2,649.38. Thus, AMPI paid expenses of at least $8,738 for John-
son and Bullock.
Ward testified that Johnson assisted him on the appreciation dinner
for Mills and thereafter gradually spent more time on the campaign —
sometimes a few hours a day, sometimes the entire day. Ward w T as
aware that Johnson, Shea, and Bullock were on the AMPI payroll un-
til the end of January 1972. It was evident to him that Goss and Parr
were aware that these employees were providing services for the Mills
campaign. It was possible, he thought, that he had asked Parr to fur-
nish help and that he had even asked for the services of Johnson for
a particular job. 37
In mid-January 1972, there was a change in the general managership
of AMPI. Harold Nelson was succeeded by Dr. George Mehren, John-
son returned to San Antonio at this time to talk with Mehren, telling
him, “I am doing something that you should know about.” 38 Johnson
was advised by Mehren that his work for Mills must cease, or in the
alternative, he could take a 6-month leave of absence without pay.
Johnson decided to terminate his AMPI employment and this became
effective January 31, 1972. Dr. Mehren testified that shortly after he
became general manager he was told by Johnson that “. . . there were
two apartments which were being paid for by AMPI with a few people,
three or four, I think, although he never stated precisely how many,
who were supporting the so-called draft for Mills, who were also on
the AMPI payrolls and expenses.” 39
At the time that Johnson returned to San Antonio to talk with
Mehren, Johnson told Nelson that his work for Mills began in Novem-
ber 1971, and that it was at Parr’s insistence. Nelson also learned that,
in addition to the employees’ salaries, AMPI was paying for apartment
rentals in Washington, D.C. Nelson testified that “. . . at the time he
(Johnson) was doing this he was under Mr. Parr’s supervision.” 40
In fact, he said that Johnson, Shea and Bullock were sent by Parr
to work in the Mills campaign without consulting him. He said that
Johnson and his secretary were working substantially full-time for
Mills in November and December 1971 and January 1972.
Goss stated during interview that he was aware that Johnson and
Shea came to Washington to work in the Mills campaign ; however, he
did not know who was paying them. Around the first of February
1972, Goss and Johnson went to Arkansas to meet with Mills. Goss
B7 Ward testified that his own expenses of travel for the Mills campaign were charged to
Ward Industries of Conway, Arkansas. He averred that the business had distributorships
throughout the nation and that on the occasion of his travel for the campaign, he used the
opportunity to discuss business with these distributors.
88 Mehren, 16 Hearings 7341,
39 Ibid.
40 Nelson, 15 Hearings 6605.
915
recommended that Johnson be put on the Mills congressional payroll.
Mills was told at this time that Johnson was doing campaign work.
For the months of February and March 1972, Johnson was in the em-
ploy of Mills on his congressional office payroll ; however, he was then
terminated because of the advice of the Clerk of the House due to his
participation in campaign work outside of Washington, D.C.
3. OTHER AMPI EMPLOYEES IN NEW HAMPSHIRE AND ELSEWHERE
Parr testified that still other employee services were provided for
Mills during the New’ Hampshire primary effort.
Sanders. ... do you know of any other AMPI financial
support for Mills in the 1971-72 Presidential campaign ?
* * * * *
Parr. We had some people go to New Hampshire.
Sanders. Did you send them to New Hampshire ?
Parr. Yes.
Sanders. How many ?
Parr. I believe a former State senator of Arkansas, Charles
George, and his wife. . . .
* * * * *
Sanders. Did you pay for his expenses ?
Parr. Yes, sir. . . . This is travel, lodging, what kind of
expenses he had.
^ * * * *
Sanders. Car rental?
Parr. Yes, sir.
Sanders. What was he to do in New Hampshire ? . . . Did
it have relationship to Mills’ candidacy ?
Parr. Yes; to see what it looked like . . . Mr. Holmes also
went up there. . . . He was an employee out of Little Rock . . .
had a background in radio and television promotion. 41
Parr said they were in New Hampshire less than a -week. For John-
son’s work for Mills in New Hampshire, according to the Wright
Report, he was paid by AMPI, for expenses of $2,850.
The extent of the use of AMPI employees in the Mills campaign
is even more evident from remarks of Lilly during an interview con-
ducted by the law firm of Wright, Lindsey and Jennings. Lilly stated,
“Tom Townsend spent quite a bit of time on the Mills campaign. Joe
Murphey worked for Mills for a week or 10 days at a time. Kieffer
Howard and Bob Justice would do the same, I believe.” 42
E. Expenses op Iowa Cooperative Month Rally
i. summary
October of 1971 was designated by the Governor of Iowa as Coop-
erative Month. There is evidence that in September 1971, Congressman
Mills called the executive director of the Iowa Institute of Coopera-
tion and asked if the director could provide him with an audience to
41 Parr, 15 Hearings 6870—71.
42 Wright law firm notes of interview with Lilly on December 27 and 28, 1973.
916
discuss agricultural problems. The director agreed, and a rally was
planned. It appeared that Joe Johnson of AMPI told the director that
Johnson would take care of all expenses of the rally, and AMPI did
provide funds of about $30,000 in addition to $15,000 furnished by
Mid- America Dairymen, Inc. Johnson arranged for the director
to issue an invitation to Mills in Washington, D.C. and the publicity
made it appear that it had been initiated by Iowa Co-op.
AMPI provided the services of a number of employees in prepara-
tion for the rally. David Parr, an AMPI official, acknowledged that
one purpose of the rally was to give prominence to Mills. While there
were other speakers at the rally, Mills gave the principal address. An
Iowa statewide effort was made by an Arkansas associate of Parr to
urge Iowa local co-ops to distribute Mills for President lapel stickers
to be worn at the rally.
2. DESIGNATION OF IOWA CO-OP MONTH
The testimony given to the committee by Gerald K. Pepper, execu-
tive director of the Iowa Institute of Cooperation, Ames, Iowa, pro-
vides a first-hand account of the inception of an October 2, 1911 co-op
rally in Ames. For many years the Iowa Institute of Cooperation had
obtained a proclamation from the Governor of a Co-Op Month. But
until 1971, there had never been a mass rally held during that month
to highlight the affair. In early 1971, the Governor of Iowa designated
the month of October as Co-Op Month. Up until September, 1971, a
rally highlight had not yet been conceived. Pepper testified, “There
was never an intent at that point for there to be a program. . . . There
was no rally planned. . . .” 43
3. EVIDENCE OF CONGRESSMAN MILLS’ CALL TO SOLICIT FORUM
Pepper stated that on Labor Day, 1971, he received a telephone call
from Congressman Mills. Pepper testified, “. . . he said, ‘Mr. Pepper,
we have powerful problems in agriculture . . .,’ he said, ‘I wonder if
you would do me a personal favor . . .,’ he said, ‘I wonder if you
would rent the University of Iowa football stadium and fill it with
farm people and give me an opportunity to come out and meet with
(them) . . . .’ he invited me to call him back at his apartment on the
following night. . . . And the more I thought about it, the more I
thought that, well, this is co-op month. Here is a tremendous opportu-
nity to focus attention on this program.” 44 Pepper said he notified
Mills of his approval. “He (Mills) . . . indicated that ‘someone’
would be in touch with me.” 45 Pepper told Mills a preferable site
would be the Hilton Coliseum in Ames. 40
4. ASSURANCE OF FINANCIAL BACKING
On the day after Labor Day, the date of the rally still not selected,
Pepper received a telephone call from Joe Johnson who “. . . indi-
cated that he was to get in touch with me to discuss the co-op rally
43 Pepper, 17 Hearings 7709.
44 Pepper, 17 Hearings 7709-7710.
45 Pepper, 17 Hearings 7710.
46 According to Parr, Johnson scouted the area and decided upon Ames.
917
event. And his identification was as a representative of Associated Milk
Producers ... he advised me that I didn’t have to worry about money
. . . the matter of financial arrangements would be his obligation.” 47
5. CONGRESSMAN MILLS IS FORMALLY INVITED
According to Pepper, later on the same day, Johnson contacted him
again to ask if he could be in Washington, D.C. (3 days later) on
Friday. Pepper told Johnson that he could not do so because of a co-op
board meeting on that date whereupon Johnson offered to transport
the entire board to Washington and provide for their meeting on
the airplane. Pepper agreed to this and 10 members of the board
traveled to Washington on two jet aircraft provided by Johnson.
The purpose of the trip was to provide an opportunity to meet Mills.
Pepper testified, “. . . en route to Washington, Johnson told me that
I would be expected to make an invitation (to Mills)”. 48 The board
was taken to the House of Representatives’ Ways and Means Com-
mittee hearing room, where a great number of people were in at-
tendance. According to Pepper, “. . . the meeting appeared to be under
the control of David Parr.” 49 Parr was the one who made the intro-
ductory statements. Mills came in and “Mr. Parr introduced me and
I offered him my invitation.” 50 After Mills’ acceptance, the co-op board
conducted a brief meeting in the Ways and Means hearing room.
An Associated Press wire story carried in a Des Moines newspaper
on March 25, 1974, said that Congressman Mills said, “through a
spokesman that he received an unsolicited invitation” to speak at the
Iowa rally. With respect to this news account, Pepper testified, “The
remarks of Congressman Mills’ spokesman ... is absolutely incor-
rect.” 51
6. AMPI EMPLOYEES’ SERVICES PAYMENT OF EXPENSES
Pepper explained the implementation of the program. He testified,
“Johnson came to Ames and he brought a large delegation of people
who were identified as staff members of Associated Milk Pro-
ducers.” 52 These included Forrest Wisdom, John Holmes, Tom Town-
send, Terry Shea, and Betty Clement Bullock, who “. . . appeared to
be in charge of the clerical staff in the operation. . . . They installed
... a number of telephones . . . they were also using the Holiday Inn
as kind of a central headquarters.” 53 Pepper said the average number
of AMPI employees in September was about six, but occasionally
ranged as high as 15-20. 54
The payment of the cost of the rally was explained by Pepper in
this way. “He (Johnson) established a bank account in an Ames
bank . . . and made whatever deposits he had for the finances of the
function.” 55 Johnson had the power to draw on the bank account,
47 Pepper, 17 Hearings 7711.
48 Pepper, 17 Hearings 7712.
49 Pepper, 17 Hearings 7713.
™Ibi< 7.
B1 Pepper, 17 Hearings 7714.
52 Ibid.
^Pepper. 17 Hearings 7714-15.
54 Tom Townsend’s calendars show that he was in Iowa on September 13-16', Septem-
ber 22-23. and September 28-30, 1971.
65 Pepper, 17 Hearings 7714.
918
but Iowa co-op officials did not. Pepper turned over to Johnson a
$15,000 check he had received from Mid- America Dairymen. The
co-op never made any deposits to the account. As Pepper received
bills he turned them over to Johnson for payment. Payment of bills
by the co-op with other resources was minimal, and Pepper did not
think that any member associates of the co-op assisted with any ex-
penses of the rally.
The Wright report relates that AMPI issued two checks to the Iowa
Cooperative Month, one dated September 22, 1971 for $5,000, endorsed
“Iowa Cooperative Month — Joe Johnson”) and one dated October 21,
1971, in the amount of $18,000 (endorsed “Iowa Cooperative Month”) .
According to the Wright report, Pepper was requested to review bank
statements and checks in his possession pertaining to the Johnson
account and Pepper said they reflected $38,319 deposited to the ac-
count. After payment of all expenses, a balance of $1,000 was trans-
ferred to the Iowa cooperative account. Additionally, AMPI directly
paid expenses of $6,132, which included $3,751 for buses chartered to
transport f armers to and from the rally.
Pepper said he traveled around the State by aircraft, the expenses
for which he judged were paid by Johnson from sources other than
Johnson’s bank account. When Pepper was in need of air transporta-
tion, he notified Johnson who “. . . would identify the aircraft for me
and tell me where it would be at the Ames airport. . . .” 58
Parr acknowledged that expenses were to be paid bv dairy and local
farm co-ops. He said numerous employees of AMPI helped to turn
out a large crowd. 57 Parr thought the total cost was $50,000-$60,000,
but he did not know what part was paid by AMPI.
It is difficult to calculate the total amount which was spent on the
Iowa rally by AMPI. Together, Mid-America Dairymen, Inc. and
AMPI made direct payments from corporate assets totaling $44,132.
In addition, AMPI bore the expense of salaries for perhaps an average
of six employees for much of the month of September, and apparently
paid for the expenses of two jet aircraft traveling from Iowa to
Washington, D.C. and returning, and the expense of Pepper’s air
travel throughout the State of Iowa. The salary expense might be
approximated conservatively at $5,000. The air transportation would
surely exceed $1,000. Thus, AMPI (and Mid- America) apparently
paid in excess of $50,000 for the rally.
7. PROMOTION OF CONGRESSMAN MILLS AS A PURPOSE
The question to be resolved is whether the Iowa rally was contrived
by Congressman Mills or his supporters as an event to advance his
Presidential candidacy.
Parr furnished testimony that the rally had several agricultural
purposes. He was then asked if it would be fair to say that an addi-
tional purpose was to give more prominence to Mills. 58 He replied,
“Yes, sir. I would have to say that.” 59
68 Pepper, 17 Hearing 8 7717.
57 Pepper estimated the rally was attended by 7,000-8,000 persons.
68 While there were other speakers at the rally, including elected officials, Mills gave the
principal address.
5fl Parr, 15 Hearings 6867.
919
Sanders. Did Congressman Mills receive any prominent
notice in the advertisements ?
Parr. Yes.
$ ^ * sfc *
Sanders. Were yon touting him for the Presidency ?
Parr. Yes ; I would have to say I was. 60
Pepper was asked whether he discerned any etfort to use the rally
as a forum for the Mills Presidential candidacy. In response, he told
about a letter of September 14, 1971, from Harry L. Oswald, general
manager, Arkansas Electric Cooperatives, 61 to rural electric co-op
managers throughout Iowa. 62 Pepper described the letter as an effort
to get the managers to distribute Mills for President lapel badges to
their members for use at the rally. Pepper said, Oswald “was soliciting
support for the Congressman to be an active Presidential candidate.”
To offset the effort of Oswald to make a partisan affair of the rally,
Pepper sent a memorandum to the rural electric co-op managers ask-
ing them to disregard any attempt to divert his effort to make the meet-
ing bipartisan. 63 When questioned concerning the appearance of the
rally itself, Pepper testified :
Muse. Was there any effort to solicit any funds by Con-
gressman Mills at the rally?
Pepper. No.
Muse. And again, his speech and his actions didn’t demon-
strate, or didn’t seek to generate a candidacy, did [they] ?
Pepper. As a matter of fact, I thought it was pretty dry . 1 * 4
However, Pepper also acknowledged the accuracy of a quote attrib-
uted to him, appearing in the March 25, 1974 Des Moines Tribune a,s
follows : “Mills appeared to be testing the water for a possible Presi-
dential run.”
Nelson testified that there was no doubt but that Parr was an early
supporter of the idea of Mills for President. Files of the Wright, Lind-
sey, and Jennings law firm show that during an interview with Lilly,
he stated : “Dave Parr wanted to build a kitty for Wilbur Mills of
$2,000,000.” 65 He said the rally was Parr’s idea, but he did not think
it was arranged solely for Mills’ benefit. According to Lilly, “. . . Joe
Johnson had a considerable part of the work in putting that (rally)
together.” 66 Johnson advised the committee staff that he was the
AMPI coordinator for the event, that he spent a couple of weeks
working on it in September and that he made progress reports to
Parr. He recalled the use of bumper stickers advertising Mills for
President. 67
Townsend testified : “I was in Iowa to help wherever I could to try
to get a crowd for the Iowa cooperative.” 68 He said his function
was “. . . to get people together and see if we couldn’t develop some
60 Parr. 15 Hearings 6867-68. , _ . . . ' . ,, nnA
61 See Wright report, pages 154-155, for circumstances of relationships of Oswald and
Parr in an earlier and unrelated corporate campaign contribution.
62 See Pepper exhibit 2, 17 Hearings 7727.
63 See Pepper exhibit 3, 17 Hearings 7729.
64 Pepper, 17 Hearings 7724-25. _ ,
e5 Wright law firm notes of interview with Lilly on December 27 and 28, 1973.
68 Lilly, 14 Hearings 6170.
67 See Section G, concerning the procurement of bumper stickers.
68 Townsend, 16 Hearings 7104.
920
more cooperation. And then I think, too, I knew that Chairman Mills
was going to be one of the speakers at that meeting, and anything I
could do to help Chairman Mills I would be happy to do.” 69
Hamilton. Was that the official position of AMPI, “Let’s
help Chairman Mills”?
Townsend. ... I think that may be an unofficial posi-
tion ... he was helpful to us in terms of the dairy industry,
and, at least I felt that any time there was anything we could
do that would be helpful to Chairman Mills, that it would
be done.
* * * * *
Hamilton. But you perceived it (the Iowa rally) as a ve-
hicle to promote Mills’ candidacy? Is that correct, or is it
not correct ?
Townsend. Yeah, I guess I perceived it as
Hamilton. Do you think Mr. Parr perceived it as that
way?
Townsend. ... I would think that he would have per-
ceived it as an opportunity to help Chairman Mills ; yes.
Hamilton. How about Mr. Nelson ?
Townsend. I would say the same with Mr. Nelson. 70
Early in 1974, some adverse publicity arose concerning the genesis
of the Iowa rally. The Governor of Iowa expressed the opinion that
the co-ops had been used. On March 26, 1974, Pepper sent a letter to
Governor Robert Ray 71 voicing agreement with the Governor’s
opinion. Pepper’s letter went on to say, “. . . I may 1 have made an error
in judgment by falling prey to someone’s carefully planned strat-
egy ... a carefully staged meeting in Washington w T as held in which
I ‘officially’ issued an invitation. ... I believe, now, that I’d been
‘had’ — had by experts in political games. . . .” 72
The detailed information provided by Pepper concerning the back-
ground of the invitation extended to Mr. Mills including his reported
telephone call to Pepper was not known at the time of the staff inter-
view of Johnson. A full development of the circumstances has been
precluded because of Johnson’s invocation of the fifth amendment
when subsequently called to testify under oath, and by the failure of
Mr. Mills to accede to the committee’s request for interview.
F. Solicitation of Donations From AMPI Employees
i. summary
In late 1971 or early 1972, David Parr, an official of AMPI, raised
about $40,000 for Mills’ campaign by solicitations made to employees,
officials, a,nd directors of AMPI. This money was sent to Mills’ ad-
ministrative assistant. Some employees were asked to sign an author-
ization for a deduction from their paycheck as a contribution to Mills ;
however, this check-off system was discontinued before it was
implemented.
C9 Townsend, 16 Hearings 7104,
70 Townsend, 16 Hearings 7105.
71 See Pepper exhibit 1,17 Hearings 7726.
72 Ibid .
921
2. AGGREGATION OF EMPLOYEES 5 CHECKS FOR MILLS
In late 1971 Parr asked employees, officials, and directors of AMPI
to contribute to Mills’ campaign. He aggregated about $40,000 in
checks which he periodically sent to Gene Goss, Mills’ administrative
assistant, as received. Parr averred that no pressure was used and no
ultimate goals, or levels of giving, were established. He denied that any
of these contributors recovered their donations by submitting ficti-
tious vouchers to AMPI. Parr claimed that Nelson approved this pro-
gram. Parr answered specific questions as follows :
Sanders. Did you solicit contributions from AMPI em-
ployees for Mills . . . ?
Parr. Yes, sir. ... I believe the figure raised was about
$40,000. ...
sjc jfc Jji #
Sanders. Over what period of time ?
Parr. . . . in the fall.
* * * * *
Sanders. Of 1971 ?
Parr. Yes, sir.
* # * * *
It was sent to me and I sent it to Washington. . . . I believe
to Gene Goss.
sje sfc * * *
Sanders. Did you contact all of them personally, or did
someone else do it for you ?
Parr. Everybody was working on it. I mean, all of the
employees were working on it. 73
* ' ■ * . * * *
Hamilton. Was there any arm-twisting ?
Parr. I have heard there was, since it’s all over with. But
I had not heard at the time that there was. ... I heard that
people were told they had to do it. 74
Charles Ward, chairman of Draft Mills, said Parr periodically
would deliver to the campaign an aggregation of $4,000 to $5,000 in
checks. Townsend recalled delivering to Gene Goss a large envelope
given to him by Parr. He was told that it contained checks. Gene Goss
stated during an interview that in late 1971 or early 1972, Parr’s secre-
tary, Norma Kirk, sent checks to the Mills campaign. These repre-
sented contributions by dairy farmers and other persons associated
with AMPI, the number of which was less than 100.
In the report of Wright, Lindsey, and Jennings to AMPI, dated
March 13, 1974, it is related that Stuart Russell, an attorney for
AMPI, disbursed $1,000 by check to Wilbur Mills for President on
November 12, 1971. This may be one of the checks which were aggre-
73 Parr, 15 Hearings 6868-70.
74 Parr, 15 Hearings 6872.
922
gated by Parr. This $1,000 is included in the total of $44,975.52 which
Russell disbursed in 1971 for political purposes, principally through
Bob Lilly, and for which he billed AMPI $72,550 for reimbursement.
Frank Masters, another AMPI attorney, acknowledged that Parr had
solicited a $1,000 contribution which Masters made to Mills ; however,
Masters denied that he had been reimbursed for this by AMPI.
3. EMPLOYEE CHECKOFF SYSTEM
Dr. George Mehren, who became general manager of AMPI in
January of 1972, testified that Parr had initiated a checkoff system
for employees of the AMPI southern region in 1972. The purpose was
to aggregate funds for the Presidential campaign of Congressman
Mills. Mehren heard of this plan and disapproved it before it was put
into operation because of complaints that had been made to him by
employees. It was Mehren’s understanding that about 65 employees
were programed to contribute about $25 per month. According to Har-
old Nelson, the previous general manager of AMPI, Parr was “calling
key employees of AMPI,” 75 using his personal approach to solicit
contributions for Mills. This was in about January of 1972. Nelson
said, “. . . Mr. Parr is a pretty forceful character, and I do not know
what he might have said to these people.” 76
Tom Townsend, who worked for Parr, told the committee that Parr
initiated the checkoff system for Mills. He stated, “I know I signed
an authorization to deduct — I don’t recall the amount — from my
check to be sent to the Elect Mills for President campaign.” 77 Sub-
sequently, the AMPI comptroller returned Townsend’s form with
advice that the procedure would be contrary to AMPI policy.
The AMPI comptroller, Robert Isham, advised the committee that
Parr had undertaken an effort to mobilize AMPI to elect Wilbur
Mills to the Presidency. According to Bob Lilly, assistant to the
AMPI general manager, Parr wanted to build a $2 million cash kitty
for Mills. 78
G. Advertising Material Provided Through Walker and
Associates, Inc.
i. summary
Walker and Associates, Inc., a Memphis, Tenn. public relations firm,
billed Associated Milk Producers, Inc. in the summer of 1971 for
$9,291.53 for the printing of 110,000 bumper strips bearing “Mills for
President.” The invoice was sent to the attention of David Parr, an
official of AMPI whom Mr. Walker assumes placed the order. This
amount was paid by AMPI on August 17, 1971.
2. the transaction
Walker and Associates, Inc. of Memphis, Tenn. specializes in ad-
vertising, marketing, and public relations. The president, Deloss
Walker, has advised by letter that an order was placed with his firm
75 Nelson, 15 Hearings 6611.
76 Nelson, 15 Hearings 6612.
77 Townsend, 16 Hearings 7117.
78 Wright, Lindsey and Jennings law firm notes of interview of Lilly, December 27 and 28,
1973, page 12.
923
in 1971 for 110,000 bumper strips imprinted “Mills for President.”
The documentation submitted by Walker reflects that an order for
10,000 strips was placed on April 28, 1971, and an order for an addi-
tional 100,000 was placed in July of 1971. Invoices for the cost of this
work totalling $9,291.53 were sent on June 30 and July 30, 1971,
to AMPI, “Attention Mr. Dave Parr.” Walker sent this committee a
copy of the bumper strip, along with the invoicing and cover letter. 79
W alker stated that he “would assume the person authorizing the mate-
rial was David Parr, since the statement was sent to his attention.” 80
Walker, however, could not recall specific instructions.
On August 17, 1971, AMPI paid $9,291.53 to Walker and Asso-
ciates by its check No. 8406. 81
II. CONTRIBUTION FROM GULF OIL CORP.
A. Summary
Prior to the effective date of the Federal Election Campaign Act of
1971 (on April 7, 1972), an associate of Congressman Mills, Carl
Arnold, solicited a contribution from Claude C. Wild, Jr. At this
time, Wild was vice president for governmental relations of the Gulf
Oil Corp. Wild obtained $15,000 in cash from the controller of a Gulf
subsidiary in the Bahamas which was charged on the books to mis-
cellaneous expenses. Wild delivered the cash to Arnold for the Mills
campaign.
In November of 1973, Wild and Gulf Oil were convicted and sen-
tenced for similar illegal corporate contributions to FCRP. 82 On
November 29, 1973, Gulf Oil requested the Mills for President com-
mittee to refund the $15,000, and the request was honored.
B. The Transaction
Claude Wild, Gulf Oil Corp. vice president for governmental rela-
tions, gave public testimony before the Select Committee on Novem-
ber 14, 1973. He stated that at about the time of the New Hampshire
primary, on March 7, 1972, 83 lie arranged to give $15,000 to Carl Ar-
nold, a close friend who had worked for the American Petroleum
Institute. Wild knew Arnold was also a close friend of Congressman
Wilbur Mills, and he assumed that Arnold turned the money over
to the Mills campaign. As in the case of the Gulf contribution to
FCRP and Senator Jackson’s Presidential campaign, discussed else-
where in this report, Wild acquired this money by calling the con-
troller of Bahamas Exploration, Ltd., a wholly-owned foreign sub-
sidiary of the Gulf Oil Corp. He asked for a delivery of the sum
in cash. The controller drew a check for this amount, obtained the
proceeds in cash, and charged the item on the corporate books to a
79 See Walker letter, 25 Hearings 12076.
™ iota.
81 Report of Wright, Lindsey and Jennings to AMPI, March 13, 1974.
82 $100,000 was given in cash to the Committee To Re-Elect the President, and $10,000
was given in cash to Senator Jackson’s campaign, both of these donations being funded by
Wild in the same manner as the Mills contribution as discussed in the Campaign Financing
Report. See Claude Wild public testimony to the committee on November 14, 1973, 13
Hearings 5460.
83 The Federal Election Campaign Act of 1971, requiring a full disclosure of contributions,
was to take effect on April 7, 1972.
924
miscellaneous expense account. According to Wild, this contribution
for Mills was solicited by Carl Arnold and was picked up by Arnold
from Wild’s business office.
Carl Arnold was questioned about this transaction during an execu-
tive session of the committee :
Sanders. Did you contact Claude Wild and seek a contribu-
tion from him?
Arnold. I’m sure I did
Sanders. Did Claude Wild deliver a contribution to you for
Congressman Mills?
Arnold. Claude Wild delivered to me a sealed envelope.
This was at his office and he said that there was $15,000 cash
in it, and I had it delivered to the Mills committee. I never
opened the envelope. 84
Arnold estimated the time of this event as late 1971 or early 1972.
He said that Wild made no mention of the actual source of the money.
Arnold continued, “I certainly never suspected it was corporate
money.” 85 Arnold cannot recall to whom he gave the money.
Arnold. Charles Ward was in charge for a while. At some
later date, Joe Johnson had the title of President of the cam-
paign. . . .
* * * * *
Sanders. Did you at the time of delivery, did you state that
the money was from Wild ?
Arnold. No, sir, I would never have done that.
Sanders. Why wouldn’t you have done that?
Arnold. It was none of their business.
* * * * *
Sanders. So that upon receiving it at the campaign office
they would have no way of knowing the identity of the
donor ?
Arnold. I don’t suppose they would.
* * * * *
Arnold. As I recall, I told Chairman Mills about it some-
time around Convention time. ... I never mentioned the sum
to the Chairman. I just said that Claude had been helpful, or
words to that effect. 86
Arnold was asked whether Mills was aware of the magnitude of the
contribution or that it was in cash. He replied, “No. That is the kind
of question that Chairman Mills doesn’t ask, and he doesn’t neces-
sarily want to be told, either.” 87
At a July 1972 meeting of the Gulf Oil board of directors, Wild
told William L. Henry, then Gulf’s executive vice president, that
solicitation of political contributions was going on all over the country,
and that he (Wild) had done his share for Gulf. Wild advised Henry
not to pay any attention to solicitation if approached because he had
already done enough. Wild said that Henry must have assumed that the
84 Arnold, 25 Hearings 12023.
85 Arnold, 25 Hearings 12024.
80 Arnold, 25 Hearings 12024-25.
87 Arnold, 25 Hearings 12026.
925
funds for contributions came from Gulf’s Good Government Fund,
which had been established by Gulf’s legal counsel to receive contribu-
tions from Gulf employees.
The specific use which was made of this $15,000 in cash is not
known ; however, substantial sums of cash were funneled into the New
Hampshire primary on behalf of Mills. Joe Johnson, an AMPI em-
ployee who worked in Mills’ Presidential campaign and who sub-
sequently became campaign manager, stated during an unsworn in-
terview that, on a couple of occasions, Carl Arnold delivered cash to
him in New Hampshire. Johnson did not know the source of the money.
Some of the cash w T as deposited in the Indian Head National Bank of
Manchester, and some was used to make direct payments to campaign
workers. The largest amount recalled by Johnson on any one occasion
was about $5,000 to $7,000.
On November 13, 1973, Wild pleaded guilty to a violation of 18
U.S.C. 610 (as did the Gulf Oil Corporation). This statute makes it
unlawful for corporations to make contributions to a political candi-
date or committee. It is also unlawful to knowingly receive any such
contributions. 88 The Gulf Oil Corp. v y as fined $5,000 and Wild was
fined $1,000.
On November 29, 1973, the Gidf Oil Corp. wrote to the Mills for
President Committee advising that the $15,000 donated by Wild “was
made from Gulf’s funds” and requesting that it be returned. The
$15,000 was thereafter returned. 89 The failure of Congressman Mills
to schedule a time for interview by this committee and the invocation
of the fifth amendment by his campaign chairman, Joe Johnson, when
called to testify under oath, have foreclosed a complete development
of all circumstances of this transaction.
III. CONTRIBUTION FROM MINNESOTA MINING AND
MANUFACTURING COMPANY
A. Summary
Minnesota Mining and Manufacturing Co. (3 M) maintained a
secret cash fund for making political contributions, one source of
which Avas a European consultant who billed 3 M for services not
rendered. The consultant, by previous arrangement initiated by top
executives of 3 M, then remitted to 3 M his receipts from these bill-
ings. A few weeks before the 1972 Democratic National Convention,
the Mills campaign chairman solicited a contribution from an official
of 3 M. This solicitation was referred to the chief executive officer of
3 M Avho issued his personal check for $1,000 which was delivered to
the Mills headquarters; later the chief executive was reimbursed from
3 M’s secret fund. On October 17, 1973 the 3 M Corp. and its chief
executive officer were convicted and sentenced for illegal corporate
contributions to the Committee To Re-Elect the President from the
same corporate source.
88 In addition to the prohibition against corporate contributions, the law in effect before
April 7, 1972 prohibited the giving or receiving of contributions in excess of $5,000 to an^
one political committee.
89 See Mellott letter, 25 Hearings 12029.
B. The Transaction
For many years the executives of Minnesota Mining and Manufac-
turing Co. maintained a fund for making political contributions. In
1970 when Harry Heltzer became chairman and chief executive officer
of 3 M, he became aware of the existence of this fund, although he did
not learn precisely the mechanics of how corporate money was chan-
nelled to it.
Wilbur Bennett, director of civic affairs for 3 M, explained that an
agreement was reached by 3 M top executives with a European con-
sultant whereby the consultant would submit false invoices to 3 M for
services when actually no services had been rendered. The consultant
was paid by 3 M, and the item was accounted for as an ordinary busi-
ness expense. The consultant returned the payments to 3 M in the
form of cash which was kept under the control of 3 M executives.
Specifically, it was maintained in the custody of Irwin Hansen, 3 M’s
director of finance. The established procedure for release of contribu-
tions from this fund was that the chief executive officer would give his
authorization on contributions recommended to him, and this would
be presented to Hansen who would then provide the authorized amount
of cash.
Before the New Hampshire primary, the Mills for President cam-
paign solicited a contribution from Jerome Schaller, the manager of
governmental relations in 3 M’s Washington, D.C. office. At that time
Schaller did not recommend to his superiors that any response be made
to the request.
About three weeks before the Democratic National Convention in
July of 1972, Schaller received a call from Joe Johnson, the “Mills
for President” chairman. Johnson told Schaller that supporters of
Mills were going to try to put on a big effort at the convention, and
asked Schaller if he could be of financial assistance. Thereupon,
Schaller wrote a memorandum to D. O. Opstad, another 3 M official,
dated June 19, 1972 90 to advise of the call. Opstad referred the memo
to Mr. Bennett in the headquarters office with a notation that “. . .
even as Chairman of W and M (Ways and Means), he’s (Mills) a
key man.” Opstad noted that request was inevitable and continued,
“I am not in favor of assisting any other Demo candidate at this
time, but believe we should consider here. $1,000-$2,000 should be the
amount. . . .” 91
Bennett told the committee during interview that he received this
memo from Opstad. He reviewed it with Heltzer, who wrote a check
for $1,000 to Mills’ campaign on his personal account. Heltzer was
reimbursed for this personal expenditure by cash from Hansen’s secret
fund.
Heltzer’s check was delivered to Schaller at a Miami hotel ; Schaller
took it to the Mills headquarters where he handed it to Terry Shea
who was working for Johnson. 92 It was Schaller’s under-standing con-
90 See Schaller memo, 25 Hearings 12088.
« Ibid.
82 The Mills for President Committee duly reported the Heltzer contribution to the Gen-
eral Accounting Office as of July 14, 1972.
927
cerning the source of the funds that Bennett would contact other
executives of 3 M to explain the need to make the contribution and
then accept any amounts they wanted to give. Schaller said he be-
lieved the $1,000 check for Mills was from Heltzer’s own funds. He
stated that he knew of no indication that any Mills personnel were
aware that the contribution came from corporate assets.
On October 17, 1973, the 3 M Corp. and Heltzer entered pleas of
guilty to misdemeanor violations of the Federal Corrupt Practices
Act. The basis of the charge was contributions which had been made
from the secret corporate fund to the Committee To Re-Elect the
President. The corporation was fined $3,000, and Heltzer was fined
$500.
35-687 0 - 74 - 60
928
Attachment 1 to Chapter 7, page l of 2.
QlCrttfcb ^bicdes Jsenale
SELECT COMMITTEE ON
PRESIDENTIAL CAMPAIGN ACTIVITIES
(PURSUANT TO s. RES. M, IJD CC.SOWCSS)
Washington, p.C. 20510
January 24, 1974
Hon, Wilbur Mills
Room 1136 Longworth Bldg.
Washington,- D. C*
i .
Dear Congressman Mills:
As you know the Senate Select Committee on Presidential
Campaign Activities is investigating various allegations
concerning the employment of corporate funds by Associated
Milk Producers, Inc., and others for the benefit of various
political candidates in the 1972 presidential campaign and
election. In this regard, we are interested in obtaining
certain information and materials from you, of course ,
at your convenience.
While we know that your schedule is extremely tight, the
Committee would appreciate it if you would consent to
meet with members of our staff. Members of our staff will
be in contact with members of your staff in the very near
future.
Thank, you in advance for your cooperation.
Sincerely,
Sam J, Ervin, Jr, -*
Chairman
SAM i. ERVIN, N.C.. CHUKMAM
MOWANO K. RAKER. J*_ TCHN, VICE CHAIRMAN
Ht»MSV E_ TAJ.MAOOE. <SA_ ECTWAHD J CUWNST f. PLA.
CAn.£:. K. I'-’JJtt. HAWAII Loweu. r. WEJCKO*. jr_ conn.
JOSCPH M. MSWTOTA. N. HOC
SAMUn. SASH
CMICP CSUNiO. AMO STArp DIRECTOR
Tats D. THOMPSON
MINORITY COUNSEL
SKJrtlS «_. EDMIsTEt*
DEPUTY COUNSEL
929
Attachment l to Chapter 7, page 2 of 2.
QICnHcb S^ictlcs ^Scuafe
SELECT COMMITTEE ON
PRESIDENTIAL CAMPAIGN ACTIVITIES
(pursuant to s. res. h, no conow ess)
Washington, d.C. 20510
February 7, 1974
Honorable Wilbur Mills
1136 Ionov, -orth House Office Bldg.
Washington, D.C.
Dear Congressman Mills:
This letter is intended as a follow-up to ay letter
to you on January 24, 1974, and is designed to provide
certain -specifics regarding the inquiries the Committee
wishes to make of you.
It has been revealed in public testimony before the
Committee that Gulf Oil Company contributed $15,000.00
in corporate funds to your presidential campaign, which
amount, we understand, has since been returned. It also
appears from evidence gathered by the Committee that
Associated Milk Producers, Inc. may have made corporate
contributions to your campaign, and may have paid for
certain services rendered your campaign by several
individuals.
We have absolutely no knowledge that you were contem-
poraneously aware of these circumstances. Nevertheless,
to fulfill our mandate under S. Res. 60, we feel it
necessary to speak with you respecting these matters.
The Committee would also 1 ike to era. mine certain records
in your files and our staff will promptly contact your
staff to specify the records we would like to see.
A member of the Committee will shortly be in touch -with
you concerning these matters. We hope that you, at your
convenience, can find time in your busy schedule to meet
'with a member of the Committee.
Thank you for your cooperation in these regards.
Sincerely,
F a ; n J . E r v i n , J r .
Che iceman
SAM J. rjTVlH, N.C.. CHAIRMAN
K. BAKER, Jt, TCNN, VICE CHAIRMAN
t TAi.MAC.Ot. OA. rtWAXD J. C.TNCT. flA.
r Af..Ev ic, t’l'M re. mawaji umfu. r. warxet j tu, conn.
JOSEPH **. MONTDTA, K. HEX.
SAMURl CASH
CM1EP COUHSn. AM STATE DIRECTOR
TRE3 D. THOMPSON
MINORITY COtNSO.
PUrtJT U EDM l STEM
Ouputy counsel
CHAPTER 8
The Hughes-Rebozo Investigation and Related Matters
INTRODUCTION
S. Res. 60 mandated the Senate Select Committee to conduct investi-
gations relating to “any transactions or circumstances relating to the
source, the control, the transmission, the transfer, the deposit, the
storage, the concealment, the expenditure or use in the United States
or in any other country, of any moneys or other things of value col-
lected or received for actual or pretended use in the Presidential elec-
tion of 1972 * * *” That resolution further mandated this committee
to “determine whether any money as described above had been placed
in any secret fund or place of Storage for use in financing any activity
which was sought to be concealed from the public, and if so, what
disbursement or expenditure was made of such secret fund, and the
identities of any person or group of persons or committee or organiza-
tion having any control over such secret fund or the disbursement or
expenditure of the same.”
This report reflects the results of the committee’s investigation into
the receipt, storage, concealment and expenditure of cash contributions
by Charles G. Rebozo and related matters. The contributions examined
included the receipt by Rebozo of $100,000 in cash from Howard
Hughes and $50,000 in cash from A. D. Davis.
The investigation was extensive and touched, at times, on incidents
involving Presidential aides and a wide diversity of Government
agencies, including the Department of Justice, the Internal Revenue
Service, the Treasury Department, the Atomic Energy Commission,
the Civil Aeronautics Board, the Federal Reserve Board, the Federal
Bureau of Investigation, and the Central Intelligence Agency. Indeed,
the list of witnesses interviewed by the committee reflects the number
of significant Government officials, past and present, who both aided
and inhibited the investigation of this matter. 1
The committee received complete, unstinting cooperation from cer-
tain departments and agencies, including the Department of Justice
and its Antitrust Division, the AEC, the CAB, and the Securities and
Exchange Commission, all of whose efforts contrasted sharply with
other w itnesses and departments of the Government. However, signifi-
cant conflicts in testimony could not be conclusively resolved by the
committee because crucial documents and testimony were not produced
in response to subpenas issued by the committee. The principal wit-
nesses who refused to comply fuily with subpenas and provide docu-
ments and testimony included Charles G. Rebozo — for personal doc-
uments and in his capacity as president of the Key Biscayne Bank —
F. Donald and Edward Nixon and a number of Hughes’ employees.
1 See appendix for list of witnesses interviewed, p. 1075.
(931)
932
In addition, the committee, in its letter to the President’s counsel on
June 6, 1974, provided substantial evidence relating to Rebozo’s use of
cash funds to the direct benefit of President Nixon. The purpose of the
letter, sent by Senators Ervin and Baker, was to provide “the Presi-
dent an opportunity to comment on this material prior to the filing of
this report.” The committee also hoped to obtain information and
documents that would assist in its review of the evidence set forth
in the letter. 2 Unfortunately, counsel to the President, in his response
of June 20, 1974, chose not to respond to any of the specific evidence
on which the committee sought clarification and additional informa-
tion except to deny that the President instructed “Rebozo to raise and
maintain funds to be expended on the President’s personal behalf.” 3
In addition, Chairman Ervin, by letter on June 21, 1974, and sub-
pena, sought to afford Mr. Rebozo an opportunity to respond to the
information contained in the letter to the President’s counsel. Any
assistance Mr. Rebozo’s testimony may have afforded the committee
in its review of these matters was precluded, however, when the wit-
ness left the country and became unavailable for service of the subpena.
Section I of the report provides a brief description of the Hughes
Nevada operations and Hughes’ interest in political contributions.
Section II describes the background and initial discussions of the
principals that culminated in the delivery of $100,000 in cash to Rebozo
from Hughes. An abortive effort by Hughes’ representatives to deliver
$50,000 in cash to President-elect Nixon is described in section III.
Section IV describes Rebozo’s assignments on behalf of the Nixon
administration in 1969, including his efforts to raise funds and his
responsibility for President Nixon’s properties in Key Biscayne, Fla.
Section V includes an analysis of the delivery of two packages from
Hughes of $50,000 each to Rebozo. This section also reviews evidence
relating to whether Rebozo retained or used any part of the $100,000
cash contribution including the efforts by the committee to determine
whether any of the currency returned to Hughes had, in fact, been cir-
culated after the dates of delivery to Rebozo.
Section VI describes the attempt by Howard Hughes to acquire the
Dunes Hotel and Casino in Las Vegas and the discussions about the
pending acquisition between Hughes’ representative Richard Danner
and then Attorney General John Mitchell.
Rebozo’s fundraising role for the 1972 Presidential election is ex-
amined in section VII including his receipt of $50,000 in cash from
A. D. Davis in April 1972.
While Rebozo testified he retained the Hughes’ $100,000 contribu-
tion past the 1972 election hoping it could be used in 1974 or 1976, sec-
tion VIII describes his efforts to return $100,000 after the Internal
Revenue Service contacted him in 1973. This section reviews the con-
tacts Rebozo had with a variety of individuals including the President
and his aides during early 1973 regarding his ultimate decision to
return funds to Hughes.
Section IX reflects evidence received by the committee relating to
the initial IRS investigation of Rebozo and communications the Presi-
dent and his aides had regarding that investigation.
2 See letter from Senators Ervin and Baker to James St. Clair, dated June 6, 1974,
26 Hearings, exhibit 1.
3 See letter from James St. Clair to Senators Ervin and Baker, dated June 20, 1974,
26 Hearings, exhibit 2.
933
The issue of the possible use of the Hughes’ $100,000 is reviewed in
section X which includes an analysis of funds expended by Rebozo on
behalf of President Nixon. The analysis reviews the use by Rebozo of
his attorney’s trust accounts at two banks to pay for expenditures in-
curred for improvements to the President’s Key Eiscayne properties.
Conflicts in testimony relating to significant issues in the report are
analyzed in summary form in section XI.
Section XII is a brief summary of the matters related in this report
including a review of the President’s response-, through his counsel,
to Chairman Ervin and Vice Chairman Baker’s letter of June 6, 1974,
and the failure of Mr. Rebozo to appear before the committee to re-
spond to matters set forth in the report.
Finally, section XIII presents the legislative recommendations of
the committee based on this investigation.
I. HUGHES AND THE HUGHES NEVADA OPERATIONS
Howard Hughes moved to Las Vegas, Nev., in November of 1966.
Thereafter, Robert Maheu, a former FBI agent, contracted with
Hughes through his own company to provide management services for
hotels, casinos, and other holdings that Hughes began to acquire.
Maheu has stated that he was to report on these management matters
directly to Hughes and not to executives of Hughes Tool Co. 5
Maheu testified that as part of his management responsibilities, he
was consulted with regard to which political leaders should be sup-
ported through political contributions from Mr. Hughes. By 1969,
Hughes’ cash contributions were furnished from moneys from the
Silver Slipper Casino, since that entity was owned by Hughes as a
sole proprietorship. 6
Maheu has testified that Mr. Hughes was cognizant of and approved
of all political contributions. Those contributions were perceived by
Hughes as insuring access and influence over significant political
leaders. 7
Because of evidence before the committee that Mr. Hughes had
pertinent testimony with regard to political contributions being in-
vestigated, the committee requested his appearance by letter which
was never answered. 8 Although a subpena for Hughes’ appearance
before the committee was approved by the committee chairman, it
could not be served because Hughes has remained out of the country
during the entire period of the committee’s investigation.
II. BACKGROUND OF THE CONTRIBUTION
COMMITMENT
The Hughes contribution of $100,000 to President Nixon’s 1972
reelection campaign, which Richard Danner delivered to C. G. Rebozo,
5 Maheu IRS interview, Aug. 30, 1971, p. 2.
„ - 6 Thomas Bell interview, Dec. 18. 1973: Robert L. Morgan executive session, Dec.
11. 1973, pp. 24-38, 190-204 : Robert Maheu interview, Jan. 20, 1974.
7 Robert Maheu, SEC deposition ; Mar. 9, 1973, vol. 3, p. 303. See also memo Hughes
to Maheu, undated ; a copy of the memorandum can be found in the committee files but
one says m pertinent part :
Bob, as soon as this predicament is settled, I want you to go see Nixon as my
special confidential emissary. I feel there is a really valid possibility of a Republican
victory this year. If that could he realized under our sponsorship and supervision every
inch of the way then we would be ready to follow with Gov. Paul Laxalt as our
next candidate.
8 For copy of letter, see 26 Hearings , exhibit 4.
934
was first committed, as to the first $50,000, during the 1968 Presiden-
tial campaign. Some facts relating to the early social and political ties
of Danner, Rebozo, and the President, leading up to this commitment
and the failure to fulfill it in 1968, are pertinent to an understanding
of the ultimate delivery of the Hughes contribution.
Dick Danner served as the FBI special agent in charge of the Miami
area from 1940 until J anuary 1946, when he resigned from that post
to manage George Smathers’ first primary campaign for Congress. 9
Danner recalls meeting Charles G. Rebozo in 1940, when he first came
to Miami with the FBI. 10 Rebozo does not recall meeting Danner un-
til 1946, when he saw him at the El Commodore Hotel in Miami when
Smathers made his decision to run for Congress. 11 Rebozo, a friend of
Smathers from elementary school days, also played an active role in
the successful 1946 Smathers’ campaign.
President Nixon was also first elected to Congress in 1946, and he
and then-Congressman Smathers became good friends in the House of
Representatives. Congressman Nixon occasionally vacationed in
Florida with Smathers, and on one of these visits in 1947. Smathers
introduced Congressman Nixon to Dick Danner. 12 After the 1950 elec-
tion, when both Smathers and Nixon were elected to the TT.S. Senate,
Smathers invited Senator-elect Nixon down to Florida for a vacation.
After staying with Dick Danner in Vero Beach for a few’ days, Danner
and Senator-elect Nixon drove to Key Biscayne where Danner intro-
duced Nixon to Charles “Bebe” Rebozo. 13
A. Danner’s Version of Contribution Commitment
Danner testified that in the midsummer of 1968, he met with candi-
date Richard Nixon and Rebozo, and was asked to determine if
Howard Hughes would contribute to the Nixon campaign. 14 Danner
was certain that he had not initiated discussions with Rebozo about a
Hughes contribution, since in 1968 Danner had no association with
Hughes whatsoever, and “didn’t know any of the principals in-
volved.” 15 Danner was sure that either Mr. Nixon or Mr. Rebozo first
asked him to check on a possible Hughes contribution at their meeting
in 1968. 16 Danner’s diary reflects that this meeting with candidate
Nixon, Rebozo, and Danner could have occurred as early as April 10,
1968, or as late as July 10, 1968. 17
9 Danner was special agent in charge from 1940 until 1940 except for 1 V; years
when he was in the Dallas FBI office. See also Miami Herald, Thursday, Sept. 5. 1946, p. 1.
10 See Danner testimony in Maheu v. Hughes Tool Co., U.S. District Court Central Dis-
trict of California, May 3, 1974, p. 7771.
11 See Rebozo interview, Oct. 8, 1973, p. 3. See also Smathers interview, Jan. 10, 1974,
p. 1.
12 Danner interview, Aug. 30, 1973, p. 1. See also Danner testimony in Maheu v. Hughes
Tool Co p. 7770.
^ See Rebozo interview with Miami Herald, Nov. 1, 1973, p. 23-A ; see also Smathers
interview. Jan. 10, 1974, p. 3. See also Danner testimony in Maheu v. Hughes Tool Co.,
pp. 7770-71.
14 20 Hearings 9497, 9503. See also Danner diary, 1968.
Danner placed his meeting with Rebozo and Nixon as a few weeks prior to his meeting
with Ed Morgan, which was in late August of 1968. 20 Hearings 9503. However, Danner
also recalled that at the same meeting, candidate Nixon or Rebozo also asked him to check
with Clint Murchison, Jr., about the possibility of a contribution from him. Danner’s diary
shows that he met with Murchison on or about Tuesday, June 4, 1968, which would place his
meeting with Nixon and Rebozo prior to June 4, 1968 ; 26 Hearings, exhibit 4A.
15 20 Hearings 9503.
18 20 Hearings 9504.
17 See Danner diary from 1968 on Apr. 10, May 17, July 10. 26 Hearings , exhibit 5.
935
Danner testified that Rebozo “suggested the possibility that I discuss
the matter with Ed Morgan.” 18 Danner was unsure how Rebozo knew
that Morgan represented Hughes, but Danner’s diary from 1968 indi-
cates a long-distance call from Danner to Rebozo on July 23, 1968,
during which they discussed Mr. Edward P. Morgan. 19 Danner agreed
to talk to Morgan about a possible contribution from Hughes, since
he had been working with Morgan on negotiating the sale of the
Tropicana in Las Yegas to the Winn-Dixie Co. (owned by A. D. Davis
and brothers) .
Danner’s diary reflects that he saw Ed Morgan on August 20 and
August 21, 1968, and Danner testified that he asked Morgan about a
possible Hughes contribution to the 1968 campaign. 20 Morgan said
he would check on the matter with Robert Maheu and get back to
Danner as soon as possible. 21 Following this meeting with Morgan,
Danner’s diary shows a call to Rebozo and Richard Nixon to discuss
the subject of campaign funds and Howard Hughes, among other
topics. 22
Morgan called Robert Maheu in Las Yegas and explained to him
that Bebe Rebozo, through Richard Danner, wanted to know whether
Howard Hughes would be willing to make a contribution to the Nix-
on campaign. 23 Maheu also recalls that Morgan mentioned that $50,000
was the requested amount for the contribution and that the contribu-
tion should be transmitted in cash. Maheu said he told Morgan that
he would take the matter up with Howard Hughes. 24
According to Maheu, Hughes felt that contributing through Rebozo
was a good means of insuring access to Nixon were he elected Pres-
ident. Therefore, Hughes authorized $50,000 cash delivery to the 1968
Nixon campaign according to Robert Maheu. 25 Maheu relayed the
approval of Hughes to Edward P. Morgan, and suggested that Mor-
gan, Rebozo, and Danner meet to arrange the mechanics of the
delivery. 20
Morgan recalled that shortly after he had transmitted this infor-
mation to Danner, Danner told him that a meeting was arranged at
Rebozo’s suite at the Mayflower Hotel to discuss the mechanics for
delivering the contribution. 27
B. Rebozo’s Version
First, Rebozo states that it was Danner who first brought up the
subject of a possible Hughes contribution, and not Rebozo or candi-
date Nixon. 28 Second, Rebozo denied that there was any meeting
among Danner, Rebozo, and Nixon to discuss such matters with
Rebozo either during or after the 1968 campaign. 29
18 20 Bearings 9496. ‘
19 See Danner diary, July 23, 1968, 26 Hearings, exhibit 6.
20 20 Hearings 9504. Also see Danner diary. Aug. 20—21. 1968, 26 Hearings, exhibit 7.
21 Morgan interview, Dee. 5. 1973. n. 2 ; 20 Hearings 9497.
22 See Danner diary from Aug. 20 and Aug. 21, 1968, 26 Hearings, exhibit s. See also
interview with Ed Morgan, Dec. 5. 1973, p. 2, 20 Hearings 9497.
23 Morgan interview, Dec. 5, 1973. p. 2.
24 Maheu interview. Jan. 20, 1974 ; it was also Edward Morgan’s explicit understand-
ing that the contribution was to be in cash. (Edward Morgan interview, Dec. 5, 1973.)
25 Maheu interviews. Sept. 15. 1973. and Jan. 20, 1974.
20 Maheu interview, Jan. 20, 1974 ; Edward Morgan interview, Dec. 5, 1973.
27 Edward Morgan interview, Dec. 5, 1973.
23 21 Hearings 9940.
29 21 Hearings 9940, 9941.
936
Eebozo did acknowledge, however, that there were some occasions
in the 1968 campaign when Danner, President Nixon, and Eebozo met
together. 30
President Nixon has also issued denials that he met with Dick
Danner and Bebe Eebozo to discuss a contribution from Howard
Hughes. On January 16, 1974, Gerald Warren, Deputy White House
Press Secretary, responded to press accounts of Danner’s testimony
by saying, “We have denied that the President discussed [with Mr.
Danner] a possible contribution of any amount from Hughes.” 31 War-
ren also told the Washington Post that President Nixon has never
“discussed finances with Mr. Danner.” 32 However, the handwritten
notes in Danner’s own diary from 1968 indicate that on September 27 ,
1968, candidate Nixon called Danner “re finances.” 33
C. Meeting Among Danner, Eebozo and Morgan
Danner, Eebozo and Morgan met for breakfast on September 11,
1968. 34 At this meeting Morgan recalls explaining that a contribution
from Hughes of $50,000 in cash would be made to the Nixon campaign
if there were some assurance that Nixon would personally acknowledge
the receipt of the cash. 35 On September 9, 1968, Eobert Maheu had re-
ceived $150,000 in two checks from Nadine Henley of the Hughes or-
ganization, which was to be used in part for a campaign contribution
to Mr. Nixon. 36
Eebozo testified that “Morgan wanted to hand the money to the
President, himself,” but that Eebozo explained to Morgan that the
President would never personally accept a contribution. 37 In addition,
Eebozo testified that he felt uneasy about accepting a large cash con-
tribution from Howard Hughes through Edward Morgan because of
the 1956 loan from Hughes to F. Donald Nixon and because Ed Mor-
gan represented Drew Pearson. 38
Danner recalled no request by Morgan to pay the money directly
to candidate Nixon, as Eebozo claimed, but testified that, the contribu-
tion “was to be made through ordinary sources, not to the President,
not to the candidate, but whoever was handling his campaign funds.” 39
Danner also recalled that Eebozo indicated his willingness to handle
the Hughes contribution at this meeting. 40
Morgan recalled that he had merely asked for an assurance that
Hughes received an acknowledgement of the contribution, but that
30 Rebozo interview, Jan. 17, 1974, p. 1.
31 New York Times. Jan. 17. 1974. p. 30.
32 Washington Post, Jan. 17. 1974. p. Al.
33 See 1968 Danner diary. Sept. 27, 1968, 26 Hearings, exhibit 8. In addition, Danner
also testified that at his earlier meeting with candidate Nixon and Rebozo to discuss
the possibility of a Hughes contribution, one of them asked Danner to contact Clint
Murchison, Jr., about a possible campaign contribution. Danner agreed to make the
contact, and did in fact solicit a contribution from Murchison as reflected by Danner s
dairy on or about June 4, 1968, but Murchison had already made other arrangements to
contribute to the 1968 campaign. 20 Hearings 9504.
Murchison has advised the committee that he discussed a contribution with President
Nixon who told Murchison to give the contribution to him or Rose Mary Woods.
(Murchison interview !
84 See Danner diary Sept. 11, 1968, 26 Hearings, exhibit 9.
35 See Morgan interview, Dec. 5, 1973, p. 2.
33 See Henley exhibits No. 2 and No. 3, 24 Hearings 11528-29, and Henley interview,
Jan. 22, 1974.
37 21 Hearings 9943.
33 Ibid.
39 20 Hearings 9500-01.
40 20 Hearings 9499.
937
neither Rebozo nor Danner would give him such assurances at this
meeting. 41
D. New Yokk Meeting
Danner testified that sometime after the meeting in Washington,
D.C., when Edward Morgan explained that the contribution would
be forthcoming, Danner was told by Morgan that Bebe Rebozo would
be contacted to make arrangements for the contribution. 42 Danner said
that shortly after receiving this information, Danner traveled to
New York City to discuss some campaign matters with John Mitchell
and Maurice Stans. Danner initially testified that Edward Morgan
accompanied him on this trip, 43 but after discussing the matter with
Morgan, Danner stated that Morgan was not present in New’ York. 44
Danner recalled that Rebozo introduced him to Stans and Mitchell
in the New York campaign offices. 45 Danner recalled having a brief
discussion with Stans, and a longer discussion with John Mitchell
about the Florida Democrats for Nixon committee, as well as possible
campaign strategy. Danner testified that during his meeting with Mit-
chell and Rebozo in the late morning, Rebozo was called out of the meet-
ing to answer a telephone call directing him to meet with some Hughes
representatives who were allegedly handling the cash contribution
to the Nixon campaign. 46
Rebozo returned sometime later, 47 according to Danner, and was
“very angry and upset” because he learned that the meeting was to be
with F. Donald Nixon, older brother of President Nixon, and John
Meier, an employee of Robert Maheu and Howard Hughes and ac-
quaintance of F. Donald Nixon. 48
Danner recalls Rebozo telling him that Rebozo was not about to
see, talk to, or associate with F. Donald Nixon and John Meier or
have anything to do with them in the area of political contributions. 49
Therefore, Danner testified that Rebozo did not have the meeting
with John Meier and Donald Nixon and that no contribution from
Hughes was delivered at that time. Danner knew of no other attempts
to deliver the $50,000 cash contribution prior to the 1968 election.
Donald Nixon recalled that early in the 1968 campaign, John
Meier had some conversations with him about how Howard Hughes
had made arrangements to make a contribution to Mr. Nixon. Nixon
recalled that Meier commented to him that Meier and Robert Maheu
wanted to make some arrangements for a contribution. 50
Nixon also recalled that John Meier wanted to get together with
Bebe Rebozo and Donald Nixon in 1968 during the campaign. How-
ever, Nixon recalled that Bebe Rebozo canceled the meeting that was
supposed to be held among Meier, Nixon, and Rebozo when he found
out that John Meier was going to be involved. 51 Rebozo testified that
he met once with F. Donald Nixon and John Meier during the 1968
41 Morgan interview, Dec. 5, 1973, p. 2.
43 20 Hearings 9506.
43 See Danner interview, Aug. 30. 1973, p. 3.
44 20 Hearings 9506. Morgan also denies that he was in New York on that occasion
(Morgan interview, Dec. 5, 1973, p. 2).
45 Ibid.
43 20 Hearings 9508. In his affidavit for the IRS on July 5, 1973, Danner stated that
Rebozo spoke to John Meier on the telephone. However, Danner testified before the Select
Committee that he did not know with whom Rebozo spoke on the phone.
47 Danner was unsure whether he was still meeting with John Mitchell when Rebozo
returned. 20 Hearings t 9509.
48 20 Hearings 9506.
49 20 Hearings 9509.
50 See interview with F. Donald Nixon, Nov. 17, 1973, p. 5.
51 Id. at p. 6.
938
campaign, but that there was no connection between the meeting and
his refusal to accept the $50,000 contribution. 52 Rebozo testified subse-
quently that the presence of Meier and Nixon in New York “would
have added to my [Rebozo’s] rationale” in refusing to accept the
money. 53
Danner testified that his meeting in New York with Rebozo and
Mitchell occurred after his meeting with Morgan and Rebozo in
Washington, D.C. However, hotel records from New York hotels
from the summer and fall of 1968, indicate that the only dates on
which both John Meier and F. Donald Nixon were staying in New
York, were from July 7 through July 10, 1968, at the New York
Hilton. 54 In addition, John Meier testified before the SEC that he
had dinner with Donald Nixon on July 8, 1968, at which time he met
Bebe Rebozo. 55 Furthermore, Danner’s own 1968 diary shows that
Danner was in New York City on Monday, July 8, 1968, for meetings
with “John Mitchell, Tom Evans, et al.” 56 Finally, former Attorney
General John Mitchell recalled meeting Dick Danner in New York
prior to the Republican Convention in the summer of 1968. 57 Mitchell
recalled that Howard Hughes contributed to the 1968 campaign, but
he could not recall any discussion of the contribution at his summer
meeting with Danner. 58
Nadine Henley, senior vice president of the Summa Corp., testified
that on July 30, 1968, 3 weeks after the New York meeting, Robert
Maheu told her that Howard Hughes had approved a $50,000 con-
tribution to both the Nixon and the Humphrey Presidential cam-
paigns. 59
III. ATTEMPTED CONTRIBUTION AT PALM SPRINGS
Robert Maheu’s telephone messages indicate that he was called on
November 22, 1968, by a Stephen Craig of President-elect Nixon’s
office concerning a possible campaign contribution since the campaign
had a deficit of $800, 000. 60
Maheu recalled having a conversation with Howard Hughes after
the election in which Maheu was instructed to make arrangements
through then-Governor Paul Laxalt to make the promised $50,000
cash contribution to President-elect Nixon.
Maheu testified that he approached Governor Laxalt who agreed
to do what he could to help Maheu effect the delivery of the con-
tribution. Former Governor Laxalt, however, recalled that Maheu
contacted him sometime after the 1968 election to discuss fulfilling a
campaign pledge made through Robert Finch to National Republican
Campaign Committee. 61
Laxalt recalled that he agreed to set up a meeting between Maheu
and representatives of President-elect Nixon during the Republican
62 Rebozo interview, Oct. 8, 1973.
53 21 Hearings 10121.
54 See New York Hilton Hotel Records, July 1968, 26 Hearings , exhibit 10.
65 Meier interview with the SEC. Oct. 23, 1973, p. 8.
58 See Danner diary. July 8, 1968, 26 Hearings, exhibit 11.
67 The Republican Convention was from Aug. 5 to 8, 1968.
^Mitchell interview, Oct. 18, 1973, p. 6. Mr. Mitchell refused to testify further about
this matter after the Oct. 18 interview on advice of counsel pending the outcomes of his
criminal trials.
60 See Henley interview, Jan. 22, 1974, p. 3. See also Nadine Henley exhibit 1, 24 Hearings
11526.
60 See Maheu’s telephone logs, Nov. 22 1968, 26 Hearings, exhibit 12.
61 Paul Laxalt interviews, Oct. 11, 1973 and Dec. 20, 1973.
939
Governors’ Conference in Palm Springs, Calif., on December 6,
1968. 62
Laxalt says that he had no plans to contact anyone in particular
on the Nixon staff to arrange for the delivery and that he certainly
did not contemplate or plan any Maheu-Nixon meeting. 63
Robert Finch recalled only that former Governor Laxalt called
him to set up a meeting of the Western Governors with President-
elect Nixon. 64
Finch said he had no knowledge of any meeting between Robert
Maheu and President-elect Nixon. 66
Nadine Henley recalled that in early December 1968, Robert Mahen
requested $50,000 in cash from her in order to make a campaign con-
tribution to Richard Nixon to cover campaign deficiencies in the 1968
campaign. 66
In addition, on December 5, 1968, Robert Maheu received $50,000
in $100 bills from the cage at Sands Casino. 67 Therefore, Robert
Maheu appears to have received approximately $100,000 in $100 bills
on or about December 5 and 6, 1968, prior to his trip to Palm Springs.
Perhaps coincidentally, on Thursday, December 5, 1968, Richard
Danner flew from Miami to Las Vegas to have discussions with
Robert Maheu about possible employment by the Hughes Tool Co. as
manager of the Frontier Hotel. 68
Danner testified that he met with Robert Maheu and others in the
late afternoon of December 5, 1968, and that he also saw Maheu again
on December 6, 1968. Danner testified that the substance of their dis-
cussions solely concerned his possible employment. Danner empha-
sized that there was no discussion whatsoever of any campaign con-
tributions, nor was Danner given any cash by Maheu during the time
he was in Las Vegas. 69
On November 29, 1912, Danner told an agent of the Internal Reve-
nue Service that Danner and Maheu began discussing the prospective
contribution “shortly after the 1968 election, which preceded his em-
ployment with Hughes Tool Co.” 70
Danner’s diary from 1968 shows that on Thursday, November 21,
Danner received a long-distance, call from Bebe Rebozo about a
“house project.” Danner’s diary shows five more telephone conversa-
tions with Rebozo in the week following November 21, and then a
call from Danner to Rebozo on Friday, November 29, about the
“project.” 71 Danner testified that he could not recall what the “house
project” was or the substance of his conversations during that time
with Rebozo. This time period in late November, shortly before Danner
traveled to Las Vegas to meet with Robert Maheu, also coincided
with the initial discussions in Florida about the purchase by President-
elect Nixon of the Key Biscayne home of former Senator George
Smathers. However, Danner testified that he played no role in the
.« Ibid.
03 See Paul Laxalt interview, Oct. 11, 1973.
64 Pinch interview, Nov. 1973, pp. 1-2.
« Ibid,
68 Nadine Henley interview, pp. 3-4, Jan. 22, 1974. See later section for fuller explanation
of source of money.
67 See fuller explanation in following' section on sources of funds.
88 See Danner diary, Dec. 5, 1968, 26 Hearings, exhibit 13.
69 24 Hearings 11448—49.
79 IRS memo, Nov. 29. 1972.
71 See 1968 Danner diary, week of Nov. 21-28 and Nov. 29. 26 Hearings, exhibit 14.
940
purchase by President Nixon of his Key Biscayne home and that he
could not recall what the “house project” was. 72
President-elect Nixon flew to Palm Springs for an appearance at
the Republican Governors’ Association Conference on December 6,
1968. There he met for talks with small groups of Governors on the
terrace of the Walter Annenberg home where he w T as staying. 73 Maheu
recalled that he received the money from Henley and flew to
Palm Springs with Paul Laxalt. Maheu also recalled driving to the
Annenberg residence where Nixon was staying, and while Maheu
waited in the car with the money, Laxalt went in the home to make
arrangements for the delivery. Maheu recalled that Laxalt returned
to the car and said that Nixon’s schedule prohibited any meeting with
Robert Maheu. 74
Danner testified that he was not aware of the attempted delivery at
Palm Springs by Maheu until after he had joined the Hughes Too]
Co. in early 1969. 75
When Richard M. Nixon was inaugurated President of the United
States on J anuary 20, 1969, the $50,000 contribution committed initial-
ly by Edward P. Morgan in the summer of 1968, had still not been
delivered to the Presidential campaign.
IV. REBOZO’S 1969 RESPONSIBILITIES
A. Introduction
There is evidence before the committee indicating that in 1969
Charles (Bebe) Rebozo exercised a number of responsibilities on be-
half of the White House and President Nixon. These simultaneous
assignments included the following :
1. Fundraising for the use of the administration ;
2. The disbursal of funds for various administration-connected
projects ;
3. Acting as agent for President Nixon in the purchase, improve-
ment, and maintenance of his home in Key Biscayne, Fla. ;
4. Fundraising for the President’s reelection campaign.
B. Fundraising
On February 17, 1969, H. R. Haldeman wrote a confidential memo-
randum to John Ehrlichman which stated in part :
Bebe Rebozo has been asked by the President to contact
J. Paul Getty in London regarding major contributions.
Bebe would like advice from you or someone as to how
this can legally and technically be handled. The funds
should go to some operating entity other than the national
committee so that we can retain full control of their use.
Bebe would appreciate your calling him with this advice as
soon as possible since the President has asked him to move
quickly. [Signed] H. 76
72 24 Hearings 11426.
73 See New York Times, Dec. 7, 1968, p. 1, col. 4.
74 Robert Maheu interview, Jan. 20, 1974.
75 24 Hearings 11448.
76 See Haldeman memo to Ehrlichman, dated Feb. 17, 1969. 26 Hearings, exhibit 15.
941
H. R. Haldeman stated through his attorney that he recalled that
Rebozo attempted to obtain a contribution from J. Paul Getty. 77
Edward L. Morgan said in an interview that shortly after his
appointment to the White House staff in early 1969, he was called by
John Ehrlichman. 78 Morgan said that Ehrlic h m an requested his ad-
vice on whether a contributor like J. Paul Getty could give $50,000
to the administration to be used for social events at the White House
until July 1969, when a new budget appropriation would be available
for such purposes. 79 Morgan stated that he called Chuck Stuart, a
friend of his in the White House who also worked for Ehrlichman, to
discuss the matter, and that they agreed that using private contribu-
tions to fund White House social functions was inappropriate. 80 Mor-
gan also said that he advised Ehrlichman that he and Stuart
agreed that private contributions for such social functions were
inappropriate. 81
Rebozo testified that Herb Kalmbach asked him to make an appoint-
ment for Kalmbach with J. Paul Getty for the purpose of obtaining a
contribution for the 1972 election. 82 Rebozo testified that he had not
been asked by anyone else to speak to Getty himself nor had he been
requested by anyone else to obtain money from Mr. Getty. 83
Herbert Kalmbach testified that Rebozo had asked Kalmbach to
solicit funds from Mr. Getty for the 1970 senatorial campaign pro-
gram. 84 Kalmbach also testified that Rebozo “set it up for him to see
Mr. Getty in Europe.” 85
General Alexander Haig testified that President Nixon had advised
him that Mr. Rebozo had received campaign contributions frequently,
and that he “normally” or “generally” passed them on to the cam-
paign. 86 Haig further testified that he assumed that the time period
discussed by the President included 1969 through 1971. 87
In addition to this evidence concerning the contact with J. Paul
Getty in early 1969, Rebozo was also having discussions at about the
same time with Richard Danner about the possibility of a cash con-
tribution from Howard Hughes. These discussions are covered more
fully in a subsequent section of this report.
C. Disbursal or Funds
There is evidence indicating that Rebozo maintained a fund in
Florida to pay for administration-connected costs. In a letter of April
28, 1969, from Rebozo to Kalmbach, Rebozo wrote in part:
Over the weekend, I spoke with John Ehrlichman and ex-
plained to him that it had been decided that the larger balance
which I mentioned to you will be kept here in order to take
care of frequent administration-connected costs which arise
from time to time. 88
77 Information furnished by John Wilson, May 17, 1974.
78 Edward L. Morgan interview, June 10, 1974, p. 1.
79 Ibid.
80 Ibid. Stuart confirmed the conversation with Morgan, but recalled that he thought the
contributions should be made by check and not cash. (Stuart interview, June 20, 1974).
si Ibid.
82 21 Hearings 9975.
ss ibid,
84 21 Hearings 10181.
85 Ibid.
86 23 Hearings 11017.
87 23 Hearings 11018.
88 See letter from Rebozo to Kalmbach, dated Apr. 28, 1969, 26 Hearings , exhibit 16.
942
There is evidence indicating that the fund which Rebozo maintained
in Florida consisted of campaign funds. Rehozo testified that he re-
tained about $6,000 from the 1968 campaign because the campaign
owed him that amount for expenses that he had covered during the
campaign. 89 On April 15, 1969, Rebozo set up the Wakefield special,
account with a deposit of $6,000 from the “Florida Nixon for Presi-
dent Committee.” 90 Thomas H. Wakefield testified that he did not
know that this account was opened until later when Rebozo advised
him that he had established the account, and that both individuals
were signators. 91
On April 15, 1969, Jack Caulfield wrote to Herbert Kalmbach
a letter which said in part :
Listed below is a list of expenses incurred by myself and
another individual who shall remain nameless with respect to
matters of interest to J. I). E. 92
Caulfield’s bill totaled $320, and he concluded :
I would appreciate a check in the amount indicated above
to be mailed to my residence, 13 Carlton Road, Orangeburg,
N.Y. 93
On April 17, 1969, Kalmbach wrote a letter to John Ehrlichman,
which said in part :
Confirming our conversation of a few minutes ago, I’m in
the process of setting up one “trustee for clients” account at
the Security Pacific National Bank’s Newport Beach office
here in the Newport Center. The initial deposit will be in the
amount of $216.18 which was received from Bebe this date. I
will write checks to Jack Caulfield and whomever else you
may authorize to receive payments at such time as I receive
the additional funds. 94
Rebozo also sent Kalmbach an additional check for $200 on April
28, 1969, and a check from the Wakefield special account to Kalmbach
for $1,000 on July 17, 1969. 85 These funds were subsequently used by
Herbert Kalmbach to pay the expenses and salary of Anthony T.
Ulasewicz. 96
There is conflicting testimony concerning whether or not Rebozo
was aware of the purpose of the funds that he forwarded in 1969. Re-
bozo testified that he had advised Kalmbach after the 1968 election that,
he had leftover funds available and that subsequently Kalmbach re-
quested some of the funds to be sent to him. 97 Rebozo testified that
Kalmbach did not indicate nor did Rebozo ask what the purpose of the
funds was. 98
Kalmbach said that he was authorized by John Ehrlichman to con-
tact Rebozo about obtaining leftover campaign funds to pay for
Caulfield’s expense statement submitted to Kalmbach. 99 Kalmbach tes-
89 21 Hearings 9946.
90 26 Hearings, exhibit 17.
91 24 Hearings 11297-98.
92 26 Hearings , exhibit 18. The reference to J.D.E. apparently refers to John Ehrlichman.
*3 md,
94 26 Hearings, exhibit 19.
95 21 Hearings 10156 and 23 Hearings 10863.
96 23 Hearings 10860-61.
97 21 Hearings 9946.
98 21 Hearings 9947.
99 Kalmbach interview, June 13, 1974.
943
tified that he, then contacted Rebozo to obtain funds to pay for the
expenses of Caulfield and Ulasewicz. 1 Kalmbach testified that he dis-
cussed the nature of the activities of Caulfield and Ulasewicz with Re-
bozo, and that Rebozo specifically knew that the money was for Caul-
field and Ulasewicz. 2
Kalmbach’s notes also indicate that he called Rebozo during the
week of J uly 14, 1969, and that they discussed the payment to Ulase-
wicz as well as the payment of his expenses. 3
However, Rebozo testified that he was not aware of the purpose of
the funds that he forwarded to Kalmbach. 4
Rebozo also used funds to pay for personal expenses for President
Nixon from 1969 through 1973. These expense items are more fully
explained later in this report.
Finally, Larry Higby, formerly H. R. Haldeman’s administrative
assistant, testified that on or about April 30, 1973, at about the time
of Haldeman’s resignation :
_ * * * Mr. Haldeman told me that during one of the discus-
sions he had with the President at the time of, or immediately
after his resignation, the President indicated that Mr. Rebozo
did have some funds that could be made available to Mr.
Haldeman; and as I understand it, also to Mr. Ehrlichman
for the purpose of assisting in a legal defense. 5
Higby also testified that Haldeman advised him that Rebozo had
somewhere “in the neighborhood of $400,000 available to assist on
legal fees.” 6 Higby testified that he had confirmed the substance of his
testimony 2 weeks earlier in a telephone conversation with Haldeman. 7
D. Acting Agent for President Nixon at Key Biscayne
On the day following President Nixon’s inauguration in 1969,
Thomas H. Wakefield testified that he met with the President and
Bebe Rebozo at a White House staff reception. 8 Wakefield testified that
at this meeting with President Nixon and Rebozo, Wakefield was given
instructions concerning matters which resulted in expenditures in-
curred on behalf of President Nixon. 9 Wakefield refused to discuss
these instructions, claiming they were protected by the attorney-client
privilege. Wakefield also testified that this meeting with President
Nixon and Rebozo was the first occasion when Wakefield was informed
by the President that henceforth Rebozo would act as the President’s
agent for matters that Wakefield refused to describe. 10
Wakefield also testified that he attended a second meeting at the
White House with John Ehrlichman and Bebe Rebozo either later
the same day or the following day after Wakefield’s meeting with
President Nixon. 11 Wakefield again refused to disclose the substance
1 23 Hearings 10860.
2 Ibid.
3 26 Hearings , exhibit 20 ; see also 23 Hearings 10860-61.
4 21 Hearings 9948.
5 23 Hearings 11074.
6 23 Hearings 11082.
7 Ibid.
8 24 Hearings 11333-34, Wakefield refused to answer a number of questions about his
eonversations with President Nixon and Charles G. Rebozo because of the attorney-client
privilege Wakefield asserted with respect to both individuals.
9 Ibid.
10 Ibid.
11 Wakefield interview, June 24, 1974, p. 5.
35-687 0 - 74 - 61
944
of this conversation on the grounds of attorney-client privilege and
because “Mr. Rebozo was designated as agent in the beginning of the
conversation by Mr. Ehrlichman.” 12 Wakefield stated that some action
was taken as a result of his meeting with Ehrlichman and Rebozo, but
Wakefield declined to describe what occurred because of his attorney -
client relationship with the President. 13 As will be described more
fully in a section below, certain $100 bills were deposited among trust
accounts held by Thomas H. Wakefield, and were applied, for expendi-
tures on behalf of the President’s Key Biscayne homes at the instruc-
tions of Bebe Rebozo. 14
In addition, Richard Danner’s diary entry of November 21, 1968,
reflects: “L. D. from C. G. R. Miami RE: house project.” 15 Danner
testified that this notation reflected a telephone call with Rebozo, but
that Danner had “no recollection whatsoever of what house project
had to do with thait conversation.” 16 Danner did recall his friend for-
mer Senator George Smathers telling him that Smathers was going
to sell his house to President Nixon following the 1968 election, but
Danner had no recollection of discussing this sale with Bebe Rebozo. 17
Therefore, at the time in early 1969 when Rebozo and Danner again
began to discuss a contribution from Howard Hughes, there is evi-
dence indicating : Rebozo was already raising funds at the direction of
the President ; Rebozo was disbursing money from campaign funds
for various administration projects; and Rebozo was acting as agent
for President Nixon with respect to the purchase and maintenance of
his Key Biscayne homes.
V. DELIVERY AND RETENTION OF THE CONTRIBUTIONS
Introduction and Summary of Facts
The contributions that were finally delivered to Rebozo were the
culmination of the attempted deliveries during 1968 described earlier.
A contribution was discussed during the 1968 election and continued
to be an item of discussion thereafter among various parties, including
Hughes, Maheu, Danner, and Rebozo. The discussions were intense
in early December 1968, and continued into the spring and summer of
1969, when Rebozo chided Danner about Hughes’ generous support
of Democrats and less sizable support of President Nixon and Maheu
authorized a contribution to Rebozo.
The testimony on the deliveries of the money is voluminous and
often contradictory, and Danner, Maheu, and Rebozo maintained few
written records of the transaction. Rebozo testified that the money he
received from Danner remained unused in a safe deposit box from its
delivery to him — in two installments — until he returned it to agents
of Hughes in June 1973. That testimony has been challenged by other
testimony and evidence before the Select Committee.
The available testimony and evidence point to the following facts :
12 24 Hearings 11302.
13 Wakfield interview, June 24, 1074, p. 5.
14 See section on Use of the Money.
15 26 Hearings , exhibit 14.
10 24 Hearings 11425.
17 24 Hearings 11426.
945
1. The money for one of the deliveries to Rebozo was put together
in early December 1968.
— There is considerable testimony from various principals indicat-
ing that the first delivery consisted of money made available
in December 1968, and that it was maintained whole until the
ultimate delivery.
— In early December 1968, Robert Maheu and others acting on behalf
of Howard Hughes were deeply involved in attempts to make a
Hughes to Nixon contribution.
— Robert Maheu received $100,000 in cash in early December, $50,000
of which he tried to deliver to President-elect Nixon or one of
his aides at Palm Springs, pursuant to negotiations commenced
earlier in the year by Rebozo and Danner.
— Danner was in Las Vegas during this December 1968 period talk-
ing about joining the Hughes organization and, according to one
of Danner’s recollections, discussing political contributions with
Maheu.
-—Fifty consecutively numbered $100 bills among those Rebozo iden-
tified as the first delivery were, according to Federal Reserve
Board records and other "documentary evidence, delivered to the
Las Vegas bank used by Hughes casinos during this early Decem-
ber 1968 period.
2. The first delivery took place in 1969.
—In their initial interviews and testimony, the principals involved
in the deliveries agreed that 1969 was the year of the first delivery.
Maheu has continued to subscribe to that statement; Danner
changed his testimony after consultation with Rebozo ; and Re-
bozo changed from 1969 (in his first interview with the IRS) to
1970 (in subsequent testimony) as the year of the first delivery.
3. The first delivery to Rebozo occurred September 11 or 12, 1969,
in Key Biscayne, Fla.
- — When Danner joined the Hughes organization in February 1969,
there was an ongoing concern that the money be delivered soon.
— According to Danner, in the spring of 1969, he and Maheu noted
that the 1968 money was still intact and available for Rebozo, and
Danner told Rebozo that it was available. Not long before Sep-
tember 11-12, Maheu authorized a delivery to Rebozo.
— Robert Maheu has stated the first delivery took place in 1969.
— Danner’s first statement regarding this contribution substantially
comports with Maheu’s recollection of the first delivery.
— Danner’s testimony, until changed in July 1973, after consulta-
tion with Rebozo, was that the first delivery was in September
1969.
4. There is considerable evidence suggesting that the second de-
livery took place on July 3, 1970, or August 19-20, 1970, and there is
some evidence of a delivery on October 28-30, 1970.
— July 3, 1970 — According to Rebozo and Danner, this was the date
of a delivery at San Clemente. Both men have always contended
that one of the two deliveries was at San Clemente,, and Danner
946
testified this is the only time he was there. Only Rebozo testified
firmly that this was the first delivery. Maheu stated that both de-
liveries were at Key Biscayne.
— August 19-20, 1970 — If the first delivery were on July 3, the
second delivery would have been either August 19-20 or October
28-30. Danner and Maheu discounted the October date as too close
to the 1970 election for the money to have been used for congres-
sional campaigns.
Rebozo testified that the second delivery was in Key Biscayne,
following the July 3, 1970, delivery within a “matter of
weeks * * * [it] could have been 3 months * * * I don’t know.
I think I saw somewhere where Danner had indicated it was in
August and that would be correct.”
— October 28-30, 1970 — The strongest evidence supporting this late
1970 date is the statement of Thomas Bell, a Hughes lawyer, that
he gave $50,000 to Danner on October 26. Danner testified that he
did not receive money from Bell, however, and Danner and Robert
Maheu doubted a delivery so close to the 1970 congressional
election.
5. There is evidence suggesting that there may have been more
than two deliveries from Danner to Rebozo.
—The only way much of the conflicting testimony can be recon-
ciled is to conclude there were more than two deliveries of funds.
— There are four likely delivery dates: September 11-12, 1969; July
3, 1970 ; August 19-20, 1970 ; and October 28-30, 1970.
— Four packets of money have been identified as possible sources of
the deliveries: Early December 1968 (Sands Casino) : Decem-
ber 5, 1968 (Nadine Henley) ; July 11, 1969 (Nadine Henley) ;
and October 26, 1970 (Thomas Bell — Silver Slipper) .
6. Documentary evidence from the Federal Reserve raises a ques-
tion whether Rebozo maintained the two deliveries intact (see
below).
The following summary paragraphs should help the reader under-
stand the detailed information that follows :
Section A sets forth the testimony and statements of the prin-
cipals. There are numerous contradictions among the principals,
and most of them have contradicted themselves on key points.
Section B is an analysis of the possible sources of the contribu-
tions to Rebozo. Determining when and where the money for the
two deliveries was put together is directly related to an examina-
tion of Rebozo’s testimony that the money he received from
Hughes was the same money he returned to Hughes in June 1973.
The Hughes people involved in assembling the money for delivery
to Rebozo, notably Robert Maheu, have stated that the money
947
for each delivery remained intact from the time it was assembled
until the dates of delivery to Rebozo by Richard Danner,
Hughes’ agent. The Select Committee attempted to determine the
accuracy of that assertion, and it found no contradictory evidence
or testimony. In contrast, Rebozo’s testimony that he did not dis-
turb or use the money has been challenged by testimony and evi-
dence received by the Select Committee.
The available evidence suggests that $50,000 for one of the
deliveries was obtained in early 1968. In the money returned and
identified as the Hughes contribution 18 are numerous $100 bills —
in the package identified as the first delivery and in the package
identified as the second delivery — that were not available for
commercial circulation until after early December 1968. There-
fore, either the money was not kept intact from time of origin in
December 1968 until its delivery to Rebozo, or it was not kept
intact by Rebozo between its receipt and its return.
Section C analyzes the possible delivery dates and reaches the
conclusions summarized above.
Section D analyzes the testimony and evidence relating to the
storage of the Hughes contributions by Rebozo.
Section E compares the testimony and evidence relating to pos-
sible combinations of sources and delivery dates with the avail-
able Federal Reserve records. The comparison raises a question
whether the money Rebozo returned was the same money he
received.
For all possible combinations of delivery dates save one, there are
$100 bills in the money returned and identified as the Hughes contri-
bution that were not available for commercial circulation until after
one or both delivery dates. For example, if the first delivery was on
July 3, 1970, in San Clemente, and the second on August 19-20, 1970,
in Key Biscayne — a probable combination, according to testimony by
Danner and Rebozo — there are 35 bills in the money returned and
identified as the second delivery that were not available for commer-
cial circulation until after August 20, 1970. Those 35 bills, therefore,
could not have been delivered to Rebozo on August 19-20, but instead
would have been inserted into the package identified as the second
delivery at some later date before Rebozo returned the money. The
latest date of commercial distribution is October 1, 1970, when a 1969
series $100 bill, serial No. G02-134-916 A, was released to the Lake-
view Trust & Savings Bank of Chicago by the Chicago F ederal Reserve
Bank. The 35 bills are as follows :
18 The serial numbers which the Select Committee and the Federal Reserve System have
been tracing are those of the 1,001 Federal Reserve notes Rebozo returned. While the
contribution is generally referred to as a $100,000 contribution, Rebozo returned $100,100.
How and when the extra note got into the money is an unresolved question. The committee
has no evidence that a list of serial numbers was prepared when the money was put
together or when it was delivered.
948
FEDERAL RESERVE NOTES (IDENTIFIED AS PART OF 2D DELIVERY TO REBOZO) NOT AVAILABLE FOR COMMERCIAL
DISTRIBUTION UNTIL AFTER AUG. 19-20, 1970'
Date released to cash department,
Series
Serial
Federal Reserve Bank
Date released to commercial bank
1969
.. G02 134 916 A
Sept. 8, 1970 (Chicago) __
Oct. 1, 1970 (Lakeview Trust, Chicago).
1969
.. L02 012 307 A
Sept. 3, 1970 (Los Angeles)
... Sept. 23, 1970 (New National Bank, Las
Vegas, 4th and Bridger).
1969
BOO 745 268 A
Sept. 21, 1970 (New York)
1969
L02 044 519 A
Sept. 3, 1970 (Los Angeles)
Sept. 16, 1970 (New National Bank, Las
Vegas, 4th and Bridger).
1969
_. L03 169 610 A
Sept. 11, 1970 (Los Angeles)
Sept. 14, 1970 (New National Bank, La
Vegas, 4th and Bridger).
1969 ..
L03 201 320 A
Do.
1969 ....
.. L03 169 914 A
1969
.. L03 169 915 A
do
J 969
.. L03 170 246 A
1969 ..
_ 103 170 247 A
1969
.. L03171 517 A
1969
.. L03 171 653 A
do
1969
.. 103 201 337 A
do
Do.
1969
.. L03 202 841 A
1 963 A
.. H00 933 849 A
Sept. 8, 1970 (St. Louis)
1963 A _ _ .
.. L03 967 973 A
Sept. 3, 1970 (Los Angeles)
1963A...
__ 103S67 972 A
do... .
1969.
L01 996 101 A
1969
. .. L01 997 818 A
1969
L01 997 820 A
1969
L01 998 739 A
1969
L02 006 342 A
1969 .
L02 Oil 839 A
1969
L02 013 297 A
1969
L02 036 812 A
1969
L02 038 013 A
1969
L02 039 302 A
1969
L02 039 303 A
1969
L02 047 193 A
1969
LOl 998 424 A
1969
K00 853 653 A
Aug. 5, 1970 (Dallas)
Sept. 2, 1970 (Northwest National Bank,
Dallas).
1 963 A
... L03 778 452 A..
.. June 9, 1970 (Los Angeles)
Sept. 2, 1970 (Valley National Bank, Las
Vegas).
1963 A
L03 778 219 A
fla
1969
1969
.. LOl 455 29! A
.. LOl 447 735 A
Aug. 27, 1970 (Los Angeles) —
do
i For some of the notes listed below, records exist showing dates of distribution to commercial banks. For other bills,
however, records exist only through the date of release to a Federal Reserve Bank’s Cash Department. The dates of com -
mercial release for those notes would be on or after the dates of release to cash departments.
It is possible that the second delivery was not made until late Octo-
ber 1970 (as discussed in section V.C.), in which case the Federal
Reserve evidence does not contradict Rebozo’s testimony. The October
date, however, is less probable than several other dates, as explained
in section Y.C.
A. Testimony and Statements of the Principals
The testimony and statements by the key participants concerning
the deliveries of the Hughes $100,000 do not conform in many key
respects. Most of the people involved have changed their testimony and
statements as the investigation progressed. The only consistent asser-
tion of all principals has been that there were only two deliveries.
When initially questioned about the deliveries, the various parties —
Robert Maheu, Peter Maheu, Danner, and Rebozo — placed the date
of the first delivery within about 1 year of the November 1968 elec-
tion. 19 As the investigation intensified, from about the time Rebozo
10 Citations for the statements made by the various parties are in the lengthier discussions
below.
949
returned the money in June 1973, 20 the parties began recalling later
delivery dates. Other differences in testimony have occurred, including
significant changes regarding locations of deliveries and number of
people present. For example, Robert Maheu has stated that he was
present at a delivery in Key Biscayne. Danner initially so testified,
but. later, after talking with Rebozo, changed his testimony to agree
with Rebozo’s testimonv that Maheu was not present.
Testimony about the Hughes-Rebozo contribution has been extensive
and varied. In addition to the staff interviews and sworn testimony in
sessions before the Select Committee, testimony concerning the con-
tribution can be found in the Maheu v. Hughes Tool Go. civil litiga-
tion; 21 the interviews and depositions relating to the Securities and
Exchange Commission’s investigation of the acquisition of Air West
by Hughes ; 22 and the interviews and affidavits furnished to the Select
Committee by the Internal Revenue Service, pursuant to a Senate
resolution. 23
The following summary is not exhaustive and must be read in con-
junction with the later sections of the report analyzing the contribu-
tion.
1. RICHARD DANNER
In February 1969, Richard Danner commenced his employment
with Hughes Tool Co. as general manager of the Frontier Hotel. 21 His
responsibilities also called for him to serve as liaison for the Hughes
entities and the Nixon administration. 25 According to Robert Maheu,
Hughes was especially pleased that Danner joined the Hughes opera-
tion inasmuch as the 1968 campaign contribution still remained un-
delivered, and Danner, with his connections with Rebozo, could read-
ily remedy this problem. 2 "
While Danner’s recollection has been unclear about the dates of
deliveries, who was present and who provided the money to him, he
testified with certainty about the circumstances leading up to the de-
cision to make the $100,000 in cash available to Rebozo.
Danner testified that, in the spring of 1969, he had frequent con-
tacts with Rebozo during which Rebozo was “needling” 27 him about
Hughes’ apparent favoritism toward the Democrats by making a
large contribution available to then- Vice President Humphrey in
1968, by having Larry O’Brien on retainer, and by employing Senator
Humphrey’s son. 28 Danner testified that he brought Rebozo’s comments
to Maheu ’s attention and that shortly thereafter Peter Maheu, Robert’s
son, showed Danner cancelled checks reflecting payments to various
Nixon-Agnew committees during the 1968 campaign. 29 Danner testi-
fied that he related that information to Rebozo and “he [Rebozo] still
felt that that was not comparable to what they had done for
Humphrey.” 30
20 The return of the money is described in section VIII below.
21 Robert A. Maheu v. Hughes Tool Co. s Civil No. 72-305 HP, U.S. District Court for the
Central District of California.
22 Securities and Exchange Commission, Case No. HO590 ; information from the Com-
mission was furnished to the Select Committee pursuant to a letter of disclosure. William
Turner, a lawyer with the SEC, was particularly helpful.
^ See Senate Resolution 288, 93d Congress, 2d session.
24 20 Hearings 9511.
25 Robert A. Maheu interview, Jan. 20, 1974.
28 Ibid.
27 20 Hearings 9512.
28 20 Hearings 9529-30.
29 20 Hearings 9501.
30 20 Hearings 9512.
950
Danner then told Rebozo that the $50,000 undelivered at Palm
Springs was still intact and available. 81 According to Danner’s testi-
mony, Rebozo declined the offer. 32 The contribution came up a short
time later, in May or June 1969, when Danner testified that Rebozo
raised the “question of whether Mr. Hughes would contribute to funds
to begin taking polls on candidates for the 1970 congressional elec-
tions ...” 33 According to Danner, he then discussed this matter with
Maheu, who said that the undelivered $50,000 was available and that
an additional $50,000 could be committed. 34
Danner’s only other consistent testimony has been that there were
only two deliveries, one at San Clemente and one at Key Biscayne.
Danner testified that Robert Maheu told him the money for the first
delivery was in the safe-deposit box at the Frontier Hotel. 35 It was
either brought to Danner by Peter or Robert Maheu, or Danner picked
it up himself from the safe-deposit box. 36 He did not count the bills
upon receipt but did note that they were bundled in packages of $5,000
each. 37
In a transcribed question-and-answer session with the IRS on May
15, 1972, the first time he was questioned on the $100,000, Danner stated
that the first delivery took place at Key Biscayne in the late summer
of 1969, where Robert Maheu handed the package to Rebozo, and that
the second delivery was at San Clemente at an unspecified later date. 38
According to a contemporaneous memorandum, he told an IRS agent
on November 29, 1972 (in a telephone conversation) that the first de-
livery in Key Biscayne was in September 1969, and the second delivery
in San Clemente on July 3, 1970. 39
In a July 5, 1973, affidavit filed with the IRS as a correction to his
May 15, 1972, questioning, Danner changed his prior statement. He
said he was certain that the first contribution, not the second, took place
on July 3, 1973, at San Clemente, with only Rebozo and Danner pres-
ent, and that the second contribution was made in Key Biscayne on
August 19-20, 1970, 40 again with only Rebozo and Danner present.
He stated to the Select Committee that he had been to the Western
White House at San Clemente only once, which his travel records show
to be on July 3, 1970. 41 Danner testified that he met with the President
and Rose Woods after the delivery to Rebozo at San Clemente. His dis-
cussion with the President, Danner testified, focused on “the problems
at the White House getting entertainment . . . suitable for young
audiences and so on . . .” 42 and that there was no mention of the
contribution. 43 In his discussion with Rose Marv Woods, Danner testi-
fied that there was no talk about the purpose of Danner’s visit. 44 Woods
31 According to Danner, Maheu said “They can have that If they want it.” 20 Hearings
9513.
32 Ibid.
33 20 Hearings 9515.
34 20 Hearings 9516.
35 20 Hearings 9533. , ,
38 Danner has testified that, with regard to both contributions, he is uncertain who
delivered the money to him, noting that either $50,000 package could have come from either
Robert or Peter Maheu. 24 Hearings 11467. He has also testified that Thomas Bell did not
deliver either package to him. 24 Hearings 11466.
37 20 Hearings 9534.
58 20 Hearings 9534.
39 Interview of Richard Danner by IRS, Nov. 29, 1972.
40 Affidavit of Richard Danner, July 5, 1973.
41 20 Hearings 9538. Danner travel records, 26 Hearings , exhibit 21.
42 20 Hearings 9538.
43 20 Hearings 9539.
44 Ibid .
951
had no recollection of meeting Danner in July 1970 and said, in a staff
interview, that “I would not know Danner if he walked in.” 45
Danner testified that he was unable to explain why the first delivery
would not have been made until the summer of 1970, rather than in the
fall of 1969, shortly after the spring 1969 Rebozo-Danner discussions
of a possible contribution and Maheu’s authorization of the delivery. 46
2. ROBERT A. MAHETT
In his statements and testimony about the two $50,000 contributions,
Robert Maheu has provided conflicting information about sources of
the money and delivery dates.
First $.50,000 : When Danner joined the Hughes organization there
were on-going discussions between Hughes and Maheu about the un-
completed 1968 contribution. Maheu suggested Danner as the courier
for the funds, and Hughes agreed. 47
Maheu has provided conflicting statements on the origin of the
money. In September 1971, Maheu told the IRS that the first $50,000
came from the cashier’s cage at the Sands Hotel in early December
1968. 48 In a 1973 IRS interview, Maheu said the money consisted of the
same bills he received from Nadine Henley on December 5 and 6, 1968,
and turned over to Peter Maheu upon his return from the Palm
Springs Governors’ Conference. 49 In a later interview with Select
Committee staff, he said that he received the money for the first de-
1 ivery from Henley on July 11, 1969. 50
As to the first delivery, in a 1973 civil deposition Maheu testified that :
“Mr. Danner made the first delivery which would have been some-
time in, to the best of my recollection, sometime in 1969.” 51 Maheu
told Select Committee investigators that the delivery was made shortly
after Danner joined the Hughes corporation, which was in February
1969. 52 Later in the same interview, Maheu stated that the first de-
livery must have been sometime after July 11, 1969, the date on which
Henley sent him $50,000. 53
Similarly, Maheu has expressed uncertainty about the mechanics
of the first transaction, recalling only that it was his son, Peter, who
transmitted the money to Danner some time after the early December
1968 Palm Springs Governors’ Conference. 54
Maheu testified in a civil deposition that Key Biscayne was the
place of the first deliverv, recalling that Danner and he had flown
together on the DeHavilland to Miami to make the first delivery. 55
According to Maheu, the purpose of the first delivery was to fulfill
the pledge that had been made to the Nixon campaign in 1968. He
stated that both he and Hughes were concerned that they not appear
to be reneging on their commitments. 56
45 22 Hearings 10271.
46 20 Hearings 9533.
47 Robert Maheu interview. Jan. 20. 1974.
48 Interview of Robert A. Maheu by the IRS, Sept. 21 1971. See later section for a dis-
cussion of this possible source.
49 Robert Maheu IRS interview, Sept. 19, 1973. See p. 958 below for a discussion of this
source.
50 Robert Maheu Select Committee staff interview, Jan. 28, 1974. See p. 958 below for a
discussion of this source.
51 Robert Maheu civil deposition. July 4. 1973, p. 1037.
52 Robert Maheu interview, Jan. 20, 1974.
58 Ibid.
54 Robert Maheu civil deposition, July 4, 1973. p. 1096.
55 Robert Maheu civil deposition, July 4. 1973, p. 1076. For a discussion of the contribu-
tion during the 1968 campaign, see p. 933, supra.
56 Robert Maheu interview, Jan. 20, 1974.
952
Second $50,000 : Maheu has given different dates and different rea-
sons for this delivery. He is, however, certain that he was present
when an envelope filled with cash was passed to Rebozo in Key
Biscayne.
Maheu first told the committee staff he was contacted by Bob Hope
concerning a possible contribution of $50,000 to $100,000 to the Eisen-
hower Hospital. Maheu discussed it with Hughes, and Hughes sug-
gested that Maheu contribute $10,000 to the hospital and, at the same
time, pledge to the Nixon administration that Hughes would make
additional contributions to the congressional races. Hughes felt that
through that arrangement he would get more mileage out of the
administration. 57
In his July 4, 1973, deposition, where he first publicly discussed
Hughes’ political contributions, Maheu noted that the decision to make
the contribution was based on conversations with Danner, who told
Maheu of the political necessity of the contribution, rather than on
Hughes’ instructions relative to Maheu’s conversation with Bob
Hope. 58
In a civil deposition, Maheu testified that the money was trans-
mitted to Danner by Thomas Bell, a Hughes lawyer in Las Vegas in
early 1970. 59 Later, in a Select Committee staff interview, he said Bell
delivered it to Danner in the summer of 1970. 60 In his second staff in-
terview, he said that he had testified under oath to a Federal grand
jury investigating Hughes’ acquisition of Air West that the delivery
to Rebozo was made by Danner and him on February 3-5, 1970, in Key
Biscayne. 61
Finally, in that same interview, he stated that Thomas Bell’s testi-
mony that the money was taken from the Silver Slipper on October
26, 1970, plus the trip he and Danner took to Florida about that time,
led him to believe that the money could have been delivered in late
October 1970. 62
The second delivery, according to Maheu, occurred at Rebozo’s home
in Key Biscayne. Maheu saw the envelope pass from Danner to Rebozo,
who opened it but did not count the money. Rebozo then took the en-
velope, went into another room, and returned in a short time without
the envelope. The only conversation was something by Danner to the
effect of “here’s the second 50.” No one else was present and the three
immediately left in Rebozo’s car to go out for dinner. 63
3. PETER R. MAHEU
Peter Maheu has stated that he transmitted one $50,000 packet to
Richard Danner. Robert Maheu, Peter’s father, has testified he in-
structed him to do so, 64 and Richard Danner has testified that he
possibly received money from Peter Maheu. 65
i V IU/.
58 Robert A. Maheu civil deposition, July 4, 1973 vol. XII, pp. 1025-27. See the dis-
cussion of the Dunes, p. 980 below, for a more detailed discussion of what Maheu understood
the political necessity of the contribution to be.
59 Robert Maheu civil deposition, July 4, 1973, p. 1026.
80 Robert Maheu interview, Sept. 15, 1973, p. 15.
01 Robert Maheu interview, Jan. 20, 1974.
62 Ibid.
82 ibid.
84 Robert A. Maheu civil deposition, July 4, 1973, p. 1096. As noted in the sections
detailing Robert Maheu’s testimony, there is conflict concerning when Peter Maheu re-
ceived this money from his father.
85 Richard Danner civil deposition, Sept. 4, 1973, p. 48. Danner’s recollection is not clear
on the event.
953
Peter Maheu recalled that he received the money at his father’s
house in 1969 from his father, who asked Peter to take it because
Robert Maheu’s safe was not working at the time. Peter Maheu stated
that the money was wrapped in packets of 50 bills with a standard
bank wrapper around each packet and that the bills were not new. 66
Peter Maheu only recalled his father saying “something to the
effect that the money was for political contributions, and to place it
in my safe and disburse it at his direction.” 67 Peter Maheu stated
that the source of t'he money was the Silver Slipper Casino in Las
Vegas, which Hughes owned in his own name and used for political
contributions. 68
Peter Maheu took the money home, removed it from the envelope,
and put it in his safe. 69 He kept the money for a short period of time,
perhaps 3 weeks, 70 at which time his father instructed him to deliver
it to Danner, explaining, as Peter remembered it, that “Danner was
bringing the money to Mr. Rebozo. Mr. Rebozo was going to give the
money to Mr. Nixon.” 71 Peter then took the money to Danner at the
Frontier Hotel. According to Peter, his meeting with Danner was
“extremely short,” and he just “dropped off the money * * * .” He
may have told Danner to “have a good trip.” 72 Peter Maheu was con-
fident that Danner went to Florida to deliver the money 73 and was
sure that his father did not accompany Danner on that trip. 74
Finally, Peter Maheu (in his staff interview) stated that someone in
his father’s office gave him a typed sheet of paper to be signed by
Richard Nixon acknowledging Nixon’s receipt of $100,000 from
Hughes. 75 Danner told Peter Maheu that Nixon will “never sign it.” 78
and Maheu has been unable to find the document.
4. THOMAS G. BELL
According to Robert Maheu, 77 the second $50,000 contribution was
transmitted to Richard Danner by Thomas Bell, a Hughes attorney
in Las Vegas. In a Select Committee staff interview, Bell stated that
he was involved in only one delivery of money to Richard Danner,
$50,000 delivered at the direction of Robert Maheu in October of 1970. 78
Bell reasoned that this time was a delivery date by examining the
Silver Slipper disbursement forms and noting that he delivered the
money in one lump sum just prior to the congressional election of 1970.
Since he never had as much as $50,000 in a lump sum other than on
October 26, 1970, w T hen he withdrew $115,000 from the Silver Slipper,
he stated that this withdrawal was the source of the money for
Danner. 79
On the date of withdrawal, he received a call from Robert Maheu,
who, with a great sense of urgency, said that Hughes wanted the money
08 Peter Malieu Interview, Nov. 29. 1973, p. 5.
07 Peter Maheu, civil deposition, Mar. 29, 1973, p. 72.
68 Id. at p. 74.
69 Peter Maheu interview, Dec. 4, 1973, p. 5.
70 Ibid.
71 Peter Maheu civil deposition, Mar. 29, 1973, p. 77.
72 Ibid.
73 Id. at p. 80.
74 Peter Maheu interview, Dec. 4, 1973, p. 6.
75 Peter Maheu interview, Dec. 4, 1973, pp. 7-8. The document was an undated and un-
signed white sheet of paper 8% " X 5% ", according to Maheu.
76 Ibid.
77 Civil deposition of Robert A. Maheu, July 4, 1973, pp. 1025-1027.
78 Thomas Bell interview, Dec. 17, 1973. p. 7.
79 Ibid.
954
delivered to Danner. 80 Bell went to the Silver Slipper, got the money,
and immediately delivered it to Danner in Danner’s office at the
Frontier Hotel. Bell recalled no conversation with Danner. Bell stated
that the same day, or early on the next day, he made a local call to
Maheu to announce that the money had been delivered. 81
Bell said there were 10 packages of $100 bills, totaling $50,000, and
that most of the bills were fairly new and crisp. He is not certain
whether the money was wrapped at a Las Vegas bank or at the Silver
Slipper, but he was certain that the wrappers were initialed and
dated. 82
5. CHARLES G. REBOZO
Charles Rebozo testified that he had no official fundraising respon-
sibilities with regard to the 1972 Presidential campaign when he began
to discuss the Hughes contribution with Richard Danner in 1969, 83
but that nonetheless, Rebozo stated to the committee that the $100,000
contribution from Hughes was received on behalf of the 1972 Nixon
reelection campaign. 84
Rebozo’s first discussion of the two contributions with a govern-
mental agency took place May 10, 1973, when, according to an IRS
memorandum of the interview, he stated that:
* * * he received the money on two separate occasions —
each in the amount of $50,000. That he could not recall whether
he received the first package in Key Biscayne or California,
but that he had received one package in each location. The
California location was San Clemente. We attempted to zero
in on the dates that he received the money. To his best
recollection, it was late 1968 or early 1969 and that there were
2 or 3 months between each delivery.
Mr. Rebozo said he had been approached by Danner in the
fall of 1968 before the election about a political contribution
to Nixon. Rebozo had refused it because he did not think it
would be proper. After the election, he was approached
again by Danner about the contribution. Rebozo could not
remember whether he approached Danner or Danner ap-
proached him. As far as Rebozo is concerned, the money was
for President Nixon’s 1972 campaign. Mr. Rebozo was asked
if it could have been for senatorial or congressional cam-
paigns in 1970. Rebozo stated not as far as he was concerned.
What was in Danner’s or Maheu’s minds, Rebozo did not
know. 85
Rebozo testified before the Select Committee that, after the 1968
election, Danner occasionally visited Rebozo in Florida and brought
up the subject of a Hughes contribution to President Nixon. 86 During
these conversations, Rebozo testified, he asked Danner why Hughes
80 76 id.
81 Id. at p. 8.
82 Ibid.
m 21 Hearings 9974.
84 21 Hearings 9955. In addition to Rebozo’s receipt of $100,000. which he claims was for
the 1972 Nixon campaign, records indicate that Hughes contributed $150,000 to the 1972
Nixon campaign, $50,000 of which appeared on the pre-April 7, 1972, list of contributors
kept by Rose Mary Woods. The remainder was contributed after April 7, and duly
recorded.
85 Interview of Charles G. Rebozo by IRS, May 10, 1973.
80 21 Hearings 9952—53.
955
had hired Larry O’Brien and placed Hubert Humphrey’s son on the
payroll if Hughes were genuinely interested in supporting President
Nixon. 87
Rebozo testified that Danner approached him on four or five oc-
casions in 1969 to offer the contribution, 88 which, Danner later told
Rebozo, was the same money earmarked for the 1968 campaign. 89
Rebozo remembered one instance when Danner appeared at Key Bis-
cayne with $50,000, but Rebozo refused to accept it. 90 Rebozo had no
recollection of discussing with Danner using the contribution for poll-
ing purposes in the 1970 congressional elections. 91
First $ 50,000 contribution : Rebozo testified that, after a number of
conversations with Danner in 1969, Rebozo finally agreed to accept the
contribution. His rationale was that :
Danner then had been working for Hughes a couple of
years or so. I had come to know Maheu, whom I didn’t know
when he first offered the money. Morgan was seemingly out
of the picture, and I began to get a little confidence in the
fact that maybe this money could be utilized, and it wouldn’t
present any embarrassing problems. So it was somewhere
after he had been with them for some time they agreed to
take it. 92
After agreeing to accept the money, and shortly before the delivery,
Rebozo testified that he talked with Danner, who said he would come
to Miami to make the delivery. Rebozo responded that he was “going
to be in California next week, and that would save [Danner] a trip.” 93
Rebozo also recalled Danner saying at about the time of the first
delivery that there would be more than $50,000 contributed, but he
did not recall whether Danner mentioned a specific amount. 94
Although he initially told the IRS that he was not sure where the
first delivery was made, 95 Rebozo later testified that the first contribu-
tion took place July 3, 1970, at San Clemente, 96 a conclusion he reached
after checking hotel and airline records 97 and talking with Danner. 98
Rebozo testified that he and Danner met alone at San Clemente and
that during this meeting, Danner gave him a manila envelope con-
taining $50,000." Rebozo took the envelope and put it in his bag. 1
He has no recollection of what occurred next, but he and Danner may
have visited briefly with the President 2 or Rose Mary Woods. 3
Second $50,000 delivery: Rebozo testified that the second delivery
took place soon after the first, within “a matter of weeks * * * [it]
could have been 3 months * * * I really don’t know. I think I saw
87 21 Hearings 9955-57.
88 21 Hearings 9954. Danner testified that he offered the $50,000 only once prior to dis*
cussing the possibility of a contribution for the 1970 congressional campaigns. 24 Hearings
11542.
89 21 Hearings 9977.
90 21 Hearings 9954.
91 21 Hearings 995 3.
92 21 Hearings 9962.
98 Ibid .
94 Ibid.
95 Interview of Charles Rebozo by IRS, May 10, 1973.
98 21 Hearings 9963.
97 Ibid.
98 21 Hearings 9965.
99 21 Hearings 9965.
1 21 Hearings 9965.
2 21 Hearings 9966.
8 Ibid.
956
somewhere Danner had indicated it was in August and that would be
correct.” 4
Rebozo could not recall the discussion leading up to this delivery
and was “inclined to think that [Danner] just brought it down [to
Key Biscayne] ”. 5 Kebozo testified that he was not certain whether the
delivery in Key Biscayne took place at his home or at his bank. 6
Kebozo testified that he is uncertain about any conversation he had
with Danner, although Danner may have said “there was another 50.” 7
Kebozo testified that he did not open the envelope. 8
Kebozo testified that Maheu “was never there when Danner gave me
the money on either occasion.” 9
B. An Analysis of Possible Sources of the Contributions
1. PREELECTION 1968
As discussed elsewhere in this report, 10 there was, during the sum-
mer and fall of 1968, an unsuccessful attempt to arrange a $50,000
cash contribution from Hughes to then-candidate Nixon. Rebozo,
Danner, and Robert Maheu, key figures in the actual deliveries, were
also heavily involved in the 1968 attempt. The committee has no evi-
dence that there was $50,000 in cash put together for a contribution
before the election in 1968.
2. THE SANDS HOTEL CAGE — EARLY DECEMBER 1968
In early December 1968, two Hughes employees, Lawrence T. Ryh-
lick and John lanni, withdrew $50,000 in $100 notes from the casino
cage at the Sands Hotel in Las Vegas. 11 Ryhlick was then the controller
at the Sands, and lanni was the executive assistant to Gen. Edward
Nigro, a top Hughes aide (now deceased) at whose direction the cash
was withdrawn. lanni delivered the cash to Robert Maheu. 12 This
transaction was unknown to the Select Committee until recently,
and the evidence gathered on the withdrawal is consequently incom-
plete. However, the available evidence suggests that this is a likely
source of one of the deliveries.
During interviews with staff members 13 Robert Maheu did not
list this transaction when responding to general questions about politi-
cal contributions. His explanations of the Sands withdrawal given
to the Internal Revenue Service have not been consistent, ranging
from no recall to detailed recollection (see above) .
The details of this withdrawal are particularly important vis-a-vis
documentary evidence on the money Rebozo returned, as explained
below. The check for $50,000 which was cashed by Ryhlick is dated
4 21 Hearings 9984.
5 Ibid.
6 Ibid.
7 21 Hearings 9985.
8 IUd.
9 Ibid. IRS notes reflect that Rebozo told them that, while Maheu was not present at
either delivery, he may have been in Florida. See interview of Charles G. Rebozo by the IRS,
May 10, 1973.
10 See p. 933, supra.
11 Ryhlick telephone interview, May 21, 1974. lanni telephone interview, June 3, 1974.
12 Ryhlick telephone interview; lanni interview, note supra. Ryhlick says he was not
present at the delivery to Maheu, but that immediately after making the delivery, lanni
reported his success to Ryhlick and Nigro.
13 Robert Maheu interviews, Sept. 15, 1973, Jan. 20, 21, and 28, 1974.
957
December 4, 1968. 14 The request for the disbursement, signed by Gen-
eral Nigro and Ryhlick, is dated November 30, 1968. 15 Ryhlick pre-
pared another request for disbursement for his own recordkeeping
purpose (not a carbon or photostatic copy of the request). Ryhlick
remembered preparing his disbursement record a day or two after
receiving the check, 16 and his disbursement record is dated Decem-
ber 5, 1968. 17 He said he got the check on December 4. 18 In statements
to the IRS, Ianni and Ryhlick placed the date of the withdrawal as
December 5, 1968. 19 However, Ryhlick has recently indicated that
December 5 was only an approximate date of withdrawal. His best
recollection was that the check was cashed up to 4 days after Decem-
ber 4, on the date of one of General Nigro’s staff meetings. 20 The
exact date of that meeting has not yet been determined. The check
cleared the Bank of Las Vegas on Monday, December 9, so it was
cashed sometime between December 4 and December 9. Ryhlick is
sure that it was not cashed on a Saturday or Sunday (December 7
or 8). 21
The significance of these dates is as follows. In the money Rebozo
returned and identified as the first delivery, there are 50 consecutively
numbered $100 bills that arrived at the Bank of Las Vegas (now
the Valley Bank of Nevada) on December 5, 1968, as part of a large
money shipment from the Los Angeles Federal Reserve branch bank. 22
The bills were shipped to the office of the Bank of Las Vegas that
was used by the Sands and other Hughes casinos. 23 The money would
have been available for bank customers at 9 a.m. on Friday,
December 6. According to a Valley Bank official most of the $100
bills available for customers go out to the customers for weekend
use by the end of the day each Friday. 24 The Valley Bank does not
keep serial number records on bills it provides to commercial cus-
tomers, 25 but it is quite possible that the string of 50 bills could have
been picked up from the bank by the Sands on December 6. If the
December 4 check were not cashed until December 6, these 50 bills
could, therefore, have been in the $50,000 packet Maheu received from
Ianni.
If the 50 bills were in the packet that was delivered to Robert
Maheu, then their presence in the money Rebozo returned and identi-
fied as the first delivery would establish the Sands as the source for
that delivery to Rebozo. If the Sands withdrawal was the source,
the Federal Reserve evidence shows that not all the money returned
and identified as the first delivery could have been the same money
assembled at the Sands. There are 88 bills in the money returned
and identified as the first delivery that were not available for com-
mercial distribution until after the time of the Sands withdrawal.
14 26 J Hearings, exhibit 22.
15 26 Hearings, exhibit 23.
18 Ryhlick telephone interview. June 20, 1974.
17 A copy of the form is in the files of the IRS.
18 Ryhlick telephone interview, June 20, 1974.
19 Ibid.
20 Ibid.
21 Ibid.
22 See 20 Hearings, exhibit 24. The bills were delivered by the Federal Reserve to Brinks,
Inc., for shipment at 3 :50 p.m. on Dec. 4. 1968. According to R. H. Wynne, Sr., vice presi-
dent of the Valley Bank, the shipment would have arrived at the Las Vegas bank on the
afternoon of Thursday, December 5. Wynne interview, June 20, 1974.
23 Wynne interview, note 22 sunra.
24 Ibid.
25 Ibid.
958
This circumstantial possibility is particularly interesting in light of
the attempted delivery in Palm Springs of cash to the Nixon cam-
paign on December 6 and Danner’s visit to Las Yegas on Decem-
ber 5-8. 26
In addition, Maheu’s earliest recollection, according to a Septem-
ber 21, 1971, IRS memorandum of a meeting between IRS agents and
J ames Rogers, a tax lawyer for Robert Maheu, was that the Sands was
the source for a delivery to Rebozo. The IRS memorandum stated :
Mr. Rogers said Hughes ordered Maheu to take $50,000
from the cage at the Sands and turn it over to President
Nixon. He said that Maheu probably sent an employee to the
cage who returned and gave the money to Maheu. Mr. Rogers
said that Maheu was supposed to turn the money which was in
a sealed envelope over to an aide of President Nixon but he
missed his connections and gave the money to Richard Danner
instead, who later turned the money over to an aide of Presi-
dent Nixon’s. 27
This recollection of Maheu’s is important in several respects. First,
it is the earliest record available on the subject. Thus, it presumably
reflected a fresher recollection than, for example, Maheu’s lack of recall
about the transaction in an IRS interview some 2 years later. 28 Second,
Maheu’s recollection that he sent someone to the cage for the money
matches Ryhlick’s observation that Nigro’s order to withdraw the
money, following standard operating procedure, would have been
prompted by a Maheu to Nigro order. 29 Similarly, Maheu’s recollection
that he received the money comports with what Ryhlick and Ianni
have said. 30 Third, the reference in the memorandum to Maheu missing
connections in the planned delivery to a Nixon aide corresponds to the
unsuccessful Palm Springs delivery that occurred about the time of the
withdrawal from the Sands. Finally, Maheu’s recollection that he gave
the money to Richard Danner, who delivered it to “an aide of President
Nixon”, would, if correct, firmly establish this transaction as the
source of one of the deliveries to Rebozo. 31
3. NADINE HENLEY — DECEMBER 5, 1968
In addition to the $50,000 from the Sands, Robert Maheu received
two deliveries of $25,000 each in $100 notes on December 5 and 6, 1968,
from Nadine Henley, a Hughes aide who withdrew it on December 5
from Hughes’ personal account in a Hollywood branch of the Bank of
America. 32 Henley said that Maheu requested the $50,000 for a political
contribution to President-elect Nixon. 33 Mr. Nixon was in Palm
Springs on December 6, 1968.
A note written by Henley on December 5, 1968, says that, the money
she sent to Maheu on December 5 and 6 was for “State committees —
Nixon’s deficit.” 34
20 See 26 Hearings, exhibit 25.
27 Sept. 21, 1971, IRS memorandum of meeting with James Rogers.
28 Mar. 15, 1973, IRS memorandum of meeting with James Rogers.
20 Ryhlick telephone interview, May 21, 1974.
30 Note 11, supra.
31 See p. 956 for an analysis of the Sands as a possible source.
32 See Henley exhibit 4, 24 Hearings 11530.
33 Nadine Henley interview, Jan. 22, 1974.
34 Henley exhibit 4, 24 Hearings 11530.
959
Maheu has always acknowledged receiving the above cash, 35 but he
has given a number of differing statements of what he did with it.
In March 1973 he told the IRS that it was delivered to campaign aides
of Hubert Humphrey for use in the 1968 Presidential campaign. 36
By early December 1968, of course, the 1968 election had already
occurred. On January 20 and 21, 1974, Maheu told Select Committee
investigators that this $50,000 was taken to Palm Springs for the
unsuccessful delivery to President-elect Nixon and that it later became
the first successful delivery to Rebozo. 37 He questioned that statement
on January 21, however, and a few days later stated that, after return-
ing from Palm Springs with this cash obtained from Henley, he used it
to reimburse himself for a $50,000 campaign contribution he made
directly to Hubert Humphrey earlier in 1968. 38
In sum, the evidence reflects that Maheu did receive $100,000 on
December 5 and 6, 1968 (from the Sands and from Henley), the dis-
position of which has never been conclusively determined. Once re-
garding the Sands money 39 and once regarding the Henley money, 40
Maheu stated that the same money was later used for the first delivery
of $50,000 to Rebozo. Danner corroborated this possibility by testify-
ing that Malieu told him the first delivery contained the same money
that was undelivered in 1968, 41 and Rebozo testified that Danner told
him the first delivery was the same money they had discussed in 1968. 42
A telephone message taken by one of Maheu’s secretaries on Novem-
ber 22, 1968, show T ed a call from one Stephen Craig, with the Nixon
election campaign in New York City. The message reads : “re : contri-
bution — have deficit of $800,000.” 43 The Select Committee learned of
this note shortly before June 28 and therefore had no time to explore
its full significance. Taken at face value, however, it shows a post-elec-
tion interest of the Nixon campaign in soliciting funds from Hughes.
On December 17, 1968, Maheu received a form letter from President-
elect Nixon, thanking “* * * all of those who contributed so gener-
ously to our cause.” 44
In early December, Maheu received $100,000 in cash in 2 days,
traveled to Palm Springs and, Maheu has stated, tried unsuccessfully
to deliver the money to Richard Nixon or an aide of his. In addition.
Richard Danner was in Las Vegas from December 5-8, 1968, 45 talking
with Maheu and other Hughes aides about possibly joining the Hughes
Nevada operation. 46 Danner is not sure whether he was aware of
Maheu’s trip to Palm Springs at the time it occurred, 47 and he denied
receiving any money from Maheu or other Hughes agents at that time. 48
33 IRS interviews from 1971-73 ; Select Committee interviews Jan. 20-21. 1974; Los
Angeles testimony. Maheu signed receipts for the cash on Dec. 5 and 6, which were
labelled as receipts for nondeductible contributions. Henley exhibit 4, note 32 supra.
33 Mar. 15'. 1973, memorandum of meeting between IRS agents and James Rogers,
Maheu’s tax lawyer.
87 Robert Maheu interview, Jan. 20. 1974.
38 Robert Maheu interview, Jan. 28, 1974. That contention conflicts with Henley’s note of
Dee. 5, 1968, which indicates that part of the $150,000 in checks Maheu received on Sept. 9,
1968 was to cover the Humphrey contribution. Henley exhibit 4, note 32 supra. Humphrey
had denied personally receiving a cash contribution from Maheu.
89 Through his lawyer, to the IRS on Sept. 21, 1971.
40 Maheu interview, Jan. 20, 1974.
4 !.?° Hearings 9532. Danner’s recollection is not now clear. He stated that he cannot
testify with certainty that one of the $50,000 deliveries consisted of exactly the same money
as was available in 1968. 24 Hearings 11542.
42 21 Hearings 9977.
43 Notes from IRS files produced pursuant to S. Res. 288, see 26 Hearings , exhibit 12.
44 Ibul.
^26 Hearings, exhibit 25.
46 24 Hearings 11447.
47 24 Hearings 11448.
48 24 Hearings 11447-48.
35-687 O - 74 - 62
960
Further, Danner testified that this visit to Las Vegas, his only visit to
the Hughes operation in 1968, “had nothing to do with campaign,
campaign contributions, none whatsoever.” 49 However, on November
29, 1972, Danner told IRS Special Agent Donald Skelton that “he
thought he and Maheu began discussing the prospective contribution
shortly after the 1968 election, which preceded his employment with
Hughes Tool Co.” 50
4. NADINE HENLEY — JUNE 2 7-JULY 11, 196 9
On July 11, 1969, Robert Maheu acknowledged in writing the re-
ceipt of $50,000 cash from Howard Hughes “for nondeductible con-
tributions,” 51 the phrase used to cover money for political contribu-
tions. 52 Nadine Henley acknowledged sending the cash to Maheu at his
request. She did not, however, know why Maheu requested the money
and apparently did not make a note of the purpose of the transaction
as she had done on the December 5, 1968 withdrawal. 53
Maheu told the Select Committee investigators that this cash may
have been the source of the first contribution to Rebozo. 54
When first asked about the source of the first delivery, Maheu said
that the source was the December 5, 1968, money from Henley, 55 which
he said he gave to his son, Peter, immediately after his return from
Palm Springs on December 6 or 7.
In a later staff interview, Maheu stated that, based upon his son’s
recollection that he held the money he received from his father only a
short time, 56 the June-July 1969 money was the source of the delivery, 57
Maheu was not able to place the July 1969 date in relation to any other
events, as he had done for the December 1968 money he received from
Henley. He assumed it was the date only because he rejected the De-
cember 1968 date. There is no independent evidence corroborating the
date.
When questioned about the July 11 money by the IRS (in March
1973), Maheu, through his lawyer, professed complete ignorance of
the transaction. 58 Nevertheless, less than 1 year later he said it was
the source of a delivery to Rebozo. Further, when he told the Select
Committee investigators that the July 11 money was the source of the
first delivery after discounting the December 5 money from Henley,
the investigators were not yet aware of the Sands withdrawal, and
Maheu did not mention it. As the discussion on the Sands withdrawal
showed, it is a likely source for the first delivery. 59
5. SILVER SLIPPER CASINO OCTOBER 2 6, 1970
On October 26, 1970, Thomas Bell, a Hughes lawyer in Las Vegas,
withdrew $115,000 from the Silver Slipper Casino in Las Vegas. 60
40 24 Hearings 11448.
50 Notes from IRS interview. November 29, 1972.
51 Henley exhibit 6, 24 Hearings 11534.
“Robert Maheu interview, Jan. 29. 1974.
63 Nadine Henley interview, Jan. 22, 1974. The note is part of Henley Exhibit 4, 24
Hearings 11530.
54 Robert Maheu interview, Jan. 20, 1974.
55 Ibid.
56 Peter Maheu interview, Nov. 29, 1973.
e7 Robert Maheu interview, Jan. 28, 1974.
“IRS memorandum of interview with James Rogers, Maheu’s lawyer, Mar. 15. 1973.
59 See p. 956, supra.
00 See withdrawal slip at 26 Hearings , exhibit 26. Bell related his version of the with-
drawal in an interview on Dec. 17, 1973. A fuller explanation of Bell’s story is set forth at
p. 953.
961
According to Bell, he immediately gave $50,000 of that sum to Richard
Danner in Danner’s office with no one else present. Bell’s withdrawal
and delivery to Danner were made at Robert Maheu’s request, accord-
ing both to Bell 61 and Maheu. 82 This was the only time, Bell said, that
he was asked to deliver money to Danner. Bell assumed, but was not
told by Maheu or Danner, that the money was for a political contribu-
tion. Bell had no idea what Danner did with the money.
In his latest testimony, Danner denied ever receiving any money
from Bell, 63 although he earlier testified that it was possible that Bell
delivered money to him. 64 Danner and Maheu were in Key Biscayne
shortly after the $50,000 was allegedly given to Danner. 65
This money could be the source only of the second delivery ; all other
potential delivery dates w T ere before October 26, 1970.
6. A NOTE ON STORAGE OF THE MONEY BEFORE DELIVERY TO REBOZO
As the earlier section on the roles of key participants shows, 66 there
is some question about where the money for at least one of the deliv-
eries, most likely the first, was held and for how long, between the time
it was put together and the time it was delivered to Rebozo.
Before the Select Committee, Danner testified as follows:
My recollection is that one, perhaps the first one, had been
locked in a box in the Frontier cage. And it was obtained from
that source. Whether I got it or Mr. Maheu got it or one of
the secretaries got it, I don’t recall.
The second contribution, again, I don’t recall whether it
was Robert Maheu or his son, Peter Maheu, who delivered
it to me, either in their office or my office. But I am reasonably
certain that this is the way the two deliveries were made to
me. 67
In his November 29, 1972, telephone conversation with IRS Special
Agent Skelton, according to the IRS memorandum, Danner told
Skelton that the first delivery was in Key Biscayne in September
1969 88 and that the money that was delivered then had been kept in-
tact in the Frontier cage “for alt] least six months.” 69 which would
mean at least since March 1969. The spring of 1969 was about the same
time, according to Danner, that Rebozo was chiding him about Hughes’
failure to support President Nixon. 70 Danner was apparently person-
ally involved in storing the money. He told Skelton that he, Danner,
had personally supervised the transfer of the money while it was in
the cage from a manila envelope to a locked box. 71 The only sources
for money that was intact as early as March 1969 were: (a) the
Sands in early December 1968, or (b) Nadine Henley on December
5, 1968- Thus, Danner’s story to Skelton tends to support the view
01 Bell interview, Dec. 17, 1973.
63 Robert Maheu interview, Jan. 20, 1974.
63 24 Hearings 11466.
64 20 Hearings 9555.
65 See p. 978 infra.
60 See p. 948 supra.
07 24 Hearings 11467.
68 See IRS notes of Nov. 29. 1972, interview of Danner.
69 Ibid. Danner told the Select Committee that Maheu told him the undelivered money
from 1968 was in a safe deposit box at the Frontier and that he, Danner, was “fairly
certain’’ that it was the 1968 money. 20 Hearings 9532.
70 See p. 949 supra.
71 See IRS notes of Nov. 29, 1972 Danner interview.
962
that the money for the first delivery was the same money that had
been obtained in December 1968-
C- An Analysis of Possible Delivery Dates
1. DECEMBER 1968 THE BAHAMAS
On the disbursement form Lawrence Ryhlick prepared regarding
the withdrawal from the Sands in early December 1968, 72 Ryhlick
wrote (at some later date) the following notation :
The money was taken by John Ianni and given to Bob
Maheu. I was told he was to give this to President Nixon on
Maheu’s trip to the Bahamas. 73
The Select Committee has been unable to corroborate the accuracy
of the remark. According to Kyhlick, 74 he made the handwritten entry
regarding the Bahamas as one of his periodic attempts to make a record
of the purposes for cash withdrawals given to Maheu, should he later
be questioned by Hughes officials or anyone else regarding his role in
obtaining funds for Maheu. Kyhlick was not sure who told him the
money was intended for then President-elect Nixon, but he thought
it might have been Nigro himself or Jack Hooper, chief of security
for the Hughes operation. Nigro is dead, and Hooper has apparently
been seriously ill since at least the fall of 1973 and has been unavail-
able for questioning. 75
There is no evidence that Maheu was in the Bahamas after the Sands
withdrawal. Danner originally testified that he visited Rebozo and
President-elect Nixon on Robert Abplanalp’s Bahamian island, Grand
Cay, sometime between the 1968 election and the inauguration in
1969. 76 President-elect Nixon visited that island on November 18-19,
1968, and on December 26, 1968. 77 Danner’s diary does not show him
in the Bahamas or nearby at either time Mr. Nixon was there in late
1968. He was in Spanish Cay and Freeport in the Bahamas from De-
cember 10-15, 1968, 78 a visit that, Danner testified, had nothing to do
wfith political contributions or the delivery of money to President-elect
Nixon or Rebozo. 79 Danner’s latest testimony, based upon an examina-
tion of his 1968 diary, is that (1) he saw President Nixon in the Ba-
hamas only once in 1968 and (2) that visit was on April 10-12, 1968,
at Walkers Cay, part of Abplanalp’s property. 80 Further, Danner
testified that he did not receive any money from Hughes’ representa-
tives in December 1968. 81
Danner was in Las Vegas from December 5-8, 1968, 82 which was the
same time period as (1) the receipt by Maheu of $100,000 in cash, 83
72 See p. 956 supra.
73 Notes taken from the copy of the record in the possession of the IRS. The record itself
is in the possession of the Summa Corp. A written request from the Select Committee staff,
dated May 31, 1974, for a copy of it has gone unanswered.
74 Ryhlick interview, May 21, 1974.
75 His doctor has consistently attested to Hooper’s illness in written and oral communica-
tion with the Select Committee staff.
76 20 Hearings 9564. Danner testimony in Maheu v. Hughes Tool Co., No. 72-305-HP
(C.D. Cal.), May 3, 1974, pp. 7781-82.
77 New York Times, Nov. 19, 1968, p. 30 ; New York Times, Nov. 20. 1973, p. 15 ; New
York Times, Nov. 27, 1968, p. 18.
78 26 Hearings , exhibit 26-A.
79 24 Hearings 11431-32.
80 24 Hearings 11451.
81 24 Hearings 11447-48.
82 26 Hearings , exhibit 25.
83 See p. 958 supra.
963
(2) the unsuccessful delivery of $50,000 to President-elect Nixon or
an aide in Palm Springs, 84 and (3) the shipment to the Las Vegas
bank used by the Hughes-owned casinos of 50 consecutively numbered
$100 bills that were in the money Rebozo returned and identified as the
first delivery. 85 While no firm conclusions can be drawn, this evidence
and Ryhlick’s note establish an interesting set of coincidences.
2. APRIL 2-10, 196 9 KEY BISCAYNE
No one has testified to this date as a delivery date. This was Danner’s
first trip to Miami after he joined the Hughes organization 86 and, ac-
cording to Danner, it concerned business dealings in the Bahamas. 87
Maheu told the Select Committee investigators that the first delivery
was made in Key Biscayne not long after Danner joined the Hughes
operation, 88 but he was unable to pinpoint the date. There is no indi-
cation from available travel or hotel records that Maheu was with
Danner in Florida at this time.
In summary, this is a possible delivery date without substantial
support.
3. JUNE 2 6, 1969 KEY BISCAYNE
Like the April 2-10 date, there was no testimony supporting this
specific date. Danner had no specific recollection of this trip, 89 al-
though he testified that in the spring of 1969 Rebozo was “more or less
needling” him about Hughes’ financial support of Hubert Humphrey
and Hughes’ failure to contribute to President Nixon. 90 Danner testi-
fied that “around May, possibly early in June” 91 1969, after Rebozo
had once refused a $50,000 contribution, Danner and Rebozo began
discussing the possibility that Hughes would contribute funds for the
1970 congressional campaign. 92
4. SEPTEMBER 11-12, 196 9 KEY BISCAYNE
There, is evidence that makes this the most probable delivery date
for the first contribution. The factors suggesting this as a delivery
date include the following :
1. The Rebozo-Danner discussions about Hughes’ failure to con-
tribute had set the stage for a delivery.
2. According to Danner, Maheu, who w T as aware of the Dan-
ner-Rebozo conversations about contribution, authorized a deliv-
ery to Rebozo “sometime during the summer * * * maybe as
late as August [1969] .” 93
3. By this time, Maheu had obtained an additional $50,000 in
cash from Nadine Henley. 94
84 See p. 938 supra.
85 See p. 957 supra .
8a 26 Hearings. Exhibit No. 27.
87 20 Hearings 9518. The trip concerned business dealings regarding Cay Sal Island, as
reflected on his travel records.
88 Robert Maheu interview, Jan. 20, 1973.
89 20 Hearings 9526. Danner’s travel records show him in Key Biscayne on June 26, 1969.
26 Hearings, exhibit 28.
90 20 Jfearmgra 9512.
81 20 Hearings 9516.
02 IUd.
03 20 Hearings 9531.
94 See p. 960 supra.
964
4. When first questioned about the first delivery (by the IRS
on May 15, 1972) , Danner made statements that fit with a number
of facts about the September 11-12 trip.
He stated as follows :
Maheu showed me the envelope. I saw that it contained
packets of money, I did not count it. As I recall it, it was in his
office in the Frontier Hotel. We took the DeHavilland, flew to
Miami, went to Key Biscayne, met Rebozo at his house,
Maheu handed him the package and says here’s $50,000, first
installment. Rebozo thanked him, he told * * * Maheu told him
then that there would be more forthcoming later on, and that
wound up that transaction. We thereafter went to dinner, we
didn’t discuss the campaign contributions any further that I
recall, the next morning I left and flew back to Las Vegas. My
recollection is on that trip Maheu stayed, kept the plane down
there in Miami, he had some other business to look into. 95
While Danner’s recollection has changed, his early testimony is
worthy of particular scrutiny because, (a) it is his first recollection,
that is, closest in time to the event itself; (b) it was given free of con-
sultation with Rebozo; and (c) it comports substantially with Ma-
heu ’s recollection of the event.
(a) Maheu has stated that he was present at a Key Biscayne deliv-
ery. 06 Records of the Key Biscayne Hotel show that Danner and
Maheu were there on September 11-12, 1969. 07 Records of the Hughes
company plane show that it made a trip to Miami on September 11, re-
turning to Las Vegas on September 12. 98 Danner’s records, however,
show a $152 expense for travel on September 11-12, indicating the
possibility that he traveled by commercial airliner on part of his
trip to Miami and back. 00 If he traveled by commercial carrier from
Miami to Las Vegas on September 12, that fact would coincide with
his statement to the IRS that he returned to Las Vegas alone while
Maheu kept the Hughes plane.
On July 5, 1973, Danner signed an affidavit to correct his May 15,
1972, testimony to the IRS. In that affidavit he stated that the first con-
tribution was made in San Clemente on July 3, 1970. However, in
subsequent testimony in court 1 and before the Select Committee, 2
Danner testified that he is certain only that a delivery, not necessarily
the first, was made on Jidv 3, 1970. His testimony, therefore, still leaves
open the possibility, particularly when considered in light of the facts
outlined here, that the first delivery was September 11-12, 1969.
(b) In his initial IRS testimony quoted above, Danner testified
that the delivery was made at Rebozo’s house by Danner and Maheu
05 Danner testimony before IRS agents in Houston. Tex., on May 15, 1972, p. 18 (question
and answer 201).
96 Robert Maheu interview, Jan. 20, 1974.
97 26 Hearings, exhibit 29.
98 26 Hearings, exhibit 30.
99 26 Hearings, exhibit 31. The $152 is divided into two unidentified charges, one for $125.
one for $27. The cost of a one-way coach flight from Miami to Las Vegas in Sept. 1969 was
*136 nlns 5 percent tax. Telephone conversation with Jim Green at .the Civil Aeronautics
Board, June 28, 1974. The logs of the DeHavilland show two passengers (no names given)
on the Las Vegas to Miami flight and five on the return. There are no credit card records
available for Danner’s air travel as far back as Sept. 1969.
1 Testimony in Maheu v. Hughes Tool Co., note supra at 7791 :
Question. Now. directing your testimony to the first delivery which you say was at
San Clemente to Mr. Rebozo, was anyone else there?
Answer. Well. I hate to describe it as the first delivery, but the delivery.
2 24 Hearings 11465.
965
and that the three of them “thereafter went to dinner.” 3 Maheu’s
version of the Key Biscayne delivery at which he said he was present
conforms to Danner’s in two respects : Maheu told the Select Commit-
tee that the delivery was made in Rebozo’s house and that the
three men then went together to dinner. 4 Both Danner and Rebozo
testified before the Select Committee that the delivery was at Rebozo’s
bank office without Maheu present, 5 and Danner cannot remember
whether he and Rebozo dined together after delivery was made. 6
Finally, Danner once placed the time of the first delivery as
September 1969. On November 29, 1972, after he had first answered
questions before the IRS, Danner called IRS Special Agent Donald
Skelton in response to IRS requests that Danner review his records
regarding possible dates and places of delivery. Danner told Skelton,
according to the contemporaneous memorandum Skelton prepared, 7
that :
(a) As near as he, Danner, could tell the first delivery was made
in September 1969 ;
(b) The money for the delivery was locked in a secure box in
the Frontier Hotel cage for at least 6 months before the delivery ;
(c) At Danner’s instructions, the money was once transferred
within the cage from one box to another;
(d) He and Maheu made the first delivery in Key Biscayne;
and
(e) The second delivery was in San Clemente on July 3, 1970 ; 8
(f ) Maheu and Danner began talking about making a contribu-
tion to Rebozo shortly after the 1968 election, before Danner
joined Hughes.
These facts would tend to establish the dates of the deliveries. In
addition, it is worth noting that the information Danner provided on
November 29, 1972, comports with his earlier testimony to the IRS
and with the evidence summarized in this section, 9 although he testi-
fied to the Select Committee that he was “* * * reasonably certain
that no delivery of money was made on that date.” 10 Taken all together,
however, the evidence described above indicates that September 11-12,
1969, was the date of the first delivery.
5. FEBRUARY 3-5, 1970 KEY BISCAYNE
On February 3-5, 1970, Danner was in Key Biscayne, registered at
the Key Biscayne Hotel. 11 12 According to Danner’s expense records, he
had “ [<•] ontact with Rebozo re: TWA suit, Air West matters” 13 on
3 See p. 951 supra.
4 Robert Maheu interview. Jan. 21. 1974.
5 See p. 949 supra for Danner and Rebozo testimony.
6 24 Hearings 11466.
7 Notes from IRS turned over to the Select Committee pursuant to S. Res. 288.
8 In his May 1972 testimony before the IRS, Danner had placed the second delivery in
San Clemente “[s]ome time later,” question and answer 102, than the Key Biscayne
delivery. He was not then more specific on the date.
9 Danner is not clear on when he and Rebozo first discussed Danner’s IRS testimony of
May 1972, but he thinks it was before the November 1972 election (24 Hearings 11477).
Hence before the call to Skelton on November 29. When he and Rebozo discussed the
deliveries. Rebozo insisted that Maheu was not present at either one (24 Hearings 11465).
If Rebozo and Danner did in fact talk about the deliveries before the election, Danner was
nonetheless reiterating his May 1972 story when he called Skelton in late November.
10 24 Hearings 11465.
11 26 Hearings , exhibit 32.
12 26 Hearings , exhibit 33.
966
this trip ; according to his testimony, the TWA v. Hughes case and the
acquisition of Air West were subjects of discussions with Itebozo at
that time. 11
Although the hotel records subpenaed by the Select Committee do
not show Maheu in Key Biscayne on February 3-5, Danner testified
that Maheu was with him on the trip, 15 which included a visit to
Nassau by Danner, Rebozo, and perhaps Maheu. Robert Wearley, a
pilot of Hughes’ private plane, the DeHavilland, testified that Maheu
might have been on the flight with Danner from Las Vegas to Miami, 16
and that Maheu was definitely on the plane when it left Miami and
returned to Las Vegas via Washington, D.C. 17 Maheu told the Select
Committee that he was on the flight to Miami with Dan-
ner and that he and Danner met with Rebozo on February 3-5, 1970. 18
In addition, Maheu told the investigators that he testified before
a Las Vegas Federal grand jury investigating Hughes’ acquisition of
Air West that the second delivery to Rebozo was made in a meeting
among Maheu, Danner, and Rebozo on February 3-5, 1970. 19 Maheu,
however, could not explain the basis of that testimony.
Rebozo may have been in Las Vegas shortly before the flight to
Miami and may have flown with Danner and Maheu from Las Vegas to
Miami. 20 When confronted with that possibility, Maheu stated that
it was unlikely that he and Danner would have gone with Rebozo to
Florida to make a delivery if Rebozo were already in Las Vegas. 21
Aside from Maheu’s testimony before a grand jury, the evidence that
February 3-5, 1970, was a delivery date (assuming only two deliveries)
is not as strong as the evidence on other dates, such as September 11-12,
1969.
6. MARCH 2 0-22, 1970- — KEY BISCAYNE
Danner and Maheu were in Key Biscayne on the above dates, 22
immediately after Danner received approval from Attorney General
John Mitchell for Hughes’ proposal to buy the Dunes Hotel. 23 All
parties have denied that a delivery was made on this date. Maheu
stated that he made a trip to Key Biscayne to see Rebozo some time
during March 1970 and that the purpose was to discuss AEG testing,
not to deliver money to Rebozo. 24 Rebozo, of course, placed the first
delivery on July 3, some 4 months later.
Danner supported Maheu’s recollection that the discussions with
Rebozo were about AEC testing and that no contribution was made
on that date. 25 In sum, there is no firm evidence that this was the
14 20 Hearings 9567.
15 Ibid.
16 20 Hearings 9458.
17 20 Hearings 9447.
18 Robert Maheu interview. Jan. 21, 1974
19 jftid.
20 Maheu did not remember ever flying to Florida with Rebozo, but Robert Wearley, the
DeHavilland pilot, testified that “I believe he [Rebozo] departed Las Vegas with us” on
the early February trip to Florida. 20 Hearings 9448.
21 Robert Maheu interview, Jan. 21, 1974.
22 26 Hearings, exhibits 34. 35. ' • , „ ,
23 See p. 980. John Mitchell was also in Key Biscayne during this period. Mitchell logs,
26 Hearings, exhibit 36, but there is no evidence that he met with Danner, Maheu, or
Rebozo.
24 Robert Maheu interview, Jan. 20, 1974.
25 20 Hearings 9581, 9587.
967
date of a delivery, although all participants would have a substantial
interest in not admitting to a delivery date so close to the Dunes
decision by John Mitchell.
7. JULY 3, 1970 SAN CLEMENTE
This is the only date upon which Danner and Rebozo agree that one
of the contributions was made. When questioned initially by the IRS,
Rebozo said that one delivery was at San Clemente and one at Key
Biscayne, but that he could not remember which came first. 26 In later
testimony before the Select Committee, Rebozo stated that the first de-
livery was at San Clemente on July 3, 1970. 27 Danner also placed the
first delivery on this date in his IRS affidavit of July 5, 1973, 28 which
changed his May 1972 IRS testimony that San Clemente was the sec-
ond delivery. In later testimony, however, he testified only that, a deliv-
ery, not necessarily the first, was in San Clemente. 29 Robert Maheu told
the Select Committee that, his understanding was that, both deliveries
were made in Key Biscayne. 30
Both Danner and Rebozo testified in detail about, the July 3 deliv-
ery, 31 which included, according to Danner, a visit with President
Nixon immediately after the delivery.
8. AUGUST 19-2 0, 19 70 KEY BISCAYNE
This is also a likely delivery date. Based at least partly upon his
travel records, 32 which show him in Key Biscayne August 19-20, 1970,
Danner testified before the Select Committee that a delivery could have
been made at this time. 33 In addition, in his July 5, 1973, affidavit for
the IRS, he stated that he was “certain” that the second delivery was on
August 19-20, 1970. 34 Danner originally thought the Key Biscayne
delivery was in August 1969, but his travel records show no trip to Key
Biscayne in that period. Danner remembered a “* * * time lapse,
the extent of which I’m unable to define more accurately,” 35 between
the first delivery and the second delivery. If the first delivery were on
July 3, the second delivery would have been either August, 19-20 or
October 28-30 — a date discussed below. Danner discounted the October
date as too close to the 1970 election for the money to have been used for
congressional campaigns, 36 and Maheu questioned the October date for
the same reason. 37
Rebozo testified that the second delivery was in Key Biscayne, fol-
lowing the July 3, 1970, delivery within a “matter of weeks * * * [it]
could have been 3 months * * * I don’t know. I think I saw some-
where where Danner had indicated it was in August and that would be
correct.” 38 August, 19 or 20 was within “a matter of weeks” of July 3,
M May 10. 1973. IRS Interview.
27 21 Hearings 9063.
28 Danner also expressed his confusion regarding" this in December 1973. 20 Hearings
9531.
29 See notes 3 and 4, supra, Danner’s only trip to San Clemente, his travel records show,
was on July 3, 1970. 26 Hearings, exhibit 21.
30 Robert Maheu interviews, Jan. 20, 1974,
81 See p. 949 supra.
32 26 Hearings, exhibit 37.
33 20 Hearings 9555.
34 IRS notes.
35 24 Hearings 11539.
06 20 Hearings 9556.
37 Robert Maheu interview, Jan. 21, 1974.
88 21 Hearings 9984.
968
1970, while October 28 to 30 is almost 4 months after July 3, Rebozo’s
recollection of “a matter of weeks” between deliveries, plus his in-
clination to accept the August date lend credence to August 19 or 20,
1970, as a delivery date.
Danner’s present recollection is that he made the trip to Key Bis-
cayne alone, that Maheu was neither present at the delivery nor in
the Key Biscayne area when it was made. 39 There is no indication
that Maheu was in Key Biscayne on August 19 or 20, in contrast to Sep-
tember 11 to 12, 1969; February 3 to 5, 1970; March 20 to 22, 1970;
and — see below — October 28 to 30, 1970. If Danner is correct about
Maheu not being on the trip to Key Biscayne at which a delivery to
Rebozo was made, then August 19 to 20 would be the date for a
delivery.
9. OCTOBER 28-3 0, 1970 KEY BISCAYNE
There is substantial conflict in the testimony with regard to these
possible dates. Robert Maheu has stated that he instructed Thomas
Bell sometime in 1970 40 to withdraw $50,000 from the Silver Slipper
Casino in Las Vegas and deliver it to Danner. Bell, as noted earlier,
told Select Committee investigators that, at Robert Maheu’s direction,
he withdrew $115,000 from the Silver Slipper Casino in Las Vegas on
October 26, 1970, and delivered $50,000 of that sum to Danner on the
same day. 41 Danner’s expense records show him in Key Biscayne for
“conference with Rebozo” 42 as part of a trip to Washington, D.C., and
Miami on October 26 to 30, 1970, and hotel records show Danner and
Maheu in Key Biscayne on October 28 to 29, 1970. 43 President Nixon
was also in Key Biscayne on October 27 to 28.** There is no evidence
that he met with Danner or Maheu or was aware of a contribution made
in Key Biscayne. Danner could not recall whether the President was
in Key Biscayne when the delivery there was made. 45
The strongest evidence supporting this late 1970 date is Thomas
Bell’s statement, based upon the withdrawal slip from the Silver Slip-
per, that he gave $50,000 to Danner on October 26. On the other hand,
Danner’s testimony that he did not receive money from Bell, 46 plus
the statements of Danner 47 and Robert Maheu 48 that a delivery was
probably not made so close to the 1970 congressional elections, cast
doubt upon this date.
D. Storage of the Money by Rebozo
Richard Danner testified that he delivered the cash to Bebe Rebozo
in manila envelopes and that the cash was Wrapped with bank
wrappers from the Valley Bank of Nevada. 49 Rebozo testified that
30 24 Hearings 11465.
40 Maheu has given different times for the instruction. See p. 951, supra.
41 See p. 953, supra.
42 26 Hearings, exhibit 38.
43 26 Hearings, exhibit 39. Further records of the DeHavilland show a Las Vegas-Wash-
ington-Miami-Las Vegas trip on Oct. 27 to 29, 1970. 26 Hearings , exhibit 40.
44 Information provided by Congressional Research Service, Library of Congress,
45 24 Hearings 11467.
40 24 Hearings 11466. He earlier testified that he could have received money from
Bell. 20 Hearings 9555.
47 20 Hearings 9556.
^Robert Maheu interview, Jan. 21, 1974.
40 24 Hearings 11466.
969
he received the first $50,000 in a “letter-sized thick manila envelope,” 50
which he then took without opening it and marked “H. H.” in the
corner. In addition, Rebozo recalled that he wrote instructions on the
envelope addressed to Thomas H. Wakefield, general counsel, telling
him that if anything should happen to Rebozo, Wakefield should turn
the funds over to the finance chairman of the 1972 campaign. 51 Rebozo
then took the envelope and put it in safe deposit box No. 224 in the
Key Biscayne Bank and Trust Go.
Records from the Key Biscayne Bank and Trust indicate that safe
deposit box No. 224 was rented on July 9, 1968, by C. G. Rebozo with
Thomas H. Wakefield as the “Lessee-deputy.” 52 Rebozo testified that
he subsequently prepared a letter of instructions to Thomas Wakefield
concerning what to do with the money in box No. 224, which Rebozo
placed in the director’s safe deposit box at the Key Biscayne Bank. 53
Rebozo testified that he prepared the letter that was in the director’s
box a few weeks or possibly a month after he had placed the first
envelope in safe deposit box 224. 54
Thomas H. Wakefield declined to testify as to whether Rebozo gave
him any instructions regarding the safe deposit box because he claimed
the information was privileged under the attorney-client relationship
with Rebozo. 55 However^ Wakefield stated in an interview on October
18, 1973, that sometime in 1968 or 1969 Rebozo gave him a key to the
box and explained that in case of Rebozo’s death, Wakefield should
open the box and follow the instructions. 56
Rebozo testified that the second contribution was also in a manila
envelope that he placed in the safe deposit box 224, and that he placed
rubber bands around the two envelopes. 57
Rebozo testified that he told Rose Mary Woods about the first
Hughes contribution either at the time of delivery at San Clemente
or immediately thereafter. 58 Rebozo also testified that he probably
informed Woods of the second contribution at the White House. 59
Rebozo added that he may have spoken to Woods about the Hughes
contributions “three or four times.” 60
In a letter dated October 18, 1973, to special agent John Bartlett,
of the IRS, Woods recalled :
Mr. Rebozo told me that he had put this campaign contri-
bution in a safety deposit box and further that he had given
his attorney instructions in the event of his death that he
should open the box and follow the instructions therein. It
was my understanding that those instructions were to deliver
the contents to the Campaign Chairman or Finance Chair-
man of the next campaign. 61
50 21 Hearings 9957.
51 21 Hearings 9967.
52 21 Hearings 10157.
53 21 Hearings 9967.
64 21 Hearings 9968.
55 24 Hearings 11286.
50 Wakefield interview, Oct. 18, 1973.
67 21 Hearings 9985.
68 21 Hearings 9978.
59 21 Hearings 10002.
60 21 Hearings 1 0003.
01 22 Hearings 10283.
970
In addition, Woods gave testimony concerning Rebozo’s conversa-
tion with her about the contribution as follows :
Mr. Lenzner. And do you know how soon after he received
the money he told you he received it ?
Miss Woods. No sir.
Mr. Lenzner. In other words
Miss Woods. I’m sorry, I do not.
Mr. Lenzner. I’m sorry, finish your answer, go ahead.
Miss Woods. I do not recall because I don’t recall when he
told me, I don’t recall when he got the money, so I do not
know how soon after." 2
Woods also testified that when Rebozo advised her of the contribu-
tion, he did not specify the campaign for which the contribution was
designated. 1 ®
Rebozo testified that at some point after he received the contribu-
tions, he thought he should take a look at the money itself. He testified
that the money had “Las Vegas wrappers” on it, which he removed
and replaced with rubber bands 64 because of “the stigma that is ap-
plied to anything from Las Vegas.” 65
Herbert Kalmbach testified that he met Bebe Rebozo on January
8, 1974, and that Rebozo told him words to the effect that :
Undoubtedly, Herb, I have not told you that after you and
I talked last spring regarding the Hughes money [April 30,
1973] I found that I had not in fact disbursed any of the
Hughes cash to the several people I named. When I went into
the safe deposit box, I found that the wrappers around that
cash had not been disturbed, and so it was dear that no part
of this money had been used during the several years it was in
my box. 66 [Emphasis added.]
Since Rebozo’s discussion with Kalmbach was on April 30, 1973, then
either his statement that he removed the bank wrappers and placed
rubber bands around the money is not true or his statement to Kalm-
bach was not true.
In this regard, it is significant to note the comments of Kenneth
Whitaker, the FBI agent who was present on June 18, 1973 — at Re-
bozo’s request — when Rebozo opened the safe deposit box and had a
list of serial numbers made. 67 According to Whitaker, there were 10-
12 packets of money in 2 envelopes. Some of the packets were held
together by rubber bands, as Rebozo has testified, but, Whitaker said,
some of the packages were still in bank wrappers.® Thus, according
to Whitaker, at least some of the money in Rebozo’s possession was
still wrapped in bank wrappers shortly before its return.
Rebozo testified that he again entered the safe deposit box to destroy
the original envelopes in which the money was contained after “the
signals changed.”® 9 Rebozo said that the signals changed when he
62 22 Hearings 10201.
63 Ibid.
64 21 Hearings 9982.
65 21 Hearings 9983.
M 21 Hearings 10191.
67 Whitaker interview, Nov. 20, 1973. Whitaker’s role in the return of the money is
discussed at p. 1015, infra .
68 Whitaker interview, Nov. 20, 1973.
09 21 Hearings 9968.
971
decided not to contribute the cash to the campaign sometime after the
Hughes-Maheu split in 1970 and before the campaign. Although
Rebozo has testified that the money was for the 1972 Nixon campaign,
FBI agent Whitaker told his FBI superiors that, on June 18, 1973,
Rebozo told him that the contribution had been for 1970 congressional
campaigns. 70 Danner testified it was for 1970. 71 The Hughes-Maheu
split was not until December 1970, 1 month after the 1970 congres-
sional election. Therefore, if the money were for that election, the
Hughes-Maheu split offers no reason for Rebozo not contributing
the cash to appropriate campaign committees in 1970.
Rebozo recalled that after the signals changed he took the safe
deposit box into his office, and placed the packets of money in large
“brown envelopes” that replaced the envelopes with instructions on
them. Rebozo thought this occasion — when he destroyed the envelopes
with the instructions to Wakefield on them — was probably in 1972. 72
Rebozo testified that the sole purpose for changing envelopes was “to
eliminate the instructions.” 73 on the original envelopes. He could not
recall if he placed any markings on the envelopes to keep the two con-
tributions separate. 74
The occasions when Rebozo entered his safe deposit box are difficult
to determine from his records, since his visitation record card from
safe deposit box 224 shows five visits between December 26, 1969, and
June 5, 1970, but no visits between June 5, 1970, and June 18, 1973,
when the money was removed from the safe deposit box to be counted. 78
Rebozo testified that there was no record of his entry into the safe
deposit box because he got the key himself without signing the access
card required for other customers. 77 At some time Rebozo destroyed
the original envelopes containing the instructions to Wakefield. He
destroyed the letter to Wakefield in the directors’ box at some later
time. 78
Rebozo testified that he once lost all of his keys to his safe deposit
boxes. 79 In July 1973, Rebozo informed the IRS that he had lost his
keys approximately a year before he talked to them. 80 Rebozo testi-
fied that his bank uses interchangeable locks on the boxes, so he
switched locks for the boxes with the lost keys. 81
Rebozo testified that he then requested Wakefield’s key so that he
could get into the safe deposit box. 82 After the lock was changed, Re-
bozo testified that he then gave Wakefield another key that was a re-
placement. 83
Wakefield testified that after he first received a safe deposit key
from Rebozo, he placed it in an envelope in his safe, where it remained
until June 18, 1973. 84
According to Wakefield, (1) he received the key sometime in 1968
or 1969, (2) Rebozo never asked him for the key', (3) Rebozo never
™ See letter from FBI Director Kelley to IRS Commissioner Alexander In flies of IRS.
71 See D. 949 supra .
72 21 Hearings 9972.
73 21 Hearings 9990.
74 21 Hearings 9990-91.
70 21 Hearings 10157.
77 21 Hearings 10014.
78 21 Hearings 9991.
79 21 Hearings 10012.
? ^ e ^ 0z0 * July 10, 1973 ; notes therefrom in committee files.
81 21 Hearings 10012-13.
82 21 Hearings 10013.
83 21 Hearings 10013.
84 24 Hearings 11289.
972
gave him another safe deposit key, and (4) Rebozo never told him
he had changed the lock on box 224. 85
Rebozo could recall nothing else that was done to the money or to
safe-deposit box 224 until he returned the money in 1973.
E. The Federal Reserve Evidence Compared to the Sources and
the Deliveries 86
1. THE MECHANICS OF TRACING THE $100,100
Federal Reserve Record Keeping . — Each $100 Federal Reserve note
(hereafter note) has a series number (1928, 1950, and so forth) and
a serial number, which together make the note unique. Serial numbers
are often repeated in different series, however. The money Chester
Davis produced for the Select Committee on December 4, 1973,
contained notes from several series, beginning in 1928. Federal Re-
serve records on the earlier series are almost nonexistent, but the Fed-
eral Reserve assured the Select Committee that, notes from those
series would have been in circulation well before the relevant 1968-70
time period. Consequently subpenas were issued only for notes in two
later series represented in the $100,100 — the 1963A series and the 1969
series. 87
Federal Reserve notes go through several steps before reaching com-
mercial customers, as shown on Chart A below.
CHART A
DISTRIBUTION OF FEDERAL RESERVE NOTES
Step 1
Step 2
Step 3
(a) Printed in Washington by Bureau of
Engraving and Printing; (b)sent to
agent's representatives at Federal
Reserve banks around the country.
Transferred by the agent's representa-
tives to the Federal Reserve banks
(cash departments) upon demand by
the cash departments.
Shipped from the Federal Reserve
banks (cash departments) to com-
mercial banks upon demand by the
commercial banks.
For notes on which the Select Committee subpenaed information —
except nontraceable “star” notes — the Federal Reserve supplied the
dates of step (1) and step (2) in the distribution process from detailed
records maintained by the Federal Reserve agents’ representatives.
The recordkeeping for step (3) was inadequate, however, despite
a Federal Reserve regulation 88 that requires the maintenance of com-
plete records. At the time packages of new $100 notes are shipped from
a Federal Reserve bank to a commercial bank, personnel in the Cash
Department of the Federal Reserve Bank are required to record the
beginning and ending serial numbers marked on each package of notes.
However, Cash Department records often fail to show serial numbers.
Therefore, not every 1963A or 1969 note can be traced to a particular
nur.
80 The White House has apparently had at least a general knowledge of the Select
Committee’s work with the Federal Reserve System, By letter of .Tune 6, 19741, a lawyer
In Kenneth Gemmill’s law firm informed the Select Committee that twice In 1974 Gen.
Alexander Haig told Gemmill that “there might he a problem” with the bills. See letter
of Matthew J. Broderick to Terry F. Lenzner, June 6, 1974. in committee files.
87 Some of the notes in the money Rebozo returned are “star” notes, which are printed
and numbered separately and used as replacements for regular notes that are damaged
during printing. It is impossible to trace “star” notes.
88 Regulation 2060.10, Federal Reserve Loose Leaf Service.
973
commercial bank on a particular date. The poor recordkeeping was
most unfortunate in the San Francisco Federal Reserve Bank and its
branch offices, especially Los Angeles. Approximately 60 percent or
the notes returned and identified as the first delivery and 50 percent
of the notes returned and identified as the second delivery passed
through San Francisco or one of its branches, but, because of failure
to record serial numbers, less than half of those notes were traced to
commercial Ranks.
In the materials that follow, those notes that have as their latest
distribution date the date of step (2) above are notes for which no
date of commercial shipment is available.
The Search for Records . — Records showing steps (1) and (2) m
chart A are kept in numerical order by series, thus making possible
almost instant retrieval of information on a given note. Records of
commercial shipment, step (3) in chart A, are filed by date only, not
by denomination, series, or serial number. In addition, notes of a par-
ticular denomination and series are not so regularly distributed in
numerical order as in steps (1) and (2). Consequently, Federal Re-
serve personnel who searched for commercial shipment information on
a particular note had to look at every commercial shipment form
from the date of step (2) until the serial number was found or, if
none were found, up to the present.
When a form recording the correct serial number was found, the
search was not necessarily over, for in most Federal Reserve banks
the shipment forms show only sei'ial numbers, not series numbers.
If the lapse of time between step (2) and step (3) was groat: — for ex-
ample, over 1 year — the strong possibility existed that the serial
number on the commercial shipment form was for a note from a dif-
ferent series. An example from one of the notes Rebozo returned and
identified as the first delivery follows :
Series 1963-A; serial No. L02 935 922 A; (step 2) date re-
leased to Federal Reserve Bank, March 24, 1969; (step 3)
commercial shipment date April 19, 1971.
The above information was submitted to the Select Committee by
the Los Angeles branch of the San Francisco Federal Reserve Bank.
If true, it would contradict Rebozo’s testimony that he returned the
same money he received. No one has ever claimed that a delivery was
made as late as 1971, so this note would have been inserted in one of
the packets of money after Rebozo received it. The 2-year lapse be-
tween steps (2) and (3) seemed inordinately long to the Select Com-
mittee staff, 89 so the Federal Reserve w 7 as asked to check its records for
the same serial number in the 1969 series. The officials in Los Angeles
quickly discovered that a $100 note in the 1969 series with a serial num-
ber identical to the 1963A note was released to the Los Angeles branch
(step 2) on March 15, 1971, about 1 month before the commercial
shipment date of April 19. No definite statement can be made about
which of the notes was recorded on the April 19 form, but the likeli-
hood, according to Federal Reserve officials, is that the commercial
shipment form is for the 1969 note, which was released to the Federal
89 By letter of Feb. 1, 1974. A. S. Carella, Vice President of the San Francisco Federal
Reserve Bank, formally confirmed that suspicion by estimating that the average time
between steps (2) and (3) is 2 to 3 months.
974
Reserve Bank much closer to April 19 than was the 1963A note in
which the Select Committee was interested.
The San Francisco Reserve Bank and its Los Angeles
branch provided incorrect information to the Select Committee of the,
kind described above on some 17 notes. In each case, if the date origi-
nally given as the commercial shipment date for the note subpenaed
had been correct, then Rebozo’s testimony that he returned the same
money he received would have been clearly contradicted. The double-
checking of the dates, as described above, was done by the Federal
Reserve at the Select Committee’s request. It should have been done
by the Federal Reserve as a matter of course.
2. SOME GENERAL FACTS ABOUT THE MONEY REBOZO RETURNED
(a) The 1,001 Federal Reserve notes were distributed among the
country’s 12 Federal Reserve banks after they were printed by the
Bureau of Engraving and Printing. About 60 percent of the notes in
the first delivery and 50 percent in the second delivery went to San
Francisco or one of its branch banks, primarily the Los Angeles
branch.
(b) There! are very few records of commercial shipment available
from Federal Reserve banks other than San Francisco.
(c) Because the San Francisco bank and its branches have more
records of com m ercial shipment available, and because so many of the
notes passed through those banks — especially Los Angeles — their rec-
ords of commercial distribution have been analyzed in detail. The lop-
sided preponderance of notes that went to Las Vegas commercial
banks in both packets of money Rebozo returned suggests that a siz-
able portion of the returned money was put together in Las Vegas.
Most of the Las Vegas notes went to the bank that was, during 1968-
70, used by the Huges-owned hotels for supplying their casinos with
cash.
(d) The money identified and returned as the first delivery contains
notes ranging from the 1934 series through the 1963A series. No com-
mercial shipment information is available on any notes before the
1963A series. Most of the pre-1963A notes were released to Federal
Reserve banks in the mid-1960’s; a few as late as the end of 1967. The
1963A notes on which records were found were available for com-
mercial distribution from late 1967 through June 12, 1969. The latest
date of commercial distribution is June 12, 1969, when three $100
notes identified and returned as part of the first delivery were released
to the Cash Department of the Los Angeles Federal Reserve Bank by
the agent’s representative. No record of commercial shipment was
found for this note.
(e) The money returned as the second delivery contains notes rang-
ing from the 1928 series through the 1969 series. About three-quarters
are from the 1963A and 1969 series. Notes from those series on which
records were found went into commercial distribution from early 1967
through October 1, 1970. The latest date of commercial distribution
is October 1, 1970, when a $100 note identified as part of the first
delivery was released from the Federal Reserve Bank of Chicago to the
Lakeview Trust and Savings Bank, Chicago. The next note closest
to October 1, is September 23, 1970, when a $100 note was shipped
975
from the Los Angeles Federal Reserve branch office to the Nevada
National Bank, 4th and Bridger, Las Vegas. There are some 33 addi-
tional notes that were not available for commercial distribution until
late August or early September 1970. Therefore, there were 35 notes
not available for commercial distribution until after August 19-20,
1970.
(f ) The money Chester Davis made available to the Select Commit-
tee on December 4, 1973, was the money returned to Hughes in June
1973. According to Danner, 90 each delivery to Rebozo consisted of 10
packages of $5,000 each, the standard size of $100 bill packages. The
money Chester Davis produced was divided into 5 packages per de-
livery, not 10. The 5 packages described as the second delivery con-
tained 100 notes each. The first delivery packages, however, were un-
even, ranging from 50 notes in one package to 150 in another. The
extra note, in the 1,001 notes was in one of the first delivery packages.
How it got there has never been explained.
3. THE “matching” NUMBERS
Comparing the serial numbers of the bills in the first delivery with
those of the bills in the second delivery produced two examples of a
phenomenon that substantially contradicts Rebozo’s story that he kept
the two deliveries separated in the safe deposit box and did not dis-
turb either of them until the withdrawal in 1973.
Tn the two examples charted below, the bills traveled through the
Federal Reserve together and, as indicated on the chart, were shipped
to the same commercial bank in the same package of money on the
same day. That, is, the dates and places described in steps (1), (2),
and (3) in the distribution system described earlier 91 “matched” one
another. However, the matching bills appear in different packages
of the money Rebozo returned, one in the package identified as the
first delivery and one in the second delivery. The two deliveries were
apparently packaged on separate dates from 8 months to almost 2
years apart, as the preceding discussions noted. 92 They were either put
together from different sources in Las Vegas — the Sands and the
Silver Slipper — or, according to Mahen, in different cities — one de-
livery in Las Vegas, one in Los Angeles. According to a professional
economist who analyzed their circumstances, the likelihood that the
matching bills would end up coincidentally in separate deliveries that
were kept segregated is “highly remote, verging on zero.” 93
The evidence on the matching numbers is summarized in exhibit A
below. Backup documents supporting these dates are in the Select
Committee’s possession.
There are several other pairs of what could be “matching” notes
on which the Federal Reserve evidence is incomplete, that is, there
are no records of commercial shipment for the notes. Each of the in-
complete sets went through steps (1) and (2) in the distribution
90 See e.g., Ms May 3, 1974, testimony in the Maheu v. Hughes Tool Co. case, pp. 7791-93.
91 See p. 972 supra.
92 See p. 974 supra.
93 See letter to the Select Committee from Dr. John Tucillo, Economics Department,
Georgetown University, dated June 28, 1974, 26 Hearings, exhibit 41. This conclusion,
however, must be viewed in light of a number of caveats which are set forth in the above
letter.
976
system on the same dates. However, without the records for step (3)
no conclusions can be drawn about whether the notes “matched” com-
pletely, as in the two examples discussed above.
EXHIBIT A— “MATCHING” NUMBERS
Delivery— as Date of
identified by Serial commercial
Rebozo Series number shipment From— To—
I. First 1963A L02285857A \ Dec. 4, 1968 Los Angeles Federal Nevada National Bank,
Second 1963A L02287969A I Reserve. 4th and Bridger, Las Vegas.
II. First 1963A L03248254A i May 21,1969 do Sunrise branch, Bank of Las
Second 1963A L03248821A ( Vegas, Las Vegas.
4. THE FACTS COMPARED WITH POSSIBLE SOURCES OF THE DELIVERIES
The Select Committee has received evidence and testimony pointing
to four possible sources of funds for the deliveries. If either of the
first two sources — both in early December 1968 — was a source for a
delivery, evidence produced by the Federal Reserve shows that the
money returned by Rebozo was not kept intact from December 1968
until its return in 1973. The third source (Nadine Henley, mid-1969)
is doubtful (if the money remained intact at all times) because of
where it originated — Los Angeles. Most of the money the Federal Re-
serve was able to trace went to Las Vegas commercial banks, not Los
Angeles. The Federal Reserve evidence on the fourth source — the
Silver Slipper on October 26, 1970— does not contradict the testimony
that the money was kept intact from origin to return.
The discussion of Federal Reserve evidence on sources for the de-
liveries should be read as an introduction to the following section on
delivery dates, for a full understanding of the significance of the Fed-
eral Reserve evidence is possible only when the all-important delivery
dates are considered.
Las Vegas — Sands Hotel , early December 1968. — If this was the
source of the first delivery, all the money Rebozo returned as the first
delivery could not have come from the Sands. There are 88 notes in
the money returned and identified as the first delivery that were not
available for commercial distribution until after the Sands withdrawal
and, therefore, would have been put into the $50,000 at a later date or
later dates.
The latest notes were released to the Los Angeles Federal Reserve
Bank on June 12, 1969, some 7 months after the Sands withdrawal.
If this withdrawal was the source of the second delivery, most of
the notes Rebozo identified as that delivery were not in circulation
until well after the Sands withdrawal.
The notes that went into circulation after the Sands withdrawal
show that the money Rebozo returned could not be the exact money
obtained in December 1968. There are three possible explanations:
(a) The money did not stay intact from time of withdrawal by
Hughes’ agents to time of delivery to Rebozo ; (b) it did not stay intact
after Rebozo received it; or (c) some combination of (a) and (b).
Los Angeles — Bank of America , December 5, 1968 (sent to Robert
Maheu by Nadine Henley on December 5 and 6, 1968, in two $25,000
installments) . — As with the Sands withdrawal of the same date, there
977
are 88 notes in the money identified as the first delivery that were not
in commercial circulation until after the money was obtained from the
Bank of America, and even more post-December 5 notes in the second
delivery. In addition, most of the notes Rebozo returned (for both de-
liveries) that could be traced went to commercial banks in Las Vegas.
Few went to Los Angeles commercial banks, and almost none went to
the Bank of America.
This withdrawal almost certainly could not have been the source of
the first delivery (assuming the accuracy of Maheu’s and Rebozo’s
statements about keeping the money intact) because of the 50 consecu-
tively numbered notes discussed earlier. Those 50 notes identified by
Rebozo as part of the first delivery arrived in Las Vegas on the same
day the Henley money was withdrawn from the bank in Los Angeles
and were not in circulation until the next day. Therefore, they could
not have been part of the withdrawal in Los Angeles.
Los Angeles — Cash from, Bank of America , 'probably obtained
June 37, 1961) (sent to Robert. Maheu by Nadine Henley, receipt ac-
knowledged by Maheu on July 11, 1969). — If this withdrawal was the
source of the first del i very, there is no contradictory Federal Reserve
evidence. The latest distribution date for notes returned and identified
as the first delivery is June 12, 1969. If it was the source of the second
delivery, however, a sizable proportion of the notes returned and
identified as that delivery could not have been in commercial circula-
tion until after the June 27-July 11, 1969 period.
This possible source suffers from the same problem of location as
does the earlier Henley money discussed in (2) above. If a delivery
originated at a. Bank of America branch in Los Angeles, one would
expect to find a significant number of notes in the delivery that were
sent to that bank or at least to banks in Los Angeles. Such is not the
case with the money Rebozo returned. In contrast, most of the notes
that were traced went to commercial banks in Las Vegas.
In addition, in the money returned and identified as the first delivery
are 50 consecutively numbered $100 notes that were shipped together
from the Los Angeles Federal Reserve to a Las Vegas commercial
bank on December 4, 1968. If this June- July 1969 money was the source
of the first delivery, and if Rebozo returned the same money he re-
ceived, then those 50 bills had to stay together from December 4,
1968 and find their way to Los Angeles for withdrawal by Henley
some 7 months later. Such a phenomenon seems unlikely.
Taken together, the evidence either makes this source unlikely — or
indicates that the money returned and identified as the first delivery
was not all the same money withdrawn by Henley in June 1969 and
used for a delivery to Rebozo.
Las Vegas — Silver Slipper Casino, October 36, 1970. — This with-
drawal is a source only for the possible second delivery on October
28-30, 1970, since all other possible delivery dates were before October
1970. None of the available Federal Reserve evidence contradicts the
testimony on this date. The latest commercial circulation date on
money Rebozo returned as the second delivery is October 1, 1970, for
a note sent to a commercial bank in Chicago.
978
5. THE FACTS COMPARED WITH POSSIBLE DATES OF DELIVERY
The following is an analysis of possible combinations of delivery
dates based upon Federal Reserve evidence.
Although the reader’s patience may be tested, the most comprehen-
sible format is to analyze each possible combination of delivery dates
in light of what the information obtained from the Federal Reserve
shows. Rebozo and Danner have testified that one delivery was in
San Clemente on July 3, 1970. Consequently, to lend some coherence
to the story, that date will be used throughout this analysis, sometimes
as the first delivery, sometimes as the second.
The evidence from the Federal Reserve contradicts Rebozo’s testi-
mony that the money he returned was the money he received for all
possible combinations of delivery dates save one. The only set of dates
on which the Federal Reserve evidence does not contradict Rebozo]s
testimony is one of the variations under section VII below, and the evi-
dence tends to suggest that set of dates is less likely than several
others.
Further, as discussed in the preceding section on sources, both the
early December 1968 sources (Nadine Henley and the Sands) do not
support the testimony that the money was held intact from time of
origin until its return in 1973. There are some 88 notes in the first
delivery, and even more in the second, that were not in commercial
circulation until after early December 1968.
(a) First delivery: Key Biscayne, April 2-10, 1969; second de-
livery : San Clemente, July 3, 1970. Sources :
1. Sands Casino, early December 1968 (for either delivery),
or
2. Nadine Henley, December 5-6, 1968 (for either delivery),
and
3. Nadine Henley, July 11, 1969 (for the second delivery) .
None of the participants has suggested the April 1969 period as a
possible time of delivery, and Danner testified that his trip to Florida,
which included a business visit to Nassau, could not have been the oc-
casion for delivery. 94 If a delivery did occur at this time, Rebozo’s
testimony that he did not disturb the first delivery from time of receipt
until June 1973 would be incorrect. There are some 50 notes in the
money returned and identified as the first delivery that could not have
been in commercial circulation until after April 2, 1969. In addition,
the evidence on this pair of dates would contradict Rebozo’s testimony
that the money he received as the second delivery was the money he
returned in June 1973, for there are 72 notes in the money returned
and identified as the second delivery that could not have been in com-
mercial circulation until after July 3, 1970.
(b) First delivery: Key Biscayne, June 26, 1969; second delivery:
San Clemente, July 3, 1970. Sources:
1. Sands, early December 1968 (for either delivery), or
2. Nadine Henley, December 5-6, 1968 (for either delivery),
and
3. Nadine Henley, July 11, 1969 ( for the second delivery) .
94 20 Hearings 9518.
979
The June 26 date has never been suggested by any of the parties as a
possible delivery date, although Danner testified that he and Rebozo
discussed campaign contributions about this time. If this combination
is correct, the source for the first delivery would have to be one of the
early December 1968 withdrawals, since the July 11 money came after
June 26. There are a number of notes in the money identified as the
first delivery that were not in circulation until later dates, thus con-
tradicting Rebozo’s testimony. Rebozo’s testimony would also be in-
correct as to the second delivery, for the same reason explained in
possibility 1 above, that is, there are 72 bills in the money returned and
identified as the second delivery that were not in circulation until after
July 3, 1970.
(c) First delivery: Key Biscayne, September 11-12, 1969; second
delivery : San Clemente, July 3, 1970. Sources:
1. Sands, early December 1968 (for either delivery), or
2. Nadine Henley, December 5-6, 1968 (for either delivery), or
3. Nadine Henley, July 11, 1969 (for either delivery).
This is a probable combination of dates, as discussed earlier. 95
Rebozo’s testimony reconciles for the first delivery only if the money
for that delivery was the money Maheu received on July 11, 1969.
However, if the source were one of the early December 1968 with-
drawals, the testimony would not stand up because a number of bills
returned and identified as the first delivery were not in circulation
until after early December 1968. In addition, as with possibilities 1
and 2, the Federal Reserve evidence on the money returned and iden-
tified as the second delivery contradicts Rebozo’s testimony on the
second delivery because there are 72 notes in the money Rebozo ro-
turned and indentified as the second delivery that were not in circula-
tion until after July 3, 1970.
(d) First delivery: Key Biscayne, February 3-5, 1970; second
delivery : San Clemente, July 3, 1970. Sources :
1. Sands, early December 1968 (for either delivery), or
2. Nadine Henley, December 5-6, 1968 (for either delivery), or
3. Nadine Henley, July 1969 (for either delivery).
If this is the correct combination, Rebozo’s testimony stands up for
the first delivery if the money was put together on July 11, 1969,
but not if it was put together in early December 1968, for the reasons
listed in the preceding sections. Further, as with earlier possibilities
1, 2, and 3, the evidence on the money returned and identified as the
second delivery contradicts Rebozo’s testimony.
( e) First delivery : Key Biscayne, March 20-22, 1970 ; second deliv-
ery : San Clemente, July 3, 1970. Sources :
1. Sands, December 5, 1968 (for either delivery), or
2. Nadine Henley, December 5-6, 1968 (for either delivery), or
3. Nadine Henley, July 11, 1969 (for either delivery).
Again, Rebozo’s testimony stands up for the first delivery only if
it consisted of the money Maheu received on July 11, 1969. Similarly,
as with the earlier discussions of July 3, the evidence on the money
returned and identified as the second delivery contradicts Rebozo’s
testimony on the second delivery because of the 72 bills returned and
identified as the second delivery that were not in circulation until after
July 3.
95 See p. 963 supra (for Sept. 11-12, 1969) ; p. 967, supra (for July 3, 1970).
980
(f ) First delivery : San Clemente, July 3, 1970 ; second delivery : Key
Biscayne, August 19-20, 1970. Sources:
1. Sands, December 5, 1968 (for either delivery), or
2. Nadine Henley, December 5-6, 1968 (for either delivery), or
3. Nadine Henley, July 11, 1969 (for either delivery).
This is the first possible arrangement in which the first delivery is
in San Clemente. Once again, Rebozo’s testimony stands up for the
first delivery only if the money delivered to Rebozo was the money
Maheu received in July 1969. In addition, if the second delivery was on
August 19-20, Rebozo’s testimony could not be correct. There are 35
notes in the money he returned as the second delivery that were not
available for commercial distribution until after August 20, 1970.
(g) First delivery: San Clemente, July 3, 1970; second delivery:
Key Biscayne, October 28-30, 1970. Sources :
1. Sands, December 5, 1968 ( for first delivery) , or
2. Nadine Henley, December 5-6, 1968 (for first delivery) , and
3. Nadine Henley, July 11,1969 (for first deli very), and
4. Silver Slipper, October 26, 1970 (for second delivery) .
This is the only one of the seven possible combinations under discus-
sion that can conform to Rebozo’s testimony that the money he re-
turned was the exact money he received. Even this combination recon-
ciles with his testimony only if source 3, the July 11, 1969, money
from Henley, was the source of funds for the first delivery and if
source 4, was the source of the funds for the second delivery. If the
first delivery was put together from source 1 or 2, the general
problem with these dates applies here, that is, there are 88 notes in the
monev returned and identified as the first delivery that were not avail-
able for commercial distribution until after the early December 1968
transactions. If the first delivery was put together on or about July 11,
1969, and delivered on July 3, 1970, Rebozo’s testimony is not con-
tradicted by the Federal Reserve records. 953
If the second delivery was put together on October 26, 1970, Rebozo’s
testimony is not contradicted for that date. The latest date of com-
mercial distribution available on the money returned and identified as
the second delivery is October 1, 1970, for 'a note sent to a commercial
bank in Chicago.
VI. DUNES REPORT
Introduction
Howard Hughes was a significant contributor to President Nixon’s
1972 campaign. Although other principals in the Hughes-Rebozo con-
tribution have disputed him, 96 Mr. Rebozo testified that the $100,000
in cash he received from an agent of Hughes was for President Nixon s
1972 campaign. 97 In addition to the secret contribution to Mr. Rebozo,
Hughes contributed some $150,000 directly to the Nixon reelection
campaign. The Rose Marv Woods’ list of pre-Aoril 7, 1972, contribu-
tors shows a total of $50,000 from Mr. Hughes. The remaining $100,000
95a Note, however, that the 50 consecutively numbered bills In the alleged first delivery
returned bv Rebozo were delivered to Las Vegas banks, thereby making the July 1969
withdrawal from the Los Angeles Bank of America an unlikely source of the money
Rebozo returned. See p. 957 supra.
90 See the discussion on the deliveries to Rebozo at p. 962.
See p. 954.
981
was contributed to various State Finance Committees To Re-Elect the
President after April 7 — generally after the election — and duly re-
corded. 98
Besides being a contributor to Nixon campaigns in 1968 and 1972,
Mr. Hughes was also a man whose numerous business activities were
under frequent Government review. As part of its investigation of
Hughes’ contributions to the 1972 campaign pursuant to Senate
Resolution 60, the Select Committee investigated Hughes’ relations
with Federal agencies from the date of the 1968 Presidential election
through 1972.
The circumstances surrounding Hughes’ efforts in 1970 to buy the
Dunes Hotel in La-j Vegas show questionable conduct at high levels of
the executive branch and raise serious questions about the relation
between campaign contributions by Hughes and Federal actions affect-
ing Hughes. The problems inherent in difficult-to-trace cash contribu-
tions are emphasized in the Dunes case, where Richard Danner, the
man who delivered the Hughes cash to Charles G. Rebozo, the Presi-
dent’s close friend, also presented Hughes’ case on the hotel purchase
directly to the Attorney General in a series of secret meetings.
In early October 1973, the Select Committee staff began examining
documents and interviewing the parties involved in the case. Over 50
interviews were conducted during the course of the investigation. The
Antitrust Division of the Department of Justice cooperated freely
and generously with the inquiry by providing copies of its files on the
Dunes and the two other hotel cases involving Hughes and by making
staff lawyers available for interviews.
A. Prior Antitrust Division Review of Hughes’ Hotel Activities —
The Stardust and Landmark Cases
Between early 1967 and early 1968 Howard Hughes bought four re-
sort hotels in Las Vegas,” as well as a substantial amount of land on
the “Strip,” and there was a widespread suspicion that Hughes wanted
to buy up all of Las Vegas. As shown in memorandums written to and
by Hughes, Hughes was keenly interested in the hotel negotiations un-
dertaken on his behalf by Robert Maheu, chief of Hughes’ Nevada
operations. Copies of some of the 1968 Hughes-Maheu memorandums
in which hotel purchases were discussed have been obtained by the
Select Committee. 1
By March 1968, Hughes was actively pursuing several possible
hotel purchases, including the Stardust in Las Vegas, and was con-
cerned about whether the State gaming commission would approve
any purchases he made, 2 Hughes’ interest in the financial details of
the proposed purchases was typified in Maheu’s March 6, 1968, memo-
randum to Hughes on the Stardust 3 and in Hughes’ memorandum to
98 See GAO list of 1972 contributors. Hughes contributed $50,000 to the 1968 Nixon
campaign,
"The Desert Inn, the Sands, the Castaways, and the Frontier. Hughes also bought the
Silver Slipper Casino, which has no hotel attached to it, in mid-1968.
^Although the Select Committee has no copies of Hughes-Maheu memorandums written
during the Dunes negotiations, there is reason to believe, based upon testimony received,
that Hughes was as intimately involved in the Dunes negotiations as he was in the earlier
purchases. Many of the memorandums were handwritten, and examples Of the memos are
found in the exhibits to this report. These exhibits are all found in 26 Hearings and
for this section, are labeled, as “Dunes exhibits.”
2 26 Hearings, Dunes exhibit 1.
3 26 Hearings, Dunes exhibit 2.
982
Maheu of March 17, 1968, 1 which set forth their evolving under-
standing of the proposed purchase terms. In a memorandum to Maheu
dated March 14, 1968, 6 Hughes explained his strategy for obtaining
gaming commission approval of his proposed purchases, which es-
sentially was to promise the commission that the Stardust would be
Hughes’ last major hotel-casino acquisition in Las Yegas. The Dunes
was apparently of interest to Hughes at this early date, 6 but nothing
happened until 1970.
In early April 1968, the Antitrust Division of the Department of
Justice, aware of Hughes’ interest in the Stardust and other Las Vegas
hotels, began a formal investigation, or preliminary inquiry. The
preliminary inquiry, which consisted of statistical research and analy-
sis of the Las Yegas hotel industry and interviews of Hughes repre-
sentatives, 7 was conducted primarily by James J. Coyle, then a staff
lawyer in the Antitrust Division’s San Francisco office and now chief
of the Los Angeles office. As a result of his investigation, Coyle devel-
oped an expertise in the area of hotel acquisitions that was iater used
in evaluating other proposed purchases by Hughes, including the
Dunes.
In a mid- April memorandum, Richard Gray, a Hughes lawyer from
Houston, told Hughes of a Justice Department request that the
planned May 1 purchase of the Stardust and the Silver Slipper
Casino — also in Las Vegas — be delayed until June 30 to give the
Antitrust Division time to review the case. 8 By April 20, Hughes was
apparently confident that the Justice Department review would pre-
sent no problems, 9 but he was wrong. Although the Nevada Gaming
Commission approved Hughes’ plan to buy the Stardust, 10 the Justice
Department inquiry led to a civil complaint, signed by the required
Justice Department personnel, including Attorney General Ramsey
Clark, and scheduled for filing in late June 1968. 11 Faced with the
prospect of a lawsuit, Hughes’ representatives postponed the merger
shortly before the complaint was to be filed. Consequently, the suit
was not filed. Hughes did not try again to purchase the Stardust,
although Hughes’ representatives tried in vain to obtain a reversal
of the Department’s position in the following months.
The gist of the complaint was that adding the Stardust to Hughes’
other hotel holdings would violate section 7 of the Clayton Act 12 by
4 26 Hearings , Dunes exhibit 3.
5 26 Hearings, Dunes exhibit 4.
6 26 Hearings, Dunes exhibit 5. Hughes’ handwritten notes following Maheu’s information
on the Dunes concern an unrelated matter. Hughes relations with Bill Gay, an aide of his.
7 The Antitrust Division Manual, pp. 54—55, an internal document for staff lawyers
written several years ago. speaks of preliminary inquiries, involving no more than 1 week’s
work by one person, and full investigations, involving more time. The two categories have
in fact been merged, according to present Antitrust Division officials. All investigations, up
to the point of filing a complaint, are now termed “Preliminary Inquiries.”
8 26 Hearings, Dunes exhibit 6.
9 See 26 Hearings , Dunes exhibit 7, an April 30, 1968 Hughes to Maheu memorandum in
which Hughes says, without elaboration, “I am truly impressed with what you tell me
about Justice.”
10 On April 30. 1968, by a 3-2 vote. Under questioning by George M. Dickerson, Chair-
man of the gaming commission, Richard Gray reiterated a pledge made earlier by Robert
Maheu that Hughes planned no more acquisitions of major hotels or casinos in southern
Nevada if allowed to buy the Stardust. Transcript of Nevada Gaming Commission meeting,
April 30, 1968, pp. 76-77. See 26 Hearings, Dunes exhibit 8. Maheu made the pledge to
the Nevada Gaming Policy Board, the investigative arm of the commission, on March 15,
1968. Transcript of gaming policy board meeting, p. 5.
11 The complaint is contained in the official file on the Stardust case, given to the Select
Committee by the Antitrust Division. The complaint and supporting memorandum are at
26 Hearings > Dunes exhibit 9.
13 15 U.S.C. 18.
983
increasing his share of the relevant market — defined in the complaint
as resort hotel rooms in Las Vegas — to almost 40 percent, well beyond
the percentages allowed by leading antitrust cases and by the Merger
Guidelines promulgated by the Department on May 30, 1968, 13 and
hence to an unlawfully anticompetitive level. The proposed complaint
and accompanying legal memorandum are important reference points
for the later handling of the Dunes case by the Justice Department.
In the fall of 1968 Hughes became seriously interested in buying
the Landmark Hotel in Las Vegas, 14 the then unfinished structure that
was beset with substantial financial problems. Hughes’ lawyer, Richard
Gray, and lawyers for the owner submitted to the Antitrust Division a
written request for advance approval, called a “business review letter,”
contending that the Landmark was a “failing company” that could be
saved from bankruptcy only by Hughes’ offer. The “failing company
doctrine” is an explicit exception to the strictures of the merger guide-
lines. 15 The procedures for processing and granting requests for busi-
ness review letters are set forth in Antitrust Division regulations. 16
The Landmark file is extensive. 17 As in the Stardust case, the pro-
posed purchase was found to violate the merger guidelines. The Anti-
trust Division expressed to the buyer and seller serious doubts about
whether the “failing company” defense, necessary to override a viola-
tion of the guidelines, had been adequately established and demanded
more proof.
A full-scale investigation was launched by the Antitrust Division,
including numerous interviews of possible alternative purchasers by
Antitrust Division lawyers, particularly James Coyle, who had worked
on the Stardust case. On January 17, 1969, the Antitrust Division for-
mally approved the purchase — in writing — having decided that an
exception to antitrust rules was justified because no other alternative to
bankruptcy existed besides Hughes. 18 Hughes now owns the Landmark.
B. The Dtjnes
1. HOW IT BEGAN
Hughes’ proposed purchase of the Dunes Hotel in Las Vegas was
handled by Hughes’ representatives and by the Justice Department
very differently than were the Stardust and Landmark cases. In early
1970, Hughes instructed Robert Maheu to negotiate to buy the Dunes.
According to Maheu, the instruction, like so many from Hughes, came
without prior notice and with no explanation of Hughes’ reasons. 19
(The Select Committee has discovered no Hughes-Maheu memo-
13 Relevant portions of the guidelines on horizontal mergers, of which the Stardust
purchase would have been an example, are at 26 Hearings , Dunes exhibit 10.
14 This interest emerged despite the pledge of no more southern Nevada purchases made
to the Nevada Gaming Commission earlier in the year. See note 10, supra.
15 See merger guidelines, pp. 11-12 at 26 Hearings, Dunes exhibit 11.
16 Volume 28, Code of Federal Regulations, section 50.6. The regulations require submis-
sion of all relevant data to the Antitrust Division including collateral oral agreements, and
state that only written clearance can be given by the Department and relied upon by the
parties to a proposed transaction. The regulations in effect at the time of the Landmark
review are set forth at 26 Hearings, Dunes exhibit 12. Revised regulations designed to in-
crease public access to business review letters w r ent into effect on Feb. 15, 1974, as amend-
ments to section 50.6.
17 The Antitrust Division gave the Select Committee the official Landmark file, contain-
ing the exchange of letters between the Antitrust Division and the parties to the Landmark
tra i?« ac J-^e internal memorandums prepared by Antitrust Division lawyers.
See 2 § Hearings, Dunes exhibit 13, for the letter sent to the interested parties by the
Antitrust Division.
19 Robert Maheu interview, January 21, 1974.
984
randums covering the Dunes negotiations.) Maheu says that Hughes,
with whom he was frequently in touch regarding the Dunes, in-
structed him to send Richard Danner, then manager of the Hughes-
owned Frontier Hotel in Las Vegas, directly to John Mitchell to ob-
tain Justice Department approval of the purchase. 20
Maheu stated that, after being thwarted by the Antitrust Division
in the Stardust case, Hughes decided that he would never again “talk
with any Assistant Attorneys General,” but instead would deal only
with “the boss;” that is the Attorney General. 21 Maheu’s explanation
does not square with Hughes’ approach to the Antitrust Division in
the Landmark case, where, shortly after the Stardust confrontation,
Maheu and Richard Gray formally approached the Assistant At-
torney General, Antitrust Division, with a written business review
request.
A more likely reason for sending Danner directly to Mitchell was
that Danner knew Mitchell from the 1968 campaign. 22 According to
Robert Maheu, Hughes, who had to pass upon the hiring of all top
executives, was pleased with the hiring of Danner in early 1969 and
was aware of Danner’s political contacts. Hughes-Maheu memoran-
dums talked specifically about Danner being a liaison to the Nixon ad-
ministration, and Hughes instructed Maheu to supplement Danner’s
income some $10,000-$12,000 per year to compensate him for his liai-
son activities. 23
2. THE MITCHELL-DANNER MEETINGS
John Mitchell’s decision to approve the Dunes purchase apparently
rested on a series of secret meetings between Mitchell and Danner in
early 1970. The following summary is based upon interviews with
Mitchell and Danner, Mitchell’s logs, and Danner’s expense records.
Significantly, there is no record of the Danner-Mitchell meetings,
which no one else attended, in the Dunes file maintained by the Anti-
trust Division. Further, none of the Antitrust Division lawyers who
knew or might have known about the case had any recollection of
meeting witb Danner on the Dunes, and none of them ever learned
of the Danner-Mitchell meetings.
Danner, Rebozo, and Mitchell have denied that there was any
connection between the discussions regarding the Dunes and the
Hughes contribution to Rebozo. Mitchell said that his first knowledge
of the Hushes contributions to Rebozo came from newspaper reports, 24
not from Danner, Rebozo, or anvone else involved in the transaction.
Danner testified that he and Mitchell did not discuss political con-
tributions or the 1972 Presidential campaign 25 and could not recall
discussing the Dunes with Rebozo. 26 Mr. Rebozo testified that he
*> Ibid.
» Ibid.
22 The friendships among: Danner. Mitchell, Rebozo, and President Nixon are covered
elsewhere in this report. See p. 934. supra.
23 Robert Mahen interviews. .Tan. 20. 28. 1974.
24 John Mitchell interview, Oct. 18. 1973. The first news story on the $100,000 was a
Jack Anderson column of Aug. 6, 1971, over a year after the attempted purchase of the
Dunes.
25 20 Hearings 9582.
26 20 Hearings 9581.
985
never talked with Danner about the Dunes 27 or with Mitchell about
any problems related to Hughes. 28
a. Danner's Testimony
Mitchell was aware that Danner was working in Las Vegas for
Hughes. He called Danner in late 1969 and asked to see him when
Danner was next in Washington. On his next trip (date uncertain)
Danner saw Mitchell and discussed a Justice Department strike force
being set up to combat organized crime in Las Vegas. Mitchell was
doubtful that Hughes’ control over the casinos affected the influence
exerted by organized crime in Las Vegas. At Danner’s suggestion the
Attorney General sent a strike force into the Frontier Hotel to review
its operations. Danner testified that a strike force was sent and that
it determined that the operation of the casino was not under “mob”
influence. 29
The Select Committee found no evidence that 'any Justice Depart-
ment lawyer was sent to the Frontier Hotel for such a purpose or that
anybody in the Justice Department ever approved the Hughes’ opera-
tion at the Frontier. One Justice Department lawyer did visit the
Frontier in early 1970. David Nissen, who was an assistant U.S. at-
torney in Los Angeles in 1970, visited the Frontier on either January 21,
1970, or March 9, 1970, solely to examine records from the pre-Hughes
days, then in the custody of Hughes’ employees that were relevant to a
case in Los Angeles. Nissen never discussed the merits of Hughes’ op-
eration with Hughes’ personnel or with any one in the Department of
Justice, including John Mitchell. 30
Danner’s first meeting with Attorney General Mitchell regarding
the acquisition of the Dunes was in January 1970. 31 Danner has stated :
At about that time, the acquisition of the Dunes Hotel
had come up. The Dunes was for sale. I was asked [by
Kobert Maheu] to talk to the Attorney General and ascertain
w r hat the guidelines might be, now or then at the time, rela-
27 21 Hearings 10044. Although Danner and Rebozo testified that they did not discuss the
Dunes during 1969-70, they did talk about several other areas of governmental policy that
were of interest to Hughes such as AEC testing, the ABM system, dumping of nerve gas, the
acquisition of Air West by Hughes, and the pending TWA litigation. See Danner travel
records in the files of the committee.
Danner testified that at various times he and Rebozo discussed Hughes’ desire to stop
atomic testing in Nevada and Hughes’ purchase of Air West Airlines. See 20 Hearings
9595-97. Rebozo testified that they discussed atomic testing but denied any discussions of
Air West. See 21 Hearings 10042. According to Robert Maheu, in March 1970, Hughes in-
structed him to pledge to Rebozo a $1 million contribution if the atomic tests in Nevada
were halted. Maheu stated that he did not make the pledge and convinced Hughes to drop
the idea. Robert Maheu interview. Jan. 20. 1974.
Danner also testified that he talked with Rebozo about a possible negotiated settlement
in th e TWA v. Hughes litigation since Rebozo knew the principals of TWA. 20 Hearings
566-67. Rebozo denied such discussions and denied knowing the principals of TWA. 21
Hearings 10049.
In addition, Danner testified that he gave Rebozo a memorandum outlining Hughes’ views
on an ABM system and that Rebozo later told him that the President and Dr. Kissinger
had read it and wanted to brief Hughes. (Hughes declined the offer), 20 Hearings 9596-98.
Rebozo recalled that the Hughes’ people wanted to brief President Nixon and Kissinger on
some subject Rebozo could not recall and that Kissinger was willing to brief the Hughes
people. 21 Hearings 10048.
28 21 Hearings 10045.
29 20 Hearings 9572.
30 David Nissen telephone interviews, Jan. 31 and Feb. 12, 1974. For a discussion of
anticrime considerations in the Dunes decision, p. 992.
31 Danner’s travel records place the meeting between Jan. 7-10, 1970, 26 Hearings,
Dimes exhibit 14. However, Mitchell’s logs show their first meeting to have been Jan. 23.
1970, at 3.45 p.m. 26 Hearings, Dunes exhibit 15. Danner’s records show a meeting with
Mitchell sometime between Jan. 22 and Jan. 25. 1970, to discuss the Dunes. The Jan. 7-10
meeting may have been the one at which Mitchell and Danner discussed the strike force.
Danner could not place the time of the meeting as Jan. 7-10 when asked directly. 20
Hearings 9574.
986
tive to whether or not we would be in violation of antitrust,
bearing in mind that at a former time when they [the Hughes
organization] were negotiating for the purpose of purchas-
ing the Stardust Hotel, the Justice Department had threat-
ened an antitrust suit if they took it. 32
Danner testified that Mitchell asked him to get . . all the figures on
hotel rooms in the State of Nevada, and those owned by Mr. Hughes. 33
Mitchell told Danner he was unfamiliar with the Department’s earlier
position on Hughes’ proposed hotel purchases, so Danner briefed
him. 34
Danner met again with Mitchell regarding the Dunes on February
26, 1970. 35 Danner brought with him what he remembers as a one-page
statistical memorandum showing “ . . . the total number of hotel rooms,
total number of motel rooms, total number of rooms in Hughes’ hotels,
and any percentage.” 36 When questioned by the Select Committee
Danner thought the memorandum had been prepared by A1 Bene-
dict, then an aide of Maheu’s. 37 However, the memorandum w r as pre-
pared by Edward P. Morgan, a Washington lawyer who then repre-
sented Hughes and had represented the owners of the Stardust during
the 1968 negotiations with Hughes. 38 The five-page memorandum (two
of text, three of statistics), which was observed in the official Dunes
file provided by the Antitrust Division, was undated and unidentified
as to source of recipient. Further, there is no indication of how or when
it was put into that file. The copy provided to the Select Committee by
Morgan was attached to a cover letter from Morgan to Robert Mahou,
written on February 27, 1970, one day after what the letter refers to
as the Danner-Mitchell “conference.” 39
Interestingly, none of the Antitrust Division lawyers who worked
on or theoretically had jurisdiction over the case, including then As-
sistant Attorney General Richard McLaren, 49 remembers seeing this
memorandum.
The lack of a stamped date of receipt on the copy in the Dunes file
indicates that the memorandum was hand-delivered to the Department
and placed directly into the file, not routed through the mailroom. A
memorandum setting forth similar statistics and arguments was sub-
mitted to the Antitrust Division on Hughes’ behalf by Edward Morgan
during the Lomdmarlc case. 41 The date of receipt, origin of the memo,
and official reaction to it are noted in handwritten comments on the
memorandum made by an Antitrust Division lawyer, unlike the Dunes
memorandum submitted by Morgan. The memorandum submitted to
Mitchell by Danner in effect argues for two changes in the market
32 20 Hearings 9572.
33 20 Hearings 9573.
34 20 Hearings 9578.
35 26 Hearings , Dunes exhibits 16 and 17. The logs show that the meeting was at 4:15
p.m. and lasted up to 55 minutes.
36 20 Hearings 9573.
37 20 Hearings 9579.
38 Edward P. Morgan interview. Dec. 7, 1973.
89 26 Hearings. Dunes exhibit 18.
40 Richard McLaren interview. Dec. 6. 1973. Other key Antitrust Division personnel who
cannot recall ever seeing the memorandum are Baddia Rashid. Director of Operations,
through whom all investigations and proposed complaints are normally routed. Rashid
interview, Nov. 21, 1973 ; William Swope, an assistant of Rashid, Swope interview.
Nov. 23, 1973 ; Bruee Wilson, then Special Assistant to McLaren and now Deputy Assistant
Attorney General, Wilson interview Nov. 23. 1973 ; Robert Hummel, then Deputy Director
of Operations and now Director of Planning and Budget, Hummel interview, Nov. 28
1973.
41 26 Hearings, Dunes exhibit 19.
987
definition used by the Antitrust Division in the Stardust and Landmark
cases : First, instead of defining the market as resort hotel rooms in
Las Vegas, the Antitrust Division should instead consider all guest-
rooms (that is, all hotel and motel rooms) in Las Vegas or, secondly, all
guestrooms in the entire State of Nevada. According to the unsub-
stantiated figures in the Danner memorandum, Hughes’ purchase of
the Dunes would not have violated the merger guidelines if one of the
alternative market definitions were used.
There is nothing in the Justice Department Dunes file to indicate
that any analysis was done on the memorandum delivered by Danner.
Both James Coyle 42 and Baddia Rashid, 43 Director of Operations in
the Antitrust Division, have noted that such a significant policy change
should not have been made without an extensive analysis by lawyers in
the Division.
Upon receipt of the memorandum on February 26, Mitchell told
Danner, according to Danner’s testimony, that he would “let the boys
look this over and give you an answer later.” 44 The only substantive
discussion during the meeting apparently concerned the statistical
information Danner had provided. Danner testified that the question
whether the Dunes was being managed by criminal elements was not
discussed. 45 Mitchell promised to get in touch with Danner about the
Dunes, which he did when he asked Danner, in a telephone conversa-
tion, to see him the next time Danner was in Washington. 46 That con-
versation was probably on March 9, 1970."
Danner came to Washington and met with Mitchell on March 19,
1970. 48 Danner recalled the conversation as follows :
I went by his office. I cannot recall whether there was any-
body else present, whether he called anyone up to meet with
me, but in a very perfunctory manner he said, “From our re-
view of these figures, we see no problem. Why don’t you go
ahead with the negotiations.” 49
During the same conversation, Danner testified that Mitchell told
him proposed purchase “met the guidelines” 50 (the merger guidelines) .
Danner testified that he could not recall Mitchell showing him, during
the March 19 meeting, any documents reflecting an analysis of the
proposed purchase by Justice Department lawyers. 51 In addition,
Mitchell did not mention anything about removing organized crime
from the Dunes or say that the decision had anything to do with that
consideration. 52 Danner has no recollection that anyone else was
involved in his conversations with Mitchell about the Dunes. 53
42 James J. Coyle interviews, Nov. 14, 1973, and Jan. 10, 1974.
43 Baddia J. Rashid interview, Jan. 17, 1974.
44 20 Hearings 9580.
45 20 Hearings 9578.
40 20 Hearings §573.
47 Mitchell logs. 26 Hearings, Dunes exhibit 20. Danner recalled that he called Mitchell.
20 Hearings 9580. The March 9 entry is consistent with that recollection.
48 26 Hearings , Dunes exhibits 21 and 22.
49 20 Hearings 9573.
50 20 Hearings 9580.
51 Ibid.
52 20 Hearings 9581.
53 Danner stated on earlier occasions that he met with the head of the Antitrust Division,
Richard McLaren, in addition to the Attorney General during these trips to Washington.
See, e.g., his deposition before the SKC on Aug. 4. 1973, and his interview with Select
Committee staff on Aug. 30. 1973* p. 7. McLaren does not remember ever meeting with
Danner. McLaren interview, Dec. 6, 1973.
988
Immediately after the meeting with Mitchell, Danner reported the
favorable resiilt to Robert Maheu and Edward P. Morgan. 54 Although
neither man can remember how or where the message was delivered,
both Danner and Maheu were registered at the Madison Hotel on
March 19, 1970. 55 Maheu remembers Danner telling him that the case
“was taken care of in Washington and there would be no interference
beyond that.” 56
After Danner met with Mitchell and reported to Maheu, he flew to
Florida for the weekend. Maheu does not remember being in Florida
then, 57 but records from the Sonesta Beach Hotel in Key Biscayne
show Danner and Maheu registered there from March 20-22, 1970. 58
On Mar. 20, 1970, at 3 ;30 p.m., Mitchell left Union Station in Wash-
ton on a train trip to Florida. 59 Mitchell returned to Washington on
the evening of March 23. At noon the next day, he went “back to Key
Biscayne,” in the words of his log. 60 Thus, he was apparently in Key
Biscayne when Danner and Maheu were.
President Nixon was not in Key Biscayne during this time period. 61
Danner asserts that he did not discuss the Dunes with Rebozo during
March 20-22, 1970, despite the just-completed meeting with Mitchell,
or at any other time. 62 Danner does not remember whether he saw
Mitchell in Key Biscayne over this March weekend. 63 Mr. Rebozo also
denies any discussion of the Dunes with Danner. 64
Maheu, on the other hand, has raised the distinct possibility of a
quid pro quo arrangement.
On July 4, 1973, Maheu testified that, after Danner returned from
one of his meetings with Mitchell in Washington, Maheu set in mo-
tion one of the two $50,000 contributions to Rebozo. According to
Maheu :
* * * I believe I informed Mr. Bell (Tom Bell, then a
Hughes lawyer in Las Vegas) in the presence of Mr. Danner
upon the return of Mr. Danner from Washington, D.C., that
certain political obligations had to be met as the result of the
trip which Mr. Danner had made. I believe I requested that
Mr. Bell make those funds available to Mr. Danner. 65
The recollections of Danner and Bell on this subject are set forth
in the section on the deliveries of the $100,000. 66 While uncertain
about Danner’s talks with Mitchell, Maheu is certain that he com-
mented about the $50,000 in conversations with Danner about the
Dunes Hotel. When telling Danner that Hughes wanted to see Mitchell
about the antitrust problems relative to the acquisition of the Dunes,
Maheu noted :
54 20 Hearings 9580.
BB 26 Hearings, Dunes exhibit 23.
80 Robert Maheu interview, Jan. 21. 1974.
57 Robert Maheu interviews. Jan. 20 and 21, 1974. Maheu does remember being in Florida
for one weekend in Mar. 1970, having been sent by Hughes to promise Rebozo $1 million
in return for an administration decision to stop Nevada AEC testing (Maheu never made
the promise). Maheu does not connect that weekend with any discussions of the Dunes.
58 Sonesta Beach Hotel records. 26 Hearings, Dunes exhibit 24.
69 Mitchell logs. 26 Hearings, Dunes exhibit 25.
60 26 Hearings, Dunes exhibit 26.
01 Information supplied by Congressional Research Service, Library of Congress.
02 20 Hearings 9581.
83 24 Hearings 11467.
04 21 Hearings 10045.
65 Civil deposition in Maheu v. Hughes Tool Co., Civil No. 72— 305-HP (C.D. Col.), vol.
XII, pp. 1025-26. Danner denied telling Maheu that political obligations had to be met as
a result of his visits with Mitchell. 20 Hearings 9606.
08 See p. 949, supra.
989
I remember telling Danner that we had authority from
Hughes to make a commitment to help the administration in
some of the congressional races they’d be interested in. But
I don’t know to this day if he took the matter up with Mitchell
or someone else. 67
After one of Danner’s trips to Washington to see Mitchell, he and
Maheu, according to Maheu, talked about a planned delivery to
Rebozo. 68
b. Mitchell’s Statement
Mitchell remembers only one meeting with Danner and with Anti-
trust Division officials sometime in the summer of 1970. Mitchell claims
that the Antitrust Division preferred to have public corporations,
rather than criminal figures, owning hotels. The question on the Dunes,
however, was not one of criminal influences, but rather whether the
market definition should be Las Yegas hotels or hotels throughout
Nevada. Mitchell cannot remember whether he or anyone in the De-
partment ever made a decision on the Dunes. In general, Mitchell says
he remembers almost nothing about the Dunes. 69 There is nothing in
the Dunes file written by Mitchell or indicating in any way his opinion
on the case.
3. WHAT HAPPENED IN THE ANTITRUST DIVISION
In early March 1970, 70 Mitchell called Richard McLaren, then head
of the Antitrust Division. According to McLaren, 71 Mitchell empha-
sized that the Governor of Nevada was pushing for Justice approval
of the Dunes purchase by indicating that the Dunes was hoodlum-
owned and that Hughes would buy it and “clean it up.” Mitchell told
McLaren that he was inclined to go along with the purchase and asked
McLaren to determine if Hughes could buy the Dunes without doing
too much violence to the merger guidelines. McLaren interpreted this
as a casual inquiry.
Soon after the call from Mitchell, Mitchell and McLaren met with
James Coyle, who had developed a knowledge of the Las Yegas hotel
situation in his work on the Stardust and Landmark cases. Coyle was
in Washington working on the ITT case. McLaren’s memory of his
conversation with Coyle is vague. 72 In fact, until reminded of it during
his interview, he could not remember meeting with Coyle ; he thought
he had called Coyle at Coyle’s California office. Coyle’s recollection is
much clearer. According to Coyle, 73 McLaren told him that he (Mc-
Laren) might have to approve the Dunes purchase. This was the first
time Coyle had heard of the possibility. McLaren told Coyle that the
67 Maheu interview, Jan. 21, 1974.
68 TMd.
69 Mitchell interview, Oct. 18, 1973.
„ ™? IcIj . aren, £. and Mitchell’s logs show a phone call between them on Mar. 3, 1970.
26 Hearings, Dunes exhibits 27 and 28.
71 McLaren interview, Dec. 6, 1973. McLaren, now a Federal District Judge in Chicago,
based his recollection upon handwritten notes he took during the call from Mitchell.
26 Hearings, Dunes exhibit 29. Those notes were provided to the Select Committee by the
Antitrust Division as part of its Dunes file. On June 24, 1974, Judge McLaren submitted
an affidavit to the Select Committee setting forth his recollection of the Dunes matter. 26
Hearings, Dunes exhibit 28 A.
72 Indeed, McLaren’s recollection of the entire Dunes <*ase is hazy. He based his state-
ments to the^ Select Committee staff and his affidavit primarily upon his notes and memo-
randums made at the time the case was before him.
73 Coyle interviews, Nov. 14, 1973, and Jan. 10, 1974.
990
Governor of Nevada was putting pressure on for approval by
arguing that Hughes would drive the Mafia from the Dunes, and he
asked Coyle for his opinion of the purchase. Coyle remembered say-
ing that approval could not be reconciled with the Department’s 1968
position on the Stardust and that the job of controlling crime should
be handled by the Nevada authorities, not by making exceptions to
antitrust policies. Coyle offered to write a memorandum for McLaren
based upon market shares and the merger guidelines and upon his
recollection of the pertinent facts in the Stardust and Landmark
cases. McLaren accepted the offer.
Coyle wrote a five-page memorandum 74 and gave it to McLaren’s
secretary on March 6, 1970, just before he returned to California. He
had no other involvement in the Dunes case and, hearing nothing about
it, assumed that McLaren had been able to kill the idea of a Hughes
purchase. The Coyle memorandum, after outlining the Stardust and
Landmark cases, pointed out that the proposed purchase would in-
crease Hughes’ share of the Las Yegas resort hotel market to about
28 percent. 75 Coyle also noted that the proposed acquisition “* * * is
bound to create controversy” and that, because of prior involvement
with Hughes’ hotel purchases, the Antitrust Division “* * * will jbe
asked to take a position.” 76 The memorandum concluded on an equiv-
ocal note, with Coyle suggesting a possible alternative to outright
approval :
If there are overriding considerations which make it
necessary to modify our prior position on Hughes’ acquisi-
tions in Las Vegas, we should tie the acquisition to the chang-
ing and unsettled market structure as suggested by Parvin
Dohrman [another hotel case] and preserve our right to
secure divestiture at a later date if it becomes necessary. 77
On March 8, 1970, a Sunday, McLaren worked on the Dimes matter
in his office for one-half hour, 78 presumably evaluating Coyle’s
memorandum.
Four days later, on March 12, 1970, McLaren and Mitchell met at
5 p.m. 79 and discussed the Dunes for approximately 15 minutes. 80
McLaren told Mitchell that the purchase would violate the merger
guidelines and would make the Department look bad because of its
prior position on the Stardust. 81 McLaren also suggested that Nevada
could act on its own against criminal figures running casinos by insti-
tuting license revocation proceedings. McLaren told Mitchell that the
Antitrust Division could accept the Hughes purchase if “. . . there
74 26 Hearings , Dunes exhibit 30.
to xd. at pp. 4-5. While Coyle did not state directly that such an increase would violate
the Merger Guidelines (26 Hearings , Dunes exhibit 10), McLaren was presumably familiar
with them and aware that 28 percent of the market would be a violation.
78 26 Hearings, Dunes exhibit 30. p. 5.
77 Ibid. Coyle, in his Jan. 10, 1974, interview, said that he substituted the word “modify”
for the word “reverse” in the final paragraph of his memorandum. He also stated in that
interview that the only “overriding considerations” he had in mind were the antihoodlum
concerns expressed to him bv McLaren. Coyle did not report on his work for McLaren to his
superior in San Francisco, Marquis Smith. Coyle interview, Jan. 10, 1974; Marquis Smith
interview, Oct. 16. 1973.
78 McLaren diary. 26 Hearings, Dunes exhibit 31.
78 26 Hearings, Dunes exhibits 32 and 33.
80 26 Hearings , Dunes exhibit 34.
81 McLaren’s recollection of this conversation is based almost entirely upon the memo-
randum he wrote to the Attorney General on Mar. 26. 1970. 26 Hearings, Dunes exhibit 35.
The circumstances surrounding that memorandum and its discussion of other events are
discussed below.
991
were no other legitimate and reasonable bids,” 82 According to Mc-
Laren :
My remarks did not express and were not intended by me
to express my approval nor to substitute for the formal inves-
tigation and report procedure which precede Division action
on acquisitions of this kind. 83
The meeting concluded without Mitchell indicating what his reaction
to McLaren’s presentation was or what his position on the purchase
would be. This was the last discussion on this subject McLaren re-
members having with Mitchell.
Danner testified that on March 19, as noted earlier, Mitchell con-
veyed oral approval of the proposed purchase to Danner. McLaren
says that he never met Danner or any Hughes people, that he knows
of no Mitchell meetings with Hughes’ representatives, and that he
knows of no approval given to Hughes by Mitchell. On March 26,
unaware that Mitchell had given oral approval to Danner one week
earlier, McLaren wrote a two-page memorandum to Mitchell re-
viewing their early March phone conversation and their March 12
meeting. 84
McLaren, however, did not recall any discussions with Mitchell
about the case after March 26, 1970. 84a With one possible exception, 85
no one in the Antitrust Division remembers seeing McLaren’s March
26 memorandum or talking with McLaren about it. McLaren insists
that, in his March 26 memorandum, as in his March 12 meeting with
Mitchell, he in no way intended to approve the proposed Dunes pur-
chase or to relinquish his control of any future investigation if what
McLaren saw as a casual inquiry turned into serious negotiations for
the sale. 86
4. THE FBI’s ROLE
McLaren’s March 26 memorandum was prompted by a March 23
memorandum written to him by FBI Director J. Edgar Hoover (with
copies to no one else) . 87 According to the memorandum, on March 19,
the day Mitchell gave the go-ahead to Danner, someone representing
Hughes told a Dunes representative that the Antitrust Division would
not oh j ect to the purchase.
Because McLaren had not given his approval, he wrote the memo-
randum to Mitchell so that Mitchell could clarify any misimpressions
he might have had. 88 It was McLaren’s impression that Mitchell had
talked with the Governor of Nevada about the Dunes (an impression
traced back to what Mitchell told him in their first conversation in
early March), and that the Governor had in turn talked to repre-
sentatives of Hughes, who in turn had approached the Dunes. The end
result of this chain was the clearly erroneous impression, held by the
Hughes and Dunes representatives, that the Antitrust Division had
82 26 Hearings, Dunes exhibit 35, p. 2.
83 26 Hearings, Dunes exhibit 28 A, pp. 4-5.
84 26 Hearings, Dunes exhibit 35.
See 26 Hearings , Dunes exhibit 28 A.
85 Baddia Rashid savs he may have seen the memorandum at some point, but he also says
that he may be confusing some of the language in it with material he read on the Stardust
ease. ,Tan. 17, 1974. interview.
ssRVbnrrt .T. McLaren interview. Dee. 6, 1973.
87 26 Hearings, Dunes exhibit 36.
88 Richard McLaren interview, Dec. 6, 1973.
35-687 0 - 74 - 64
992
approved the purchase. McLaren attached the March 23 Hoover
memorandum to his memorandum to Mitchell and concluded the
memorandum as follows :
I trust that the attached FBI report inaccurately records
the understanding 1 which the State government received from
the Department. 89
Unfortunately, the FBI has been unable to provide further explana-
tion of the Hoover memorandum and any interest it may have had in
the Dunes. There are no FBI memorandums in either the Stardust file
or the Landmark file. One Antitrust Division official has stated that
this kind of apparentlv self-initiated FBI involvement in an antitrust
case is unusual. 90 Another Antitrust Division official said that a memo-
randum directly to the Assistant Attorney General from the FBI Di-
rector was unusual. 91
Hughes and his representatives were interested in enlisting FBI
support for Hughes’ hotel purchases at least as far back as the time of
the Stardust. In a February 12, 1968, memorandum 92 to Maheu,
Hughes urged Maheu to meet with Dean Elson, then head of the Las
Vegas FBI office and later a Hughes employee, and George Dicker-
son, chairman of the Nevada Gaming Commission, to convince Dicker-
son that Hughes should be allowed to buy the Stardust because he
would drive out criminal elements. James Coyle, in one of his Star-
dust memorandums, dated April 26, 1968, reported that the FBI was
pleased to see Hughes enter the Las Vegas hotel market, 93
Harold Campbell, who headed the Las Vegas FBI office at the time
of the attempted acquisition of the Dunes, said that he may have writ-
ten one memorandum to Washington on a report he received— -some-
time after the Dunes negotiations terminated — that the negotiations
had taken place, but he did not remember hearing about any Antitrust
Division interest in the case. 84
5. THE “anticrime” FACTOR IN THE DUNES DECISION
As the preceding discussion showed , John Mitchell told his Antitrust
Division chief, Richard McLaren, that he (Mitchell) wanted to ap-
prove Hughes’ plan to buy the Dunes because Hughes would drive out
criminal elements present there. Mitchell told McLaren that the Gov-
ernor of Nevada was pushing for approval of the purchase on this anti-
crime ground, and McLaren relaved that information to Covle, 95 When
talking with Danner about, the Dunes, however, Mitchell never men-
tioned the anticrime argument or the Governor of Nevada, 96 and Dan-
ner never approached Mitchell from that, angle. According to Danner,
he simplv gave Mitchell a statistical memorandum on hotel rooms in
Nevada, 97 a memorandum recalled by neither McLaren nor any other
Antitrust Division lawyers who should have or might have seen and
evaluated it remembers. According to Danner, the onlv Danner-
Mitchell discussion regarding criminal elements in Las Vegas hotels
89 26 Hearings , Dunes exhibit 35, p. 2.
90 Robert Hummel interview, Nov. 28, 1973.
01 Bad^ia Rashid interview. ,Tan. 17, 1974.
62 26 Hearings , Dunes exhibit 37.
93 26 Hearings, Dunes exhibit 38, p. 5.
94 Harold Campbell interview, Dec. 18. 1973.
05 See p. 989, supra.
90 See p. 985, supra.
97 See p. 986, supra.
993
was the discussion they had in late 1969 about the Frontier Hotel. 98 In
an attempt to determine where Mitchell got the information he con-
veyed to McLaren in early March 1970 and whether it was correct and
relevant to the approval he gave Danner, the Select Committee con-
ducted numerous interviews.
Paul Laxalt was Governor of Nevada at the time of the Dunes and,
according to McLaren, the source of pro-Hughes pressure for approval
of the Dunes acquisition. He was interviewed twice and later submitted
an affidavit to the Select Committee. His statements flatly contradict
every aspect of Mitchell’s apparent assertion to McLaren that Laxalt
was promoting Hughes. Laxalt had supported Hughes in his early
hotel purchases in Las Vegas, 99 but the Dunes presented a different case-
in his affidavit to the Select Committee, Laxalt denied discussing the
Dunes with any officials in Washington, stated that he would have
opposed Hughes’ plan if he had heard about it because Hughes had
reached his limit of gaming licenses in southern Nevada, and indicated
that the Dunes was, in his opinion, a “well-operated hotel, free of any
problems.” 1
Laxalt’s position was supported by Frank Johnson, who at the time
of the attempted acquisition of the Dunes was chairman of the Nevada
Gaming Policy Board, the investigative arm of the gaming commis-
sion. He, too, never heard about the Dunes plan and would have
opposed it. 2
Thinking that Mitchell might have been getting the anticrime argu-
ment he used with McLaren from within the Justice Department, the
Select Committee interviewed numerous Justice Department law-
yers to determine what, if any, feeling there might have been in the
Department that a Hughes purchase of the Dunes in 1970 would have
been desirable. 3
None of these men was aware of any Hughes interest in buying the
Dunes during 1970 or talked with Mitchell about the matter.
eR See p. 985, supra. .
09 On July 25, 1968, 1 month after Hughes had pulled back from buying the Stardust in
the face of the threatened Justice Department suit, Laxalt wrote Attorney General Ramsey
Clark to urge reconsideration of the Department’s position. 26 Hearings , Dunes exhibit 40.
The letter promoted Hughes as a beneficial presence on the Las Vegas hotel scene. Writing
for the Attorney General, the Assistant Attorney General, Edwin Zimmerman, replied to
Laxalt on Aug. 13, politely rejecting his arguments and emphasizing the Department’s
“. . . responsibility for the consistent enforcement of the antitrust laws.” 26 Hearings ,
Dunes exhibit 41. .
1 Paul Laxalt affidavit, 26 Hearings, Dunes exhibit 42. That portion of the affidavit deal-
ing with the attempted delivery of $50,000 to then President-elect Nixon or an aide of his
is covered elsewhere in this report. See p. 938, supra .
2 Frank Johnson interview, Dec. 19, 1973.
3 The following people were interviewed :
1. Will Wilson, Assistant Attorney General in charge of the Criminal Division at
the time of the Dunes (Will Wilson interview, Feb. 6. 1974) ;
2. Henry Petersen, present Assistant Attorney General, Criminal Division, Deputy
Assistant Attorney General at the time of the Dunes (Henry Petersen interview,
Feb. 19, 1974) :
3. John C. Keeney, present Deputy Assistant Attorney General, Criminal Division,
Chief of the Fraud Section at the time of the Dunes (John Keeney interview, Feb. 14,
1974) : „ . ' . , ,
4. William Lynch, Chief of the Organized Crime and Racketeering Section, Criminal
Division, now and at the time of the Dunes (William Lynch interview, Jan. 31, 1974) :
5. Fred Vinson, Jr., Assistant Attorney General, Criminal Division, 1965-69 (Fred
Vinson, Jr,, interview, Dec. 17, 1974) ;
6. Richard Crane, head of Los Angeles office of Justice Department strike force,
1970-present (Richard Crane interview, Jan. 31, 1974) ;
7. David Nissen, Assistant U.S! attorney, Los Angeles; at the time of the Dunes
involved in a Las Vegas prosecution (David Nissen interview, Jan. 31, 1974) ; and
8. Mike deFeo, head of the Kansas City strike force, Department of Justice; a
Special Assistant U.S. attorney in Los Angeles at the time of the Dupes, with responsi-
bilities for organized crime prosecutions in Las Vegas (Mike deFeo interview, Jan. 15,
1974).
994
As a result, the source of John Mitchell’s argument for approving
the Hughes purchase that he conveyed to McLaren has not been
determined. 11
Hughes’ representatives had made the anticrime argument in 1968
at the time of the Stardust case. There was some discussion between
Edwin Zimmerman, Assistant Attorney General, Antitrust Division,
and Fred Vinson, Jr., Assistant Attorney General, Criminal Divi-
sion, about Hughes’ plan to buy the Stardust, with Vinson deferring
to the Antitrust Division but seeing merit in Hughes’ argument. 12
The antihoodlum argument was rejected by the Antitrust Division. 13
6. WHAT HAPPENED AFTER THE MARCH 26 MEMORANDUM
McLaren said that, after March 26, he heard nothing about the
Dunes from Mitchell or anyone else and talked with no one about
the case until late in November — discussed below. However, Walker
B. Comegys, McLaren’s deputy, had a different recollection. 14
Comegys distinctly remembered McLaren stopping by his office just
before McLaren left Washington on a trip. McLaren told Comegys,
according to Comegys, that Mitchell had decided not to oppose
Hughes’ plan to buy the Dunes because all other potential purchasers
had Mafia connections. This was the first and only time Comegys
heard about any concern about the Dunes within the Justice Depart-
ment. According to McLaren’s logs, he left for Europe on May 21,
1970. 13 McLaren, emphasizing that he cannot remember Mitchell tell-
ing him he had approved the Dunes purchases, was willing to accept
Comegys’ recollection and said he would be terribly surprised if Mitch-
ell granted approval without consulting him, since, as far as he knew,
Mitchell never doublecrossed him. 16
Although Mitchell’s log for May 21 shows no call to or from Dan-
ner, 17 Danner’s telephone records show a call to the Justice Department
on May 21. 18 Danner recalled only that the negotiations fell through
sometime after March 19, 19 but it is possible that he called Mitchell
on May 21, as the Hughes- Dunes negotiations were apparently nearing
completion, and thus prompted a Mitchell-McLaren conversation and
McLaren’s apparent conversation with Comegys. This chain of events
11 If Mitchell had asked officials in the Criminal Division about the Dunes and about
how Hughes ran his casinos, he would have learned that the casino manager at the
Dunes, Sidney Wyman, and several other principals of the Dunes were then under investi-
gation by the IRS and the Justice Department for possible criminal violations of the
Federal tax laws stemming from the casino operations. Wyman and the others were later
indicted and acquitted at trial on Oct. 31, 1972, in Criminal No. LV— 2434 (D. Nev.), filed
Dec. 14. 1971, in Reno.
Further, if Mitchell had initiated a thorough investigation of Hughes’ practices re-
garding casinos, he would have learned that retaining key personnel was Hughes’ stand-
ard practice when he bought casinos and hotels. Robert Morgan executive session, Dec. 12,
1973, pp. 238-39. (Morgan is assistant comptroller of the Summa Corp. From 1967 to
1973 he was in charge of the Las Vegas accounting office of the Hughes Tool Co.) The
tentative contract later drawn for the sale of the Dunes to Hughes contained a clause for
the retention of Wyman. Hughes was so interested in keeping Wyman that he offered him
a $3 million loan in addition to the retention clause. (Interview of Wyman and Morris
Shenber, lawyer and principal in the Dunes. Dec. 20, 1973.)
12 26 Hearings , Dunes exhibit 44.
13 See Zimmerman’s memorandum to Vinson, 26 Hearings , Dunes exhibit 45, and a
memorandum prepared by Coyle, 26 Hearings , Dunes exhibit 30, p. 10.
14 Walker B. Comegys interviews, Nov. 5, 1973, and Dec. 19, 1973.
15 26 Hearings, Dunes exhibit 46.
ia McLaren interview, Dec. 6, 1973. In his affidavit, at p. 5, McLaren stated that he
could recall no conversation with Comegys regarding the Dunes after Mar. 26, 1970. (See
26 Hearings, Dunes exhibit 28A. )
17 26 Hearings, Dunes exhibit 47.
18 26 Hearings, Dunes exhibit 48.
19 20 Hearings 9586.
995
is speculative, of course, but it may provide an explanation of the
otherwise coincidental Danner call and McLaren comment, both on
May 21.
At 5 :05 p.m., on Friday, May 22, Comegys received a phone call 20
from Howard Adler, a Washington lawyer who was calling on behalf
of lawyers for the Rapid-American Corp., which, like Hughes, was
then negotiating a possible purchase of the Dunes. As Comegys recalls
the conversation, 21 Adler, whom Comegys knew, told him that the
people he was calling for represented another potential buyer of the
Dunes who had no Mafia connections. Comegys told Adler he had
gotten the message ; Comegys made no comment to Adler on the Anti-
trust Division’s position. Comegys did not remember whether he re-
ported this call to anyone in the Antitrust Division, to Mitchell, or
to McLaren when he returned from Europe in early June. Mitchell’s
log shows a conversation with Comegys at 12 :15 p.m. on May 22, before
Adler called, 22 and both Mitchell’s and Comegys’ logs 23 show a
telephone conversation between them on May 25, the next business
day after May 22.
The Adler-to-Comegys call came about as follows: Les Jacobsen, a
New York lawyer for Rapid-American and partner in Fried, Frank,
Harris, Shriver & Jacobsen, who was in Las Vegas negotiating
with Dunes representatives, 24 learned that Hughes was also interested
in buying the hotel. Jacobsen remembered that Hughes had had anti-
trust problems with his Las Vegas hotel interests in the past and
wanted to make the Antitrust Division aware of another purchaser.
Jacobsen called Milton Eisenberg in the firm’s Washington office and
told him to call the Antitrust Division. Eisenberg then called Adler,
because he knew that Adler, who had been in the Antitrust Division,
would know whom to call. 25 (Adler was not in the same firm as Jacob-
sen and Eisenberg.)
Adler told Comegys that he hoped the Antitrust Division would
consider not only antitrust questions on the Dunes, but would also look
to the question of criminal influences in Las Vegas hotels. 26 Neither
Jacobsen nor Eisenberg remembered saying anything about the anti-
Mafia argument.
The Select Committee discovered no direct link between the May 22
Adler-to-Comegys call and the May 22 letter described below.
On May 22, 1970. as the Hughes-Dunes negotiations appeared to be
nearing agreement, 27 James Hayes, a New York City lawyer — partner
in Donovan, Leisure, Newton & Irvine — representing Hughes on the
TWA v. Hughes case, wrote a letter to the presiding Federal judge,
Hon. Charles Metzner of the Southern District of New York, inform-
ing the judge that Hughes was about to buy the Dunes for $35 million
in cash and that the Attorney General had approved the purchase. 28
Hayes recalled being instructed by Robert Maheu to write the letter. 29
20 Comegys log. 26 Hearings , Dunes exhibit 49.
21 Comegys interviews, note 14 supra.
23 26 Hearings, Dunes exhibit 50.
23 26 Hearings, Dunes exhibits 51 and 52.
24 Les Jacobsen interview. Dec. 14, 1973.
23 Milton Eisenberg interview, Dec. 17. 1973.
26 Howard Adler interview. Oct. 23, 1973.
27 As described in section 7 below.
28 26 Hearings, Dunes exhibit 53; referred to by Judge Metzner in his opinion setting
the amount of bond. Trans World Airlines, Inc. v. Hughes, 314 P. Supp. 94, 98 (S.D.N.Y.
1970).
29 James Hayes telephone interview, Dec. 6, 1973.
996
Hughes had recently lost a large monetary judgment in the district
court and was before Judge Metzner on the question of how large
the supersedeas bond should be for appeal. The judge was concerned
that Hughes was tying up too many of his assets in nonliquid items,
which could present problems of liquidity if the judgment against
Hughes were upheld on appeal. Maheu remembered telling Hayes, at
Hughes’ request, to write the letter, 30 but did not remember telling
Hayes that Mitchell had approved the deal. 31 Edward P. Morgan, who
was in Las Yegas with Maheu on May 22 negotiating the deal for
Hughes, remembered talking with Hughes’ lawyer Chester Davis after
Maheu brought him into a Maheu-Davis telephone call. 32 Morgan told
Davis that the deal was on the verge of final agreement. Davis told
Morgan that he needed the information for Judge Metzner; Morgan
assumed that Danner relayed the information from Mitchell to
Hayes. 33 Richard McLaren was unaware of the letter until apprised of
it by the Select Committee staff. Based upon the integrity and reputa-
tion of Hayes and his firm, McLaren was sure that Hayes would not
have written the letter without receiving assurances that Mitchell
had approved the deal. 34
7. THE NEGOTIATIONS AND THEIR COLLAPSE
Shortly after Danner received approval from Mitchell and gave
the news to Maheu, Maheu — as always, at Hughes’ request — called Ed-
ward P. Morgan and told him to begin negotiations with representa-
tives of the Dunes, Morgan described the call this way :
I got a call from Mr. Maheu, saying that Mr. Hughes was
most interested in acquiring the Dunes Hotel, and I remem-
ber my reaction was, in effect, how in the hell does he expect
to do this, when he was turned down on the Stardust deal by
the Antitrust Division, and in the intervening period, ac-
quired the Landmark under an exception, and then I learned,
as I had learned in other areas, that mine was not to know the
reason why, that Mr. Hughes wanted it done. 35
Maheu assured Morgan that Hughes was satisfied that there would
be no Justice Department objections. 36
Morgan, assisted by Tom Bell, Hughes’ personal lawyer in Las
Yegas, negotiated with Morris Shenker, the St. Louis lawyer who
represented the Dunes, and Sidney Wyman, casino manager at the
Dunes. Shenker provided the Select Committee with documentation
on the negotiations. The deal fell through in late May 1970.
The course of the negotiations themselves is unimportant, but sev-
eral points are noteworthy. All participants agreed that financial con-
siderations alone led to the breakoff of negotiations in late May 1970,
shortly after the May 22 letter was sent to J udge Metzner. 37 Shenker
“ Robert Maheu deposition, Jan. 29, 1973, vol. VII, in Maheu v. Hughes Tool Go.. Civ. No.
72-305— HP (C.D. Cal., filed Feb. 10, 1973), pp. 570-71 ; Maheu interviews, Jan. 20 and 21,
1974.
31 Maheu interviews Jan, 20 and 21, 1974.
32 Edward P. Morgan interview, Dec. 7, 1973.
» Ibid.
34 McLaren interview, Dec. 6, 1973.
35 Morgan deposition in Maheu v. Hughes Tool Co., Apr. 3. 1973, pp. 84-85.
36 Morgan interview, Dec. 5, 1973.
37 Morgan interviews, Dec. 5 and 7, 1973 ; Shenker and Wyman interview, Dec. 20, 1973 ;
Tom Bell interview, Dec. 17, 1973.
997
produced updated profit-and-loss figures on the Dunes, 38 which showed
a substantial loss for the preceding months due to a loss of business
during remodeling and an employees’ strike. 39 Antitrust considerations
played no part in the termination. In fact, Shenker and Wyman did
not remember questions about the Justice Department’s antitrust pol-
icy ever arising during the negotiations. 40 Morgan remembered
Shenker once asking him if there would be any antitrust problems;
Morgan told him that he, Morgan, had been assured there were none. 41
On November 24, 1970, some 7 months after the negotiations be-
tween Hughes and the Dunes broke off, J. Edgar Hoover wrote a still
unexplained memorandum 42 to the Attorney General, with copies to
the Deputy Attorney General Richard Kleindienst and McLaren.
Hoover reported that Hughes had renewed his interest in the Dunes
and that Edward P. Morgan was implying to someone that the Anti-
trust Division would not object to the purchase. The late date of this
memorandum makes no sense in terms of the statements and docu-
mentation the Select Committee has been given ; because the FBI pro-
vided no further evaluation, the basis of this memorandum is still
unexplained.
McLaren remembered receiving a copy of the memorandum, which
to him did not constitute firm enough information to warrant initiat-
ing a preliminary inquiry. 43 McLaren did write a note 44 to Baddia
Rashid, Director of Operations, when he received the Hoover memo-
randum. He asked Rashid which individual had worked on Las Vegas
hotels earlier, saying that McLaren wanted to talk with him. It is not.
clear whether Rashid ever received the memorandum (note that his
name is crossed out and replaced by the word “File” in McLaren’s
handwriting) . Rashid remembered telling McLaren that Coyle was the
Las Vegas hotel expert. 45 Having learned that, McLaren apparently
did nothing. Neither he 46 nor Coyle 47 remembered discussing this sec-
ond Hoover memorandum. Coyle remembered seeing the memorandum,
the original of which was for some unexplained reason sent to Califor-
nia and routed to Coyle (that was presumably Mitchell’s copy).
The memorandum may have been, in the juxtaposition of the fol-
lowing two paragraphs, Hoover’s oblique way of asking Mitchell why
there had been a change in the Department’s position since the Star-
dust case :
It was reported that Morgan has strongly implied that there
will be no objection from the Antitrust Division of the Depart-
ment of Justice concerning Hughes’ efforts to purchase another
Las Vegas casino.
As you will recall the Antitrust Division objected to Hughes’
attempt to purchase the Stardust Hotel-Casino in Las Vegas in
1968. 48
38 26 Hearings, Dunes exhibit 54.
39 Shenfeer-Wyman interview, Dec. 20, 1973.
40 Ibid .
41 Morgan interview, Dec. 5, 1973.
42 26 Hearings , Dunes exhibit 55.
43 McLaren interview, Dec. 6, 1973 ; see also affidavit at 26 Hearings , Dunes exhibit 28 A.
44 26 Hearings, Dunes exhibit 56.
45 Rashid interview, Jan. 17, 1974.
40 McLaren interview, Dec. 6, 1973. See also 26 Hearings, Dunes exhibit 28A, p. 6.
47 Coyle interviews, Nov. 14. 1973 ; Jan. 10, 1974.
48 26 Hearings, Dunes exhibit 55.
998
Edward P. Morgan, 49 Robert Maheu, 59 and E. Parry Thomas, 61 the
Las Yegas banker mentioned in the Hoover memorandum, denied
that — as reported in the memorandum — they visited the SEC as a
group to seek approval for a cash purchase of the Dunes by Hughes.
C. Conclusion
In contrast to the immediately preceding case involving Hughes’
hotel plans (the Landmark) , the initial approach to the Justice De-
partment on the Dunes was made directly to the Attorney General,
not to the Antitrust Division. It was made by Richard Danner, the
courier of $100,000 to Rebozo, who was also a friend of Rebozo, Mitch-
ell, and President Nixon. Although Danner and Mitchell contend
that their discussions concerned antitrust questions regarding the
hotel market in Las Vegas, Mitchell apparently did not invite his anti-
trust chief, Richard McLaren, to any of the meetings with Danner,
advise him of the meetings, or submit Danner’s statistical memoran-
dum to the Antitrust Division for analysis. In fact, the Danner-
Mitchell meetings were kept so secret that McLaren wrote his one
memorandum to Mitchell on the Dunes 1 week after Mitchell gave
Danner approval of the purchase.
As the evidence demonstrates, the apparent decision by Mitchell to
approve the Dunes purchase is clothed with the appearance of impro-
priety :
1. Secret meetings were held in lieu of the existing procedures
for providing appropriate antitrust analysis :
2. An ad hoc, decision was made by the Attorney General which
reversed the position of the professionals in the Antitrust Divi-
sion, a position based upon considerable study and statistical
analysis; and
3. Except for the fact that the purchase negotiations ultimately
fell through for financial reasons wholly unrelated to antitrust
considerations, this is a classic case of governmental decision-
making for friends.
VII. REBOZO’S 1972 CAMPAIGN FUNDRAISING ROLE
On December 20, 1973, Charles G. Rebozo testified in a civil deposi-
tion as follows : “I am not a fundraiser. I never have been.” 52
However, evidence before the Select Committee indicates that:
1. Rebozo solicited funds at the request of President Nixon. 53
2. Rebozo opened and maintained an account at the Key Bis-
cayne Bank & Trust Co. for the retention of 1972 campaign
funds. 54
40 Morgan interview, Dec. 7. 1973.
50 Robert Maheu interview, Jan. 21, 1974.
51 E. Parry Thomas interview, Dec. 18, 1973. Thomas is chairman of the board of
Continental Connectors, the company that owns the Dunes, He was aware of the Hughes-
Dunes negotiations, but not of any communications between Hughes’ agents and the
Justice Department.
52 Deposition of C. G. Rebozo in Common Cause et al . v. Finance Committee To Re-Elect
the President et al., Dec. 20. 1973, p. 21.
53 26 Hearings, exhibit 15. (The exhibits for the rest of this chapter are at the beginning
of 26 Hearings.)
54 26 Hearings, exhibit 42.
999
3. Rebozo used his personal safe deposit box at the Key Bis-
cayne Bank & Trust Co. to store cash campaign contributions
for the 1972 campaign. 55
4. Rebozo was aware of other “in kind” contributions and cash
contributions. 56
5. Rebozo personally handled at least $190,000 in campaign
contributions for the 1972 Presidential campaign. 57
Rebozo’s discussions with Richard Danner about a cash con-
tribution from Howard Hughes began shortly after the 1968 election. 58
In addition, a memorandum from early 1969 states that Haldeman
informed Ehrlichman that President Nixon asked Rebozo to contact
J. P. Getty for purposes of soliciting “major contributions” to be
controlled by the White House. 59 Edward L. Morgan has said that he
was approached by John Ehrlichman in the spring of 1969 with the
question of the legality of such a contribution from J. P. Getty. 60
Mr. Rebozo testified that he contacted Mr. Getty and arranged an
appointment for Herbert Kalmbach to solicit contributions at Mr.
Kalmbach’s request. 61 On March 21, 1974, Herbert Kalmbach testified
that Rebozo had asked him to solicit funds from Mr. Getty for the
1970 senatorial campaign program. 62 Public documents from the Com-
mittee To Re-Elect the President reflect a contribution to the 1972
campaign of $125,000 by Mr. Getty. 63
Mr. Rebozo testified that he also arranged an appointment for Kalm-
bach with Mr. Raymond Guest to solicit contributions. 64 Public records
reveal a $200,000 contribution by Guest to the 1972 campaign to re-
elect the President. 65
On April 5, 1972, Mr. Rebozo opened an account at the Key Bis-
cayne Bank & Trust Co. for the purpose of retaining 1972 campaign
contributions, 66 entitled the “Committee for the Re-Election of the
President” account. Rebozo stated that he opened the account “to
beat the April 6 deadline with respect to a $10,000 contribution which
had been made.” 67
On April 6, 1972, Rebozo deposited $10,000 in the account, which
was later wired the same day to the Finance Committee To Re-Elect
the President’s account at the First National Bank of Washington,
D.C. 68 The source of this contribution was Atlantic Investors of Miami,
Ltd., partnership of Jay Kislak and Alec Courtelis. 69
Rebozo’s campaign account in the Key Biscayne Bank & Trust Co.
also served as a repository after April 7, 1972, for $29,740 in other
campaign contributions. These contributions were finally transferred
to the finance committee’s main account in Washington, D.C., on
56 21 Hearings 9966-69.
58 26 Hearings , exhibit 43.
57 This figure includes $100, 900 from Howard Hughes, $50,000 from A. D. Davis, and
nearly $40,000 which went through the FCRP account at the Key Biscayne Bank &
Trust Co.
68 See section on delivery of the money, p. 944, supra.
59 26 Hearings, exhibit 15.
60 See Morgan interview, June 3, 1974 ; see also interview of Charles Stuart, June 20,
1974'.
01 21 Hearings 9974.
82 21 Hearings 10181— 82.
83 Paul Barr'ick interview, May 16, 1974, pp. 12-13.
64 21 Hearings 9974
83 See Paul Barrick interview. May 16, 1974, pp. 14-15.
68 Deposition of Rebozo, op. cit. at note 52, p. 8.
87 26 Hearings, exhibit 44.
68 26 Hearings, exhibit 42.
89 26 Hearings, exhibit 45.
1000
April 2, 1973. Rebozo was the recipient of each of these contributions
that were forwarded to Washington, and he acknowledged the receipt
of each contribution with a personal note. 70 Rebozo, however, did not
forward to the campaign committee any portion of the $100,000 cash
contribution from Howard Hughes.
On December 20, 1973, Rebozo testified that he did not receive any
other pre-April 7 campaign contributions besides the Hughes and
Kislak contributions and “others that are reported.” 71 However, only
when 6 months later he was asked specifically about a contribution
from A. D. Davis, did Rebozo acknowledge receipt of a $50,000 cash
contribution from the Davis brothers on “April 4 or 5,” 1972. 72 This
contribution from A. D. Davis and J. E. Davis w r as not reported
in any records of the Finance Committee To Re-Elect the President, 73
nor was it deposited in the account Rebozo established for 1972
contributions.
Mr. A. D. Davis subsequently testified that he delivered $50,000
in $100 bills to Rebozo on April 5, 1972, which was intended only
for President Nixon’s 1972 reelection campaign. 74 Davis also testi-
fied he and Rebozo discussed the importance of the April 7 date and
that Rebozo indicated to him that he would speak to the President
about this contribution. 75
Rebozo testified that he received the contribution from Davis, called
the finance committee office in Washington, D.C., and that the finance
committee dispatched Fred La Rue to Miami to pick up the con-
tribution. 76
In fact, La Rue testified that he did not discuss nor receive any
campaign contributions from Rebozo until October 1972, 77 a full
6 months after the Davis contribution was received.
La Rue testified that he was contacted by Mr. John Kerr of the
Nunn-for-Senate campaign in Kentucky in September 1972 concern-
ing the possibility of sending additional fimds from the Committee
To Re-Elect the President to the Nunn campaign. 78 Mr. Kerr, however,
denies any such request was made by him. 788 La Rue testified he subse-
quently discussed the subject with former Attorney General John
Mitchell, who had initially committed support to the Nunn campaign. 79
La Rue testified that Mitchell suggested that he contact Rebozo for
possible funds. 80 When La Rue called him, Rebozo told La Rue that the
funds were immediately available, and La Rue arranged to pick them
up on his way back to Washington from his home in Jackson, Miss. 81
La Rue’s travel vouchers from CRP indicate that his trip from Jack-
son to Miami to pick up the cash did not occur until October 12, 1972. 82
Finally a letter dated October 13, 1972, from Maurice Stans to Mr.
A. D. Davis states, “Through Bebe Rebozo, I learned of the encourage-
70 26 Hearings , exhibit 46.
71 Rebozo deposition, op. cit. at note 52, pp. 54-56.
72 21 Hearings 10117.
73 See Barrick interview, May 16, 1974, p. 16.
74 22 Hearings 10565.
76 Ibid.
76 21 Hearings 10117.
77 23 Hearings 11153.
78 23 Hearings 11152.
78a Kerr telephone interview, June 11, 1974.
79 23 Hearings 11152-53.
80 Ibid.
81 23 Hearings 11153, 11163-64.
82 26 Hearings , exhibit 47.
1001
ment you have indicated for this year’s election.” The letter makes no
reference to any contribution from Mr. Davis. 83 La Rue testified that he
picked up an envelope containing cash on that date from Rebozo and
that he probably told Rebozo that the money would go to a “senatorial
campaign” without specifying which one. 84
La Rue said in an interview on April 9, 1974, that he received about
$25,000-$30,000 from Rebozo in October. However, in subsequent
sworn testimony, La Rue could not rule out the possibility that he re-
ceived as much or more than $50,000 from Rebozo. 85 However, the date
on which La Rue picked the money up from Rebozo was more than 6
months after Rebozo received the cash contribution from A. D. Davis
and Rebozo did not tell La Rue that the money he gave him was a con-
tribution from A. D. Davis to the President’s campaign. Further, there
are no records of the contribution in Rebozo’s campaign account.
La Rue testified that he returned to Washington, D.C., with the
cash, and commingled it with the cash already in his file cabinet which
was being used to pay the Watergate defendants. 86 La Rue testified
that subsequently a courier for the Nunn campaign picked up a sum
of cash of about the same amount that he had picked up from Rebozo
during this campaign period in 1972. 87 The Nunn campaign, however,
denies receiving any such cash. 88
Several issues remain unresolved concerning the Davis contribution
and related events. Furthermore, Mr. Rebozo refused to appear on
June 26, 1974, pursuant to a subpena and letter dated June 21, 1974, 89
from Chairman Ervin to clarify the record concerning these and other
issues. Major outstanding issues, therefore, remain :
1. Why Mr. Rebozo failed to deposit the Davis contribution in
the bank account opened expressly for the purpose of receiving
pre- April 7 contributions?
2. When, if ever, did Rebozo notify the finance committee
concerning his receipt of the Davis contribution ?
3. Where did Rebozo store the cash in the period of time be-
tween the receipt of the money from Davis and his payment of
funds to La Rue?
4. Were the funds that were turned over to La Rue in the same
amount and the original bills given to Rebozo by A. D. Davis ?
5. Were any funds furnished by Rebozo to La Rue paid to
Watergate defendants, and did Rebozo have any knowledge of
that?
VIII. RETURN OF THE HUGHES CONTRIBUTION
George P. Shultz, Secretary of the Treasury, received a sensitive
and confidential memo from Johnnie M. Walters, Commissioner of the
Internal Revenue Service, on February 23, 1973. 90 The purpose of this
83 26 Hearings , exhibit 48. All other thank-you notes to FCRP donors of similar amounts
obtained by the committee indicate acknowledgement was made by specific reference to the
contributions.
84 23 Hearings 11163-64. Interview of Fred La Rue, Apr. 9, 1974, p. 3.
85 23 Hearings 11154.
89 23 Hearings 11154.
87 La Rue interview, Apr. 9, 1974, p. 3.
88 See affidavits of Governor Louie Nunn and John Kerr in committee files.
89 Counsel to Rebozo has acknowledged to committee counsel that he received the chair-
man’s letter. See also 26 Hearings , exhibit 55.
90 Shultz interview, Jan. 24, 1974, p. 4. 24 Hearings 11648.
1002
memo was to alert Secretary Shultz that the IES investigative team
had concluded that there was a need to interview Charles “Bebe”
Rebozo. 91 Shultz sent this information to John Ehrlichman. 92 In this
memo, Walters explained that the IRS had received testimony from
Richard Danner about a political contribution Danner made on be-
half of Howard Hughes to Rebozo. 93 While the IRS had received this
testimony from Danner on May 15, 1972, a formal request, to interview
Rebozo was not made until February 23, 1973, 10 months later. Al-
though field agents of the IRS had requested permission to interview
Rebozo as early as the summer of 1972, these requests were not author-
ized until April of 1973. According to Walters, this delay resulted
from a policy decision that he and other top-ranking officials within the
IRS made during the summer of 1972. 94 The IRS had concluded that
in an effort to conduct business as free of politics as possible, all mat-
ters that were politically sensitive would be postponed until after the
1972 elections. 95 When requests were made to interview Rebozo during
the summer of 1972, these requests were postponed by Walters per-
sonally in accordance with the above policy. 96
Requests from the IRS field agents to interview Rebozo came to
Walters on a continuing basis. 97 On February 22, 1973, after the elec-
tions, Johnnie Walters discussed these requests with William Simon,
who at that time was Deputy Secretary of the Treasury. Simon sug-
gested that Walters compose a memo for Secretary Shultz, informing
him of the need the IRS had to interview Rebozo. According to Wal-
ters, Simon told him that Secretary Shultz would be meeting with
President Nixon later that day in Camp David and the IRS’ request
to interview Rebozo could be brought to the President’s attention dur-
ing this meeting. 98 At the time, the IRS wanted to talk with Rebozo
only to verify information with regard to whether he had received
$100,000 from Danner. 99 Walters stated that the purpose of this memo
was not to ask for permission but merely to alert, the administration
that Rebozo was to be interviewed by the IRS. Walters emphasized,
however, that the request to interview Rebozo would be postponed
until Walters himself received the go-ahead from Secretary Shultz. 1
As of March 8, 1973, Walters still had not heard from Shultz con-
cerning his request to interview Rebozo. Walters, therefore, spoke
again with Simon to emphasize the need to interview Rebozo. Walters
finally received approval from Shultz on April 7, 1973. 2 03 04 * 06 07 08
Although Walters did not officially inform the White House of the
IRS interest in Rebozo until February of 1973, the White House
actually had received this information as early as the spring of 1972.
Some time between March and June of 1972, a sensitive case report
which mentioned the names of Don Nixon, Charles “Bebe” Rebozo,
Larry O’Brien, and others involved in the Hughes investigation, was
brought to John Ehrlichman’s attention by Roger Barth who was an
01 24 Hearings 11648.
02 Shultz interview, Jan. 24, 1974, p. 4. See also Barth executive session, 23 Hearings
11124. 11231 .
03 24 Hearings 11648.
04 24 Hearings 11642-43.
03 24 Hearings 11641-42.
06 24 Hearings 11643.
07 24 Hearings 11647.
08 24 Hearings 11648.
00 24 Hearings 11649-50.
1 24 Hearings 11654.
2 24 Hearings 11650-51.
1003
Assistant to the Commissioner of the IRS. Barth, in fact, provided
a copy of the sensitive case report to Ehrlichman. 3 Barth testified that
Ehrlichman requested to be kept informed as the case progressed
and expressed specific interest in Larry O’Brien’s involvement. 4
Ehrlichman recalls that he was continually receiving sensitive case
reports concerning the Hughes investigation but that he did not tell
Rebozo of the IRS interest in Rebozo until Barth requested him to
do so. 5
After Walters received a go-ahead from Shultz concerning the IRS
request to interview Rebozo. Walters asked Barth to notify Rebozo
of this. 6 Before notifying Rebozo, however, Barth first spoke with
Ehrlichman to get his aproval of this matter. 7 Ehrlichman has testi-
fied that when the sensitive case report came over :
* * * it came over with a note from Barth saying that I
need to talk to you about this and so I immediately called
him and he said at that time “I need to have a green light on
interviews of Rebozo * * I said, “You know, OK, I
think it is from my standpoint indicated. I will give you the
green light if you are satisfied with that” * * *. 8
According to Barth, he met with Ehrlichman, and Ehrlichman
showed him a copy of Walters’ February 23, 1973, memo. Ehrlichman
asked Barth if Rebozo was in trouble, and Barth explained that as far
as he knew this was just a third-party interview and that the IRS
was not planning to do an audit or a criminal investigation of Rebozo.
With these assurances, Barth has testified that Ehrlichman approved
the interview. Ehrlichman has testified that because of the close re-
lationship between Rebozo and the President, Barth was reluctant
to call Rebozo directly. Ehrlichman, therefore, agreed to call Rebozo. 9
Shortly after Rebozo was informed by Ehrlichman that the IRS
wanted to interview him, Rebozo began to make a concerted effort to
return the $100,000. Rebozo testified that in March and April he at-
tempted to contact Richard Danner to arrange for the return of the
contribution. 10 Danner, however, does not recall any contacts between
Rebozo and himself concerning the return of this money until May
1973. 11 While Rebozo discussed his decision to return Hughes’ contri-
bution with various people including the President, Rebozo has testi-
fied that the ultimate decision to return the money was his alone. 12
Rebozo testified that after Hughes left Nevada in November 1970,
and fired Maheu, Rebozo became very apprehensive about the Hughes
contribution.
* * * So as time went on I [Rebozo] just thought it better
not to use that, money for the 1972 campaign and try to see if
things cleared up and to hold it for the 1971 or 1976, some
point where I could turn it over to the properly appointed
3 23 Hearings 11222. Also see Ehrlichman executive session, 21 Hearings 9683.
4 23 Hearings 11222-29.
5 21 Hearings 9680.
6 24 Hearings 11652.
7 21 Hearings 9680. See also 23 Hearings 11222.
8 21 Hearings 9684.
9 23 Hearings 11231-32 ; 21 Hearings 10068-69 ; see also 21 Hearings 9680.
10 21 Hearings 10060-62. Also see Rebozo interview, Oct. 17, 1973, p. 18 .
11 20 Hearings 9561.
12 21 Hearings 9988.
1004
authority. But matters went from bad to worse with the
Hughes organization * * *. 13
Rebozo was also very concerned that this Hughes contribution would
be disclosed and then any association between Nixon’s 1972 campaign
and Howard Hughes would be a source of embarrassment to the
President as it had in his 1960 campaign. Rebozo testified that :
* * * I didn’t want to risk even the remotest embarrass-
ment of Hughes’ connection with Nixon. I was convinced that
(the Hughes loan to Don Nixon) cost the President the 1960
election and didn’t help him in 1962 in California * * *. 14
Although Rebozo claimed that dramatic organizational changes
within the Hughes organization caused him concern, he made no effort
to discuss this in the context of the contribution with Danner or any
other Hughes employee, nor did he seek advice from any administra-
tion or campaign officials. Finally when Ehrlichman told Rebozo that
he was going to be interviewed by the IRS, Rebozo began to make a
concerted effort to return the money. Although Rebozo said the con-
tribution was for President Nixon he had been hopeful that this cam-
paign contribution could be used in 1974 or 1976. Now, with the IRS
requesting to interview him, Rebozo decided that the money could not
be used for any campaign purposes and that the best course of action
would be to return it. 15
Rebozo has testified that he discussed the Hughes contribution with
the President on two occasions prior to its return. The first conversa-
tion took place in Key Biscayne some time after the 1972 Presidential
election. During this conversation Rebozo has stated that he “explained
the whole picture” to President Nixon. 16 Rebozo testified that he could
not recall what the President’s reaction was to this information but
stated that President Nixon did not offer any advice about whether or
not the money should be returned. 17
Rebozo’s second conversation with President Nixon was in March or
April 1973. This discussion occurred after Ehrlichman had told Re-
bozo that the IRS would be interviewing him. Rebozo has testified that
during his second conversation with the President, Rebozo told him
that he had decided to return the Hughes contribution and that Presi-
dent Nixon agreed with his decision. 18
Rebozo has testified that the next conversation which he had was
with Herb Kalmbach on April 30, 1973.“ The Senate Select Committee
has interviewed Rebozo three times and also questioned him in a 2-
day executive session. While Rebozo in each of his sessions with the
committee spoke freely about his conversation with Kalmbach on
April 30, 1973, he never once asserted that his conversation related
in any manner to information which he later claimed was protected
by the attorney-client privilege.
Rebozo has testified that while he was in the West Wing of the White
House on the morning of April 30, 1973, he ran into Kalmbach in
13 21 Hearings 9969.
14 21 Hearings 9986.
15 21 Hearings 10090.
16 Rebozo interview, Oct. 17, 1973, p. 23. See 21 Hearings 10090. See also 21 Hearings
9994.
17 21 Hearings 10101.
18 21 Hearings 9994.
10 Rebozo interview, Oct. 17, 1973, p. 20. 21 Hearings 10112. See also 21 Hearings 10187.
1005
the halls. According to Rebozo, their meeting was not arranged and
Rebozo was not seeking Kalmbach’s advice. Rebozo testified that:
* * * I think it was just a general discussion. You see, Kalm-
bach and I have numerous discussions, naturally on the San
Clemente interest. He and I worked on the Yorba Linda
House and Whittier property. W T e talked about things like
that * * * I believe I told him about [the Hughes contribu-
tion] * * * he had been involved in fund raising and it wasn’t
going to be any secret. I guess I just felt the key people should
know about it * * * 20
During an interview with the Senate Select Committee, on Octo-
ber 17, 1973, Rebozo stated that he did not ask Kalmbach for any advice
or counsel concerning the return of the money because by —
* * * April 30, 1973, the decision was already made. If I did
ask, it was just for his opinion. As I recall, the part about the
Hughes money was just an irrelevant part of the conversation
* * * 21
Rebozo, during an executive session on March 20-21,1974, testified
that on April 30, 1973, he did ask Kalmbach for his judgment and
Kalmbach told him he thought Rebozo should give it back. Rebozo
does not recall discussing this topic again with Kalmbach.* 2
Kalmbach was also questioned on three occasions by the committee
concerning his meeting with Rebozo on April 30, 1973. In .each of
these sessions with the committee, Kalmbach responded to specific
questions about this meeting and indicated that it related to discussions
concerning the refinancing of San Clemente, and the issue of whether
the $100,000 was used in the purchase of San Clemente, During these
first three interviews with the committee, Kalmbach never asserted an
;attorney-client privilege concerning his meeting with Rebozo on
April 30, 1973. On a fourth and fifth occasion, in an interview on
March 8, 1974, and an executive session on March 21, 1974, Kalmbach,
for the first time refused to testify with regard to this specific con-
versation because of attorney-client privilege.
Senator Ervin, however, on March 21, 1974, ruled that based on
the above-described testimony of Rebozo, he and Kalmbach had not
entered into a valid attorney-client relationship. Because of the
significance of Kalmbach’s testimony pursuant to Senator Ervin’s
instructions, it is set out at length, as follows :
* * * sometime during the week of April 23, 1973, Bebe
Rebozo called me at my office in Newport Beach, I think he
was calling from Key Biscayne and told me he had a matter
he wanted to discuss with me and asked when I would be next
in the East. I told him I too had some items I wanted to go
over with him and that I was scheduled to be deposed in
Washington at 10 a.m. Monday, April 30, and perhaps we
could meet sometime during my 1 or 2 day stay in the
Capital * * * [Rebozo] said he would be in Washington over
the weekend and suggested that we get together Sunday
evening, April 29 * * *
20 Rebozo interview, Oct. 17, 1973, p. 20. See also 21 Hearings 10111-12.
n Rebozo interview, Oct. 17, 1973, pp. 19-21.
22 21 Hearings 10112.
1006
At about 7 :30 on Monday morning, April 30, I took a cab
from the Madison to the Pennsylvania Avenue front gate en-
trance of the White House * * * The person on the desk called
Bebe and announced my arrival and within 5 or 10 minutes, he
came out and met me.
* * * He decided we should use the Fish Room, which is just
off the lobby. We went together and sat in the corner nearest
the door.
* * * After we had spent 10 or 15 minutes covering [var-
ious] points, Bebe went into the matter he wanted to discuss.
* * * [Bebe] said the President had asked him to speak to
me about this problem and not Maurice Stans. He said he
had personally received $100,000 in campaign contributions
from Dick Danner representing Howard Hughes. He said
that he had received two cash contributions of $50,000 each
in 1969 and 1970 * * *
He said that the IRS had scheduled a meeting with him on
this very subject, which would be held 2 or 3 weeks hence.
He said that he had disbursed part of the funds to Rose
Woods, to Don Nixon, to Ed Nixon and to unnamed others
during the intervening years, and that he was now asking for
my counsel on how to handle the problem.
In response to my questions, he reiterated that the money
had been given to him as a contribution by Hughes, and that
the expenditures he had made to the several individuals
including Rose and to the President’s two brothers had come
from the Hughes cash.
I then said that my advice was that he should get the
best tax lawyer he could find, and give him not only the entire
story but also the balance of the Hughes cash for return to
Hughes and a list of everyone to whom he had given money
from these funds to which list should be attached, whatever
backup could be obtained to show the use to which the funds
had been put by the recipients. I said that he and his attorney
should then lay out the facts of the matter exactly out to
the IRS.
Bebe in reply to my advice expressed grave reservations
about so doing for the stated reason that, “this touches the
President and the President’s family, and I just can’t do
anything to add to his problems at this time, Herb.”
I then said I would like to check the validity of my advice
with Stanley Ebner, who I identified as the then general coun-
sel at OMB in the White House, indicating further that Stan
had been counsel to Maurice Stans’ Finance Committee dur-
ing the 1972 campaign, and that he had begun his duties with
Stans after the new finance law took effect on April 7, 1972.
Bebe was very queasy about me talking to anyone about
this matter, and I assured him I would not mention his name
to Stan, and would talk to him only on a hypothetical basis
* * *
Finally, Bebe agreed and we said goodbye to each other
after agreeing to meet the next morning at 8 :30 in the lobby
of the West Wing of the White House. Immediately after
1007
Bebe and I parted, I used the phone in the lobby and called
Stan at his office in the Executive Office Building. I found
him in, and in response to my request for a few minutes of his
time, he suggested that I come right over.
I went over to Stan’s office about 9 o’clock, and after a very
brief exchange of amenities, I asked him to let me check my
judgment against his as to special situation that had arisen.
I then recounted the facts as earlier expressed to me by
Bebe * * *
Stan agreed completely with what I had advised Bebe, and
expressed himself that he could not see any other course * * *
I again met Bebe the next morning. I arrived by
cab from the Madison and was in the lobby around 8 :30.
When Bebe came out to see me, I remember that he — we
wandered around the lobby floor looking for a private meet-
ing place. Finally with Rose Woods along, we went into a
small room on the ground floor of the West Wing. Rose left
us, and we sat down behind a closed door.
I began recounting my visit with Stan, including his con-
firmation of my suggested course of conduct for Bebe to
follow, and before I had completely finished, Bebe cut short
further discussion of the matter with a somewhat baffling
comment, that he saw no problem but he thanked me for my
thoughts * * *
Our entire conversation that Tuesday morning did not last
longer than 15 or 20 minutes, and I recall that I left the White
House around 9a.m. * * * 23
Ebner has stated that he did meet briefly with Kalmbach on April
30, 1973. Ebner recalls that Kalmbach discussed a hypothetical situ-
ation at that time. Ebner cannot recall specific hypothetical facts
furnished him since Kalmbach apparently discussed hypothetical sit-
uations with him on a number of occasions. 24
In a sworn affidavit, James O’Connor, Kalmbach’s attorney, stated
that following the meeting with Rebozo, Kalmbach immediately told
O’Connor all of the details of this meeting including the fact that
Rebozo had disbursed some of the $100,000 Hughes campaign con-
tribution to Rose Mary Woods and the Nixon brothers.
In October 1973, after Kalmbach was interviewed by the com-
mittee, O’Connor dictated a brief memo to his secretary, Margaret
Blakely, which he then asked her to read over the telephone to Rebozo.
The purpose of this memo was to inform Rebozo that Kalmbach had
acknowledged to the Senate Select Committee that he had met with
Rebozo on April 30, 1973, that he testified that the prime purpose
of the meeting was to review certain matters involving the President’s
personal affairs, and indicated that Kalmbach had not given any addi-
tional information concerning this meeting to the committee. 25
On January 25, 1974, O’Connor once again asked his secretary to
call Rebozo and tell him that if Kalmbach was pressed as to any
details of a conversation between himself and Rebozo on April 30,
23 21 Hearings 10189—90.
M Ebner Interview, Apr. 15, 1974, p. 1.
25 O’Connor affidavit, May 14, 1974, see 26 Hearings, exhibit 49.
35-687 0 - 74 - 65
1008
1973, and/or May 1, 1973, that he would state that the discussions
were pursuant to the attorney-client relationship. 26
Margaret Blakely has also provided a sworn affidavit to the com-
mittee that on two occasions she was requested by O’Connor to contact
Rebozo. According to Blakely, both O’Connor and Kalmbach felt it
best if she contacted Rebozo rather than either of them and that if
Rebozo had any questions, she would attempt to get the answers for
him. During her first conversation with Rebozo, in October 1973 :
* * * she was simply advising him that Mr. Kalmbach was
asked on October 12 by Mr. Lenzner to furnish the number
and location of all bank accounts in the name of the President
and on which he was signatory; that Mr. Kalmbach was
concerned about any possible violation of the attorney-client
privilege ; that Mr. Kalmbach was questioned by the Special
Prosecutor’s office and by Mr. Lenzner on October 11 and 12
as to a meeting on April 30 with Mr. Rebozo and Mr. Kalm-
bach acknowledged the meeting took place at or about that
time ; Mr. Kalmbach further advised both investigative bodies
that the prime purpose of the meeting was to review certain
matters involving the President’s personal affairs, including
the sale of the Whittier property and the refinancing of the
San Clemente property, among other things, that Mr. Kalm-
bach was disturbed about reports that campaign funds were
used in the acquisition of the San Clemente property * * *. 27
Blakely’s second conversation with Rebozo was on January 25,
197 4. At this time she told him :
* * * if Mr. Kalmbach is pressed as to any details of a
conversation between himself and Mr. Rebozo on April 30
and/or May 1, he of course would have to tell the truth; that
in the unlikely event he is pressed on this matter, he will of
course state that these discussions were pursuant to the
attorney-client relationship and therefore subject to the
attorney-client privilege * * *. 28
Blakely indicated that during both of her conversations with Rebozo,
he made no comment and had no questions.
Although Rebozo has denied any other conversations with Kalm-
bach concerning this matter, Kalmbach has testified that:
* * * A third meeting was held with Bebe on Tuesday
morning, January 8, 1974. He and I had talked bv telephone
once or twice after he arrived in San Clemente to be with the
President during his stay in California. Never at any time
during these telephone conversations did Bebe mention di-
rectly or indirectly our discussions in the White House on
April 30, May 1.
And finally he called and asked me to meet with him on
Tuesday, January 8. 1 agreed to meet him at 8 :30 in the morn-
ing at the mess at the Western White House. On that date
when I arrived at the gate, the guard told me that Mr. Re-
bozo had left word that I should proceed directly to the guest
house in the living compound. This I did and arrived at the
» Ibid.
27 Blakely affidavit, May 15, 1974, see 26 Hearings, exhibit 50.
28 Ibid.
1000
guest house which is directly across a court from the Presi-
dent’s quarters at 8 :30.
. When I entered the guest house, Bebe told me the reason he
had switched our meetingplace was because he had learned
that a great, number of the press were over at the offices, and
we. would be afforded greater privacy within the compound.
Our meeting lasted for about 1 hour and 15 minutes and
ranged across a number of subjects. * * *
At one point somewhat near the end of the meeting, Rebozo
said words to me to the effect that :
“Undoubtedly, Herb, I have not told you that after you
and I talked last spring regarding the Hughes money, I found
that I had not in fact disbursed any of the Hughes cash to
the several people I named. When I went into the safe deposit
box, I found that the wrappers around the cash had not
been disturbed, and so it was clear that no part of this money
had been used during the several years it was in my box.”
I didn’t make any comment at. all to Bebe when he made
this statement other than to acknowledge what he had said.
We then went on to other items on the agenda, and I left him
around 9 :45 and drove up to Los Angeles * * *. 29
In late April or early May 1973, Rebozo called William E. Griffin
and asked Griffin to fly to Florida to discuss a problem that Rebozo
had. Rebozo did not indicate what the problem was except that he.
had something he wanted to discuss with Griffin that was very im-
portant. Griffin met with Rebozo in Florida on May 3, 1973, where
Rebozo told him for the first time of the Hughes $100,000 campaign
contribution. According to Griffin, Rebozo told him that he had re-
ceived two $50,000 cash campaign contributions from Richard Danner.
These contributions were made in 1969 and 1970. Rebozo also ex-
plained to Griffin that he. had maintained the $100,000 in a safe deposit
box and that he still had the identical bills which Danner had earlier
given to him. Rebozo’s concern at this time was how he should handle
the matter Avith the IRS. 30
Griffin testified that he did not offer any advice to Rebozo during
the May 3, 1973, meeting because he wanted an opportunity to research
certain problem areas which he felt Rebozo may have had concerning
his retention of the $100,000. Griffin stated he told Rebozo he Avas con-
cerned Avith problems of unreported income, gift tax, campaign stat-
utes, and the election statutes. Griffin testified he could recall that.
Rebozo stressed that the bills in his safe deposit box were the exact
same bills he received from a Hughes representative in 1969 and 1970. 31
Griffin testified he returned to New York to do some research for
Rebozo. Tn early May 1973, Griffin met again with Rebozo at Key
Bisc-ayne. Griffin testified he told Rebozo that he should immediately
obtain an independent individual aa'Iio could act on Rebozo’s behalf to
count the money, identify the bills, verify that the money was in a
safe deposit, box, and that this individual should arrange for the re-
turn of the money. Rebozo, according to Griffin, accepted his advice
and asked Griffin if he could act on Rebozo’s behalf. Griffin declined
29 21 Hearings 10191.
30 22 Hearings 10428-32.
31 22 Hearings 10432-33.
1010
because of his close association with Robert Abplanalp who was also a
very close friend of the President’s. Griffin felt that any representa-
tion that he made on Rebozo’s behalf would be tainted with partisan-
ship. 32
According to Rebozo, he did discuss the return of the Hughes con-
tribution with William Griffin. Rebozo, however, did not recall ever
asking Griffin to act in Rebozo’s behalf to facilitate the return of the
money, nor could Rebozo recall any specific advice Griffin offered to
him concerning the need for an independent third party to arrange for
the return of the money. Rebozo does recall that Griffin did some re-
search for him and then later advised Rebozo to turn the money back. 33
On May 10, 1973, Rebozo was interviewed by IRS agents Donald
Skelton and Albert Keeney. The agents explained to Rebozo that they
were investigating the Hughes Tool Co., Robert A. Maheu, John
Meier, and other people associated with the Hughes association, and
that their purpose of interviewing Rebozo was to verify some informa-
tion that they had received concerning a campaign contribution which
had allegedly been given to Rebozo by Richard Danner. Rebozo told
the agents that he had, in fact, accepted a contribution from Richard
Danner and that he still had the money in a safe deposit box. Accord-
ing to the IRS, Rebozo stated that the only persons who knew of the
Hughes contribution were Rebozo and the agents. Rebozo also told
the IRS that he had considered contacting Danner in an effort to
return the money but did not do so because he feared additional pub-
licity. 3 * Rebozo has testified that he cannot recall when he first told
Danner that he wanted to return the money but stated he believed he
told him in March or April 1973. 35 Rebozo, however, later testified that
it was not until after his May 10, 1973, interview with the IRS that
he actually tried to contact Danner to ask him to take the money
back. 36
Danner has stated that he met with Rebozo in Las Vegas, April 1973,
but that this meeting was purely social.
According to Danner, there were no discussions about the return of
the Hughes contribution at this time. 37 Danner has testified that he
specifically recalls the first conversation he ever had with Rebozo con-
cerning this matter took place over the weekend of May 18-20, 1973. 38
Rebozo also recalls meeting with Danner at this time and discussing
the return of the Hughes contribution. 39
During an executive session with the committee, Rebozo testified as
follows concerning his May 18-20, 1973, meeting with Danner :
1. Over the weekend of May 18-20, 1973, Rebozo stayed at the
Madison Hotel where he met with Danner and discussed the return
of the Hughes contribution.
2. According to Rebozo, both he and Danner were in Washing-
ton to attend some social function but Rebozo cannot remember
what it was. Rebozo did not request Danner to come to Washing-
ton.
32 22 Hearings 10438-40.
33 21 Hearings 10064.
84 IRS interview of Rebozo. May 10, 1973, pp. 1-4.
35 21 Hearings 9994. See also Rebozo interview, Oct. 17, 1973, p. 18.
36 21 Hearings 10104.
37 20 Hearings 9561. See also 24 Hearings 11433.
38 20 Hearings 9546-47.
39 21 Hearings 10104.
1011
3. In addition to discussing the return of the Hughes contribu-
tion, Eebozo and Danner also discussed the (political feelings on
the west coast concerning W atergate.
4. Eebozo left Washington on May 19, 1973, to join President
Nixon at Camp David. On May 20, 1973, Eebozo invited Danner to
come to Camp David and discuss with the President what the
political feelings were on the west coast. Eebozo arranged for a
White House limousine to pick Danner up and drive him to Camp
David.
5. Danner met with Eebozo for approximately one-half hour
before the President joined them. Prior to the President’s arrival,
Danner and Eebozo discussed the return of the Hughes contribu-
tion. Throughout the weekend, Danner refused to accept the
return of the Hughes contribution but promised Eebozo he would
talk to his superiors and arrange for it to be returned.
6. The President joined Danner and Eebozo, in Eebozo’s cabin
at Camp David and remained with them for approximately
5 to 10 minutes. During their conversation, there was no men-
tion of the return of the Hughes contribution. The only subject
which Danner discussed with President Nixon was the political
mood on the west coast concerning Water-gate.
7. After the President left, Danner and Eebozo visited for a
short while and then Danner returned to Washington.
8. On May 18, 1973, Danner, Eebozo, and Mr. and Mrs. Abplan-
alp, fleiv to the Adirondack Fisheries in Abplanalp’s private jet
and had lunch. After- lunch, Danner and Eebozo returned to
Washington. While they were with the Abplanalps, there was no
discussion whatsoever concerning the Hughes contribution. 40
Danner testified as follows concerning his May 18-20, 1973, meeting
with Eebozo:
1. Danner met with Eebozo in Washington during the weekend
of May 18-20, 1973 at Eebozo’s specific request that he do so.
2. Danner met with Eebozo at the Madison Hotel and during
this meeting Eebozo told him for the first time that he wanted to
return the $100,000 Hughes contribution. This information came
as a complete surprise to Danner.
3. Danner refused to take the money back because he felt it
wasn’t his money to accept. Danner promised Eebozo that he
would make the necessary inquiries to determine who the money
should be properly returned to. During this weekend, there were
extensive conversations between Danner and Eebozo concerning
the return of the Hughes contribution.
4. Danner has testified that he also spoke with Eebozo about the
political feelings on the west coast concerning Watergate. Ee-
bozo asked Danner if he would stay over and come to Camp David
on the following morning. Danner agreed.
5. On May 20, 1973, Danner met with Eebozo at Camp David
and prior to the President’s arrival discussed the return of the
Hughes contribution. Danner once again refused to accept the
return of the money.
40 21 Hearings 10101 - 2 , 10110 .
1012
6. After the President joined Danner and Rebozo, in Rebozo’s
cabin, there were no discussions of the Hughes contribution or any
other campaign contributions. During their meeting, Danner ex-
pressed to the President what the political feelings were on the
west coast. After the conversation, the President took Rebozo
and Dinner on a brief tour of Camp David.
7. Danner’s meeting with the President and Rebozo lasted for
one to one and a half hours.
8. After the President left, Danner and Rebozo had lunch to-
gether and then Danner returned to Washington.
9. Danner testified that he has never discussed the Hughes con-
tribution with President Nixon.
10. On May 18, 1973, Danner, Rebozo, and Mr. and Mrs. Ab-
planalp flew to the Adirondacks in Abplanalp’s private jet to
have lunch. While the four were together, there were no discus-
sions concerning the Hughes campaign contribution. 41
Deputy Press Secretary Gerald L. Warren, in a statement made to
the press on January 26, 1974, stated that :
* * * Mr. Danner was in Washington to talk with Mr.
Rebozo and did pay a brief visit to the President at Camp
David. The meeting lasted only 5 or 10 minutes and Danner
reported on the mood of the people in the West * * * 42
General Haig testified that while he was not aware at the time
that Danner and Rebozo met with President Nixon at Camp David op
May 20, 1973, he learned of it when it became a public relations issue
in the White House. Haig discussed this matter with Ron Ziegler
Avho informed him that the purpose of the meeeting at Camp David
was to enable Danner to express his support for the President at a
time when the President had been under heavy attack. Ziegler stated
to Haig that he had discussed this meeting with President Nixon. Haig
felt confident that Ziegler “* * * was on top of the matter and had
the details.” 43 Ziegler has stated that he consulted with both the Presi-
dent and Rebozo to confirm that the May 20. 1973, Camp David meet-
ing was only 5 or 10 minutes long. 44
Warren stated that Ziegler confirmed that Rebozo and Danner had
met with President Nixon at Camp David for 5 or 10 minutes. War-
ren did not check either the Cardex or the Presidential logs to deter-
mine the length of the meeting. 45
Danner, in subsequent testimony to the Senate Select Committee, has
reconfirmed his testimony that the meeting he attended with Presi-
dent Nixon and Rebozo lasted at least 1 hour. 46
Abplanalp has stated that he had no knowledge of the $100,000
Hughes contribution which Rebozo received from Danner. Abplanalp
recalls that he has only seen Danner three times in his life. The third
41 20 Hearings 9546-48. See also 24 Hearings 11434-35. See also Madison Hotel records,
May 17—20, 1973, at 26 Hearings, exhibit 51 ; neither Danner nor Rebozo mentioned this
meeting in staff interviews until the committee obtained hotel records which showed that
they were both at the Madison Hotel during this time.
42 Washington Post. Jan. 26, 1974, p. A-12.
43 23 Hearings 11005-6.
44 Ziegler interview. June 24, 1974.
43 Warren interview. Feb. 26. 1974. p. 8.
46 24 Hearings 11472. See also 20 Hearings 9549.
1013
time was in May 1973. Abplanalp has never had any conversations
with Danner concerning the Hughes contribution. 47
Shortly after the May 20, 1973, Gamp David meeting, Eebozo told
Haig of his involvement in the Hughes contribution. This is the only
conversation Eebozo recalls having with Haig concerning the Hughes
contribution. 48
Haig testified that Eebozo did tell him of the Hughes contribution,
and his involvement with it. Haig did not counsel Eebozo to return the
money. 49
On May 23, 1973, William Simon received a telephone call from
General Haig. Haig, at this time, requested an update of information
concerning the Hughes contribution which Eebozo received. Simon
recalled that this i: . formation had been given to the White House long
ago since Ee'bozo’s name had appeared on sensitive case reports. After
the time of Haig’s telephone call, Simon called Don Alexander, Com-
missioner of the IES and asked for an update on the IES investiga-
tion into the Hughes $100,000 contribution to Eebozo. Alexander im-
mediately sent a memo to Simon which detailed the facts of the case.
After receiving this memo, Simon called General Haig to inform him
that Eebozo was going to be investigated by the IES concerning his
involvement with the Hughes contribution. Simon stated that he
thought this was a matter Simon should discuss with the White House
counsels, Buzhardt and Garment. 50
After Simon’s conversation with Haig on May 23, 1973, Simon testi-
fied he discussed with Len Garment the status of the IES investigation
of Eebozo. During his conversation with Garment, Simon used the
memo that Alexander had previously supplied to him. According to
Simon’s log. he was in contact with General Haig, Len Garment, and
Don Alexander on May 23, 1973. 51
Sometime after May 23, 1973, Haig met with White House coun-
sels Garment, Chapman Bose, and Fred Buzhardt to be briefed on
the IES investigation of Eebozo. This meeting took place in Haig’s
office. It was decided that Haig should inform the President of this
investigation since it was a matter which could be potentially em-
barrassing to the President. It was also decided that there should be no
discussions between White House counsel and Eebozo concerning the
IES investigation. Garment suggested to Haig that Eebozo should
get a qualified tax attorney, and that if Eebozo needed a recommen-
dation Garment would provide one. 52
Haig testified he thereafter met with President Nixon to brief him
on the. IES investigation of Eebozo. Haig told the President that the
White House counsel felt that Eebozo should have a competent tax
attorney and that if necessary they could suggest someone for him.
The President told Haig to “tell them to do so.” It was Haig’s general
impression that the information he furnished President Nixon con-
cerning the IES investigation of Eebozo did not come as news to
President Nixon. Haig stated “[President Nixon] just shrugged it
47 Abplanalp interview, Nov. 1, 1973, p. 41. See also 26 Hearings, exhibit 51.
48 21 Hearings 10109.
4& 23 Hearings 11006— 8.
50 23 Hearings 10928-36. 10999. See also Simon’s logs, 26 Hearings, exhibit 52.
51 23 Hearings 10930-35, 11059-63.
52 23 Hearings 10999-11001,11064-66.
1014
off, and as a matter of fact, handled it with a number of ongoing prob-
lems that [Haig] was discussing at the time.” 53
Two or three days later, Haig told President Nixon that Garment
had recommended Kenneth Gemmill as a possible attorney for Rebozo.
The President then told Haig to give this name to Rebozo on the
following weekend when both Haig and President Nixon would be
in Key Biscayne. 54
On the following weekend, which would be either the last weekend
in May or the first weekend in June 1973, Haig gave the name and
address of Kenneth Gemmill to Rebozo. Haig testified that “[a]t
that time Mr. Rebozo took it and said he did not know what he would
do with it, but he obviously was well aware at that time of the IRS
interest in the Hughes $100,000, there is no question about it.” 55
Rebozo has testified that someone in the White House suggested Ken-
neth Gemmill to him as a good tax attorney. “I had heard of [Ken
Gemmill] before and I had been told when all of this business started
that I would probably need Washington counsel. So I got hold of
him.” 56
On June 8, 1973, Gemmill received a telephone call from Rebozo.
Gemmill testified that Rebozo told him that “Garment says that I
should come see you about a problem.” Rebozo did not give any details
to Gemmill concerning his problem at this time. He merely set up an
appointment to see Gemmill on June 11, 1973. 57
Both Gemmill and Rebozo have testified that they met on June 11,
1973, in Gemmill’s Philadelphia office. During this meeting, Rebozo
explained to Gemmill that he had been interviewed by two IRS agents
concerning the $100,000 campaign contribution. Rebozo then described
to Gemmill the events surrounding his acceptance of the $100,000.
Gemmill has testified that at no time did Rebozo ever indicate to him
that Rebozo had consulted with other lawyers. 58
Gemmill recalled that on June 12, 1973, he also called Len Garment
to tell him that Rebozo had been in to see him. Gemmill recalled that
Garment said, “I am glad he is in good hands. You handle him as a
privileged client and do not tell me anything about it. [Gemmill] said
I am to handle him as a privileged client, and [Garment] said ‘yes, do
not tell me anything about it,’ and that was the end of that.” 59 General
Haig recalls that during a subsequent conversation he had with Gar-
ment, Garment had told him Gemmill had been contacted by Rebozo to
represent him in the IRS matter. 60
Gemmill stated that on June 18, 1973, he called Rebozo and told him
that he and Wakefield should go to the safe-deposit box which they
held jointly that contained the $100,000 Hughes contribution. Both
Wakefield and Rebozo were to count the $100,000 and make a list of
the serial numbers from each of the bills to be used as a receipt and
also a way to identify the bills that were returned. Rebozo asked Gem-
mill if he thought it would be advisable to have someone from the
Government there, such as the head of the FBI in Miami, to witness
53 23 Hearings 11001 .
54 23 Hearings 10999 .
23 Hearings 11000 .
se 21 Hearings 10061 .
57 23 Hearings 11174 .
58 23 Hearings 11174 - 75 .
® 23 Hearings 11175 .
60 23 Hearings 10999 - 11000 .
1015
this operation. After some consideration, Gem mill told Rebozo that
it was a good idea since an FBI agent may be able to determine
whether the money has been in the same location for a given period
of time. 61
Kenneth Whitaker, SAO-Miami, FBI, has testified that Rebozo
called him on June 18, 1973, and offering no explanation, asked him
to come to the bank immediately. At around 10 a.m., Whitaker met
with Rebozo and Wakefield at the Ivey Biscayne Bank. Rebozo then
explained to Whitaker that in 1969 or 1970 he had received $100,000
in campaign contributions from Danner, a representative of Howard
Hughes. Rebozo told Whitaker that this contribution was placed in a
bank vault and had never been used or disbursed. Whitaker has testi-
fied that Rebozo wanted him to see if he could determine the age of
the money.
After discussing the money, Rebozo, Wakefield, and Whitaker
joined Margaret Barker, Rebozo's sister, and entered the bank vault.
Each of them signed the access card and then Rebozo removed the
safe-deposit box. Whitaker has stated that the safe-deposit box had
two large brown envelopes, the contents of which Rebozo emptied on
the tables. These envelopes contained 10 to 12 packets of money
approximately three-quarters of an inch thick. These packets were all
$100 bills and appeared to be new. Whitaker has Stated that, after
he saw the money he told Rebozo that there was no way he could
determine the age of the bills. Whitaker stated that he did initial
six or seven of the $100 bills in the upper lefthand comer for identifi-
cation purposes only. 62
After they had completed counting the money and making a list of
serial numbers, they discovered that there was an extra $100 bill.
Rebozo called Kenneth Gemmill to tell him that the list had been
completed. Gemmill suggested that Rebozo try to contact Danner and
that both of them should be in Philadelphia the following morning. 63
On June 19, 1973, Rebozo met with Gemmill in Philadelphia, Dan-
ner, however, did not show up. Gemmill stated that in a telephone
call Danner said that Chester Davis would call. When Davis did call,
Gemmill explained to Davis that Rebozo wanted to return the Hughes
contribution. Gemmill and Davis agreed to meet in Washington, D.C.,
on June 21, 1973. 64
After Gemmill ’s conversation with Davis, Rebozo told Gemmill
that, he had the money with him in a briefcase. Since. Gemmill was not.
willing to accept responsibility for the money, Rebozo decided to bring
it with him to New York and have Griffin hold it until its return could
be arranged. Rebozo then gave Gemmill Griffin’s name and telephone
number and asked him to contact Griffin after a date was arranged
for the return of the money. Gemmill agreed. 65
Rebozo has testified that later that afternoon he met with Griffin
at the Hudson Yalley National Bank in Yonkers, N.Y. Rebozo ex-
01 23 Hearings 11176. See also 21 Hearings 9970-71.
62 Whitaker interview, Nov. 20, 1973, pp. 2-3. FBI Director Kelley, in a letter which he
wrote to the Commissioner of the IRS, stated Whitaker had reported to him that Danner
had given Rebozo this money in 1969 for congressional elections. See also 21 Hearings
9971-73.
63 23 Hearings 11176-77. See also 21 Hearings 9970.
04 23 Hearings 11176-77. See also Danner logs, June 1973, 26 Hearings, exhibit 53. See
also 21 Hearings 10060-61.
63 21 Hearings 10060. See also 23 Hearings 11177.
1016
plained to Griffin that he had just left a meeting in Philadelphia
with Gemmill where he had hoped to return the money. Rebozo’s
efforts, however, were frustrated, and he wanted Griffin to hold it until
its return could be arranged. Griffin agreed to hold the money in his
safe-deposit box at the Hudson Valley National Bank. Griffin testified
that while Abplanalp was in the area during this conversation, he
didn’t hear it. Rebozo assured Griffin that within the next few days
he would receive a call from Ken Gemmill who would tell him when
the money should be returned and where. 66
On June 21, 1973, Gemmill has testified that he met privately with
Chester Davis in Davis’ room at the Madison Hotel. After reviewing
Danner’s statement to the IRS, Gemmill and Davis discussed the dis-
crepancies between Danner’s and Rebozo’s recollection of the delivery
of the money. Gemmill has stated that as far as he was concerned,
none of these discrepancies affected the return of the money.
Davis agreed to arrange for the return of the money and promised
to be in contact with Gemmill within a few days. 67
Gemmill has stated that on Monday, June 25, 1973, Davis called
and told him that the money could be returned to the Marine Midland
Bank, 140 Broadway, New York City, N.Y., on Wednesday, June 27,
1973. Since Davis was planning on being out of town on June 27, 1973,
he told Gemmill that Walter Glaeser, the office manager at Davis’ law
firm, would accept this money on behalf of Howard Hughes, and, as
previously agreed upon, the money would remain in a safe-deposit box
until IRS agents had an opportunity to examine it. 68 Gemmill called
William Griffin and asked him to meet in New York on June 27 , 1973, at
the Marine Midland Bank. Since Griffin and Gemmill had not met,
Gemmill agreed to produce a copy of the list of the bills which Rebozo,
Wakefield, and Barker had prepared earlier as a form of
identification. 69
Griffin met with Gemmill and Glaeser at the Marine Midland Bank
on June 27, 1973. After Gemmill provided him with the receipt which
Rebozo had earlier prepared, Griffin turned the money over to them.
After a brief discussion, Griffin left. 70
After Griffin’s meeting at the Marine Midland Bank, he called
Rebozo to tell him the money had been returned. 71 Rebozo has testified
that shortly thereafter, Rebozo told the President that the Hughes
contribution had been returned and the President once again
assured Rebozo that that was the right thing to do. 72
IX. THE IRS INVESTIGATION OF REBOZO
The evidence set forth below indicates that the Internal Revenue
Service investigation of Rebozo :
— was postponed several times
— was handled through oral rather than the normal written reports
— 'included advance notice to the President and Rebozo
M 22 Hearings 10453-57. See also 21 Hearings 10061.
w 23 Hearings 11177-78. See also 20 Hearings 9407-10.
68 23 Hearings 11177—78.
m 22 Hearings 10456—57. See also 23 Hearings 11178.
70 22 Hearings 10457. See also 23 Hearings 11178. Gemmill has provided the committee
with copies of the envelopes which held the money.
71 22 Hearings 10458.
72 21 Hearings 10062.
1017
— did not inquire into the relevant periods given in testimony and
evidence available
— allowed Rebozo’s attorney, rather than the IRS, to obtain infor-
mation from third-party witnesses
— did not include additional interviews with Rebozo even after IRS
had learned Rebozo had altered his previous statements
■ — included notice to Rebozo that the IRS did not intend to pursue
any criminal investigation of the matter
— included notice by the IRS to Rebozo and his attorney that the
Special Prosecutor’s Office had sought and obtained disclosure of
evidence regarding Rebozo
— involved use of extra personnel at the request of the taxpayer
The Internal Revenue Service first learned of a relationship between
Charles G. Rebozo and the Hughes Tool Co. in December of 1971,
during the investigation of John H. Meier. Meier, an employee of Rob-
ert Maheu, had allegedly received millions of dollars from the fraudu-
lent sales of mining claims to Hughes. Because of Meier’s relationships
with a variety of political figures, including F. Donald Nixon and
Edward Nixon, IRS sensitive case reports were prepared on a monthly
basis relating information to alert IRS officials and the Secretary of
the Treasury of an IRS investigation that might touch upon promi-
nent and, therefore, newsworthy individuals. 73 Former Secretary of
the Treasury Shultz determined whether information from the sensi-
tive case reports should be brought to the President’s attention.
The December 1971. sensitive case report indicated that Mr. Rebozo
had instructed Meier to be unavailable for an IRS interview because it
was feared Meier might disclose his association with Donald Nixon in
connection with the sale of mining claims and rebates from the claims.
Former Commissioner of IRS Johnnie M. Walters stated to the com-
mittee that he advised Secretary of the Treasury, John Connally, on
March 3, 1972, of the allegations relating to Rebozo’s advice to Meier to
“make himself unavailable.” 74
In addition to the Meier investigation, the IRS was also conducting
an intensive investigation of the Hughes organization that was de-
scribed by former Commissioner Walters: “This Hughes project,
investigation, was a mammoth undertaking because the Hughes orga-
nization is so diverse and so widespread that we required a substantial
number of agents, special agents, and others to carry on the investiga-
tion. I forget, but I have a recollection that at one point we had ap-
proximately 50 people on this thing; and I could see it going on
forever.” 75
As part of the above investigation, special agents of the IRS inter-
viewed Danner on May 15, 1972, in the offices of the Hughes Tool Co.
in Houston, Texas. On that occasion, the IRS received testimony
under oath from Danner that he had, in fact, delivered two packages
containing a total of $100,000 in cash to Charles G. Rebozo. Examina-
tion by this committee of sensitive case reports provided by the IRS
reflects no mention of the information received concerning the receipt
by Rebozo of the $100,000 until an entry on April 26, 1973, which
™ Interview of George Shultz, Jan. 24, 1974, Shultz indicated In the Interview that
he felt the sensitive case reports were a good check system so that the IRS would be aware
that the handling of prominent individuals would be scrutinized by the public.
24 Hearings 11628.
75 24 Hearings 11631.
1018
referred to a telephonic contact made by the IRS with Rebozo. The
sensitive case reports do reflect, however, on a continuing basis, in-
formation relating to amounts paid to former chairman of the Dem-
ocratic National Committee, Larry O’Brien, from the Hughes Tool
Company, pursuant to a contract. Former Commissioner Walters re-
calls Mr. Rebozo’s name surfacing in the late spring or early summer of
1972 and a request by the IRS to interview both Rebozo and F. Donald
Nixon with regard to matters previously mentioned. However, Wal-
ters stated that he decided, as is reported more completely in this report
elsewhere, that the policy of the IRS should not be to interview sensi-
tive political figures during the campaign year of 1972. 76 It is also
pertinent to note, however, the IRS policy did not prohibit the con-
tinued investigation of Larry O’Brien after communications were
received from J ohn Ehrlichman. 77
Rebozo was finally contacted by IRS agents from the Las Vegas
oflice on April 26, 1973, and interviewed on May 10, 1973. After the
results of that interview were furnished to the Washington, D.C.,
National Headquarters, a decision was reached to conduct an investi-
gation and audit of Rebozo, but that the investigation would be con-
ducted by the Jacksonville, Fla., office. The District Director of the
Intelligence Division, Troy Register, assigned agent John Bartlett to
be in charge of the Intelligence Division (criminal fraud) side of
the investigation. Bartlett and agent Burt Webb, from the Audit Di-
vision, met with Rebozo’s attorney, Kenneth Gemmill, on July 10,
1973, and advised Gemmill that they were assigned to make an exami-
nation of returns of Rebozo for the years 1968 through 1973. 78 Mr.
Gemmill objected to any examination of 1968 or 1969 or 1973 rec-
ords, claiming that the statute of limitations had already run out on
1968 and 1969 and that 1973 records were not relevant- Agent Bartlett
responded by indicating that Rebozo had previously told the IRS
that he thought the money had been delivered in 1968 and 1969 and
that there was other information relating to money in 1968. 79 Despite
this initial position, the Internal Revenue Service ultimately agreed
not to require production of records relating to 1968, 1969, or 1973. In
addition, on that same date, Bartlett’s notes indicate that he advised
Gemmill that the IRS would not contact third-party witnesses, but
would allow Gemmill and Rebozo to obtain information needed by the
IRS from third parties. Had the IRS, in the spring of 1973, required
the production by Rebozo of the 1969 records, the agents would have
observed then that Rebozo had provided payments for the personal
expenses of President Nixon.
Bartlett and Webb again met with Rebozo on July 24, 1973, ap-
parently to discuss leaks of information Rebozo charged came from
the IRS. According to Bartlett’s notes, the IRS agents asked Rebozo,
for reasons not explained, whether he had been contacted by “Cox’s
commission” and he answered in the negative.
Agents Bartlett and Webb again met with Rebozo on August 17,
1973, at which time Rebozo advised them that the President was flying
in that night to see Rebozo and wanted to go out to California with
79 24 Hearings 11641-42.
77 This matter is explained more fully at p. 1025. infra.
78 See notes taken from interview and meeting as provided by IRS and as prepared by
agent Bartlett, in committee files.
79 See Bartlett notes. Ibid.
1019
him, but Eebozo did not think he would go because he wanted to stay
and finish up the IRS business. 80 Mr. Rebozo indicated to the IRS
agents that he would like to pay to have additional agents put on the
investigation in order that it would be finished more quickly. After
making that request the second time, Rebozo mentioned to the IRS
agents that the President had phoned him 15 minutes after his speech
on the previous Wednesday. Mr. Bartlett has advised this committee
that pursuant to Rebozo’s request, Mr. Bartlett discussed this issue
with his superiors and additional agents were added to the investi-
gation.
On October 10, 1973, IRS agents met with Attorney Gemmill at
the University Club in New York City and advised Gemmill that the
investigation had developed nothing new. Mr. Gemmill then requested
that the IRS furnish him with a copy of the interview previously
conducted by the IRS on May 10, 1973, with his client. Bartlett pro-
vided a copy of that interview to the taxpayer’s lawyer who made notes
of his client’s prior statements. During the October 10 meeting in New
York, agent Bartlett inquired of Mr. Gemmill as to whether Mr.
Rebozo had ever informed President Nixon of the receipt of the
$100,000. In response to that request, Mr. Gemmill phoned agent
Bartlett at 10 a.m. on October 12, 1973, and related to him that he had
talked to Rebozo who now indicated that he in fact had told Rose Mary
Woods that he had placed the $100,000 in the safe deposit box. Agent
Bartlett’s response was to ask Rebozo’s lawyer if Woods would be
available for an interview. Gemmill said he didn’t know but that he
would find out if they so desired. Bartlett indicated that he did not
need the information at that time. 81
Gemmill again telephonically contacted agent Bartlett on October
16, 1973, and talked between 9 :30 and 9 :32 a.m. At that time, Gemmill
advised Bartlett that after their conversation the prior week in New
York, Gemmill called and asked Rebozo whether he had discussed the
money with the President. Gemmill said Rebozo told him that he had
told the President in Key Biscayne between the election and when
the money was returned, which Rebozo believed was in the spring of
1973. Bartlett asked Gemmill when it was that Rebozo had advised
Miss Rose Mary Woods, and Gemmill said “shortly after receipt of the
money.” Bartlett then asked about access to Miss Woods and was told
that they probably could get a statement from her as to what she knew
about it. 82
Bartlett had another telephonic communication with Gemmill on
the following day, October 17, and Gemmill advised Bartlett that he
would get on the phone the next day with regard to the letter from
Rose Mary Woods. Bartlett advised Gemmill, “I told him that we had
nothing new basis at present — that I thought nothing serious would
develop but we had to wait to see what might come up in Watergate
or Cox before making a final decision.” 83 Bartlett has indicated to the
committee that he intended to mean by the quoted language that the
80 This information again is based on notes taken by the committee of Bartlett's memo-
randum of the interview of Rebozo of August 17, 1973, in committee files.
81 Information obtained from handwritten notes of agent John Bartlett provided by IRS.
82 Information taken from handwritten notes of agent John Bartlett, in committee files.
83 Information taken from handwritten notes of agent John Bartlett provided by the
IRS. Observations by investigators of the committee indicate that the above quoted state-
ment appeared to have other words which were erased and covered over by the quoted
language.
1020
IRS could not state they had cleared Rebozo while another investiga-
tive body had an ongoing investigation. Gemmill testified that he
had no recollection of any discussion of the Special Prosecutor at all
with agent Bartlett. 84
Agents Bartlett and Webb met with Rebozo at bis bank on October
18, 1973, and indicated that they had advised Gemmill about the results
of the investigation “and I [Bartlett] don’t anticipate at this time any
action by Intelligence, final decision still pending.” Bartlett has ex-
plained that that information was communicated to Rebozo so that he
would understand there would be no continuing criminal investigation
by IRS of the matter. Bartlett’s handwritten notes further indicate
that on that date he advised Rebozo that disclosure of information and
evidence obtained by the IRS had been granted to Special Prosecutor
Cox’s office. Agent Bartlett has indicated to the Select Committee that
he disclosed this information to warn the taxpayer under investigation
that anything he might say might be evidence against him in the grand
jury. Agent Bartlett conceded, however, that when he read the tax-
payer his Miranda warning rights in his earlier interview on July 10,
1973, the taxpayer was then advised the information he provided could
be used against him in a criminal proceeding. 85
Agent Bartlett’s notes also reflect that he had a prior telephonic com-
munication with Gemmill on October 18, between 9 :30 a.m. and 9 :38
a.m., and the notes include the words, “Call after meeting with Cox,
Fred Buzhardt, White House 486-1414” (sic.) and “1. 1 told Gemmill
about disclosure to Cox.” According to Bartlett, these notes indicate
that Gemmill was informed by Bartlett even before Mr. Rebozo that
Special Prosecutor Cox’s office had received a disclosure of IRS infor-
mation with regard to the receipt by Rebozo of $100,000. The notation,
with Buzhardt’s name on it, according to Bartlett, refers to the fact
that Gemmill was to contact Buzhardt to obtain a letter from Rose
Mary Woods, reflecting her information with regard to the receipt of
$100,000 by Rebozo.
While attorney Kenneth Gemmill could not recall discussions with
Bartlett with regard to Special Prosecutor Cox, he admitted to having
a conversation with White House counsel Fred Buzhardt but refused
to discuss the substance of it on the grounds that it was protected by
the attorney-client privilege. 86 White House counsel Fred Buzhardt
testified that he recalled having :
* * * received a request from Mr. Kenneth Gemmill to see
if I could get some answer's to some questions for an Internal
Revenue agent. I believe that pertains to this, from Miss
Rose Mary Woods. I think you submitted to me a list of
questions which I provided to Miss Woods. Miss Woods gave
me the answers. I drafted a letter for her to a Revenue agent
or somebody with the IRS and I believe it was Jacksonville,
Fla., but I do not recall for sure. That is the only thing I
recall doing with respect to this at all. 86a
^ nvwrvnytf iiiirr. „ , , ,,, ,
85 Information relating to meeting of October 18, 1973, comes from handwritten notes
of agent Bartlett, as provided by IRS.
88 24 Hearings 11215.
868 23 Hearings 10878.
1021
Fred Buzhardt further testified that he did not remember the ques-
tions that the IKS wanted answered, that he recalled “* * * the sub-
ject .was about whether Miss Woods had a conversation with Mr. Re-
bozo”, but he could not recall the subject matter of the alleged conver-
sation. 87 Buzhardt did not recall whether he saw Woods in person or
contacted her by telephone but he did recall :
I discussed the questions with her and I asked her what
the answers were and would she answer them for the IKS.
And she said, “Yes.” She gave the information and I prepared
the letter for her as I recall, or a draft, and sent it over to
her. And as I recall, she sent it back to me and I mailed it.
I think as I recall I sent her the draft and I sent an envelope
addressed to the IRS. 88
Buzhardt did not recall whether Woods answered the questions orally
or in writing and, also, did not recall that after the letter was pre-
pared, typed and signed, that he had taken it back from Woods, had
made some changes on it, had it retyped and re-signed by her. 89 Buz-
hardt did not recall whether between the time the letter was typed
and the time it was sent, he contacted any other individual with regard
to the contents of the letter but admitted, “it is possible.” 90 Buzhardt
could not recall how long it was between the time Gemmill requested
the letter and Buzhardt’s first contact with Woods with regard to the
letter. He did not recall whether any changes had been made “in the
substance, content or body of the letter” prior to the time it was sent
and when asked, “Did you furnish a copy of that letter to any other
individual?”, Buzhardt replied, “I do not know.” 91 Buzhardt, when
asked if he had made any changes on the letter that was to be signed
by Woods, answered :
Well, I don’t have a recollection of it, Mr. Lenzner. I am
sure I wouldn't have made changes unless there was some out-
side input because I didn’t know anything about the matter.
I had no idea what the answers to the questions were, so I
would have had to have some input from outside, if I made
changes. They had to come from Miss Woods. They couldn’t
have come from me because I had no earthly idea about the
matter one way or the other. 92
Buzhardt could not recall whether he ever asked Woods, the Presi-
dent’s personal secretary, if she had ever discussed the matter of the
$100,000 from Mr. Rebozo with President Nixon or anyone else at the
White House. 93 Woods testified concerning the letter that :
Mr. Buzhardt came in and said that the IRS is apparently
in there checking all or they’re going over Mr. Rebozo’s
files. He wanted— Mr. Buzhardt wanted to give them a
87 23 Hearings 10880.
88 23 Hearings 10881.
89 23 Hearings 10882.
00 Ibid.
91 23 Hearings 10884. See also 26 Hearings, exhibit 54 for a copy of the letter from Miss
Woods to agent Bartlett.
Buzhardt was also asked by Senator Weieker :
“So in October of 1973, Mr. Rebozo’s $100,000 contribution was not of particular
significance to the counsel of the President ; is that correct?”
and Mr. Buzhardt responded :
“Certainly not to me, no.”
23 Hearings 10885.
92 23 Hearings 10886.
03 23 Hearings 10887.
1022
letter on the Hughes loan, I mean the Hughes contribution
and he asked if I would be willing to sign a letter they could
give to the IRS and I said, “Yes, I would,” and I gave him
the best of my knowledge on it. He Avrote the letter and then,
as I say, it was typed twice because he just changed a couple
of words in the letter. There was no major change. I don’t even
remember whether he changed “to” or a “by” or what it was,
because he prepared the letter and Mrs. Acker typed it. 94
Woods testified that she did not know whether Gemmill had asked
for the letter. Miss Woods was sure, however, that Fred Buzhardt left
her office with the letter and then returned, after a period of time, with
some changes. 95 Woods did not recall Avhat changes were made in the
body of the letter.
In addition to the fact that Miss Woods’ letter was signed and sent
to the IRS on October 18, 1973, Gen. Alexander Haig, the Chief of
Staff of the White House and H. R. Haldeman’s successor, telephoni-
cally communicated to Attorney General Elliot Richardson on that
same date, a “re-expression of the President’s concern about the extent
to which Mr. Cox was getting into things that he thought were out-
side the charter.” Former Attorney General Richardson testified before
the U.S. Senate Judiciary Committee that Haig advised him of the
President’s concern and “he didn’t see what Mr. Cox’s charter had to
do Avith the activities of Mr. Rebozo, especially Avhen there had already
been an investigation of the Avhole matter by the Internal Revenue
Service.” 86 Richardson further testified that General Haig expressed
not only that “the investigation was outside of Mr. Cox’s charter,” but
also that “the Internal Revenue Service Avas giving Mr. Rebozo a clean
bill, that it Avas the most thorough investigation in years, and that
they are intimidated. This is no longer an acceptable basis for a Gov-
ernment to run. That was October 18. But there AA-as no request that
anything be done about Rebozo and I had no conversation about Rebozo
with Mr. Cox at all.” 96a When asked specifically about the October 18,
1973, telephone call with then- Attorney General Richardson, General
Haig answered as folloAvs :
Yes, I do and again in the context of an indication. At the
time Ave Avere very concerned about another matter with re-
spect to Mr. Cox and Mi 1 . Cox’s failure to giA'e us a response
and the whole subject to Mr. Cox’s frame of reference, activ-
ities and investigations came up.
As I recall Mr. Richardson mentioned to me something
about a Cox activity at that time that I kneAV nothing about
involving Abplanalp and his discussions Avith Mr. Cox about
that. Well I did not raise that, Elliot raised it, I raised this
strictly in the context of the problems we were haA 7 ing Avith
Mr. Cox on another issue, and what I Avould Avant to make
very, very clear is that the Rebozo matter had nothing to do
Avith the considerations and deliberations made Avith respect
to Mr. Cox in that Aveek of October. 97
04 22 Hearings 10202.
05 22 Hearings 10202-3.
08 Hearings before the TJ.S. Senate Judiciary Committee, Nov. 8, 1973, Elliot Richardson
witness, see pp. 386-87.
Ibid.
07 23 Hearings 11014
1023
General Haig was also asked if lie called Attorney General Eichard-
son at the instruction of the President on October 18, and he re-
sponded as follows :
No, it was not in that specific sense. And again you have to
put yourself, if you can, to portray the kind of dialog that
was going on during that week. * * * I was frequently in
the habit that week and at other times of having a discussion
with the President and picking up the phone and calling El-
liot Eichardson. On that occasion, I may have expressed this
as being of Presidential concern and I’m sure if I did that I
would have had reason to know that either because I knew
the President’s thinking or because he specifically told me
so. 98
General Haig further denied that the President ever expressed any
concern about Special Prosecutor Cox’s investigation of Eebozo and,
in fact, could not recollect any statement that the President made
in discussing the $100,000 furnished to Eebozo, except the President’s
concern about the way the investigations were being handled. In
indicating that the President had not expressed concern with regard
to the Special Prosecutor’s investigation of Eebozo, General Haig
did state, however :
The concerns I had about it were very limited. In the fall,
there was some concern about a number of areas that the Spe-
cial Prosecutor may or may not have been involved in, in the
context of his charter. Mr. Buzhardt, I know, has discussed
it with me and I know he discussed it with the Attorney Gen-
eral at that time, Elliot Eichardson. 99
General Haig was also asked the following :
Mr. Lexzxer. Do you recall representing to Mr. Eichardson
that the President was concerned that Mr. ( ox was getting into
an investigation of Mr. Eebozo ?
General Haig. I may have. I know our counsel was concerned
about it.
Mr. Lexzxer. Which counsel was that ?
General Haig. Mr. Buzhardt and I discussed it. We discussed
that and we discussed another area of activity that Mr. Cox was
into and I know there was some ongoing discussions with Mr.
Buzhardt and Mr. Eichardson. 1
Mr. Buzhardt, however, testified directly in conflict with the above
testimony :
Mr. Lexzner. Now on or about the same date as this letter [the
October 18 letter of Miss Woods], do you recall having any dis-
cussions with any other individual with regard to the initiation
by Special Prosecutor Cox of an investigation into the receipt by
Mr. Charles G. Eebozo of $100,000 from the Hughes Tool Co. ?
Mr. Bitzhardt. No.
Mr. Lexzxer. Have you, at any time, become aware of the fact,
aside from the news media, that Mr. Cox had initiated an in-
vestigation into this matter ?
88 23 Hearings 11015 .
89 23 Hearings 11013 .
1 Ibid.
1024
Mr. Buzhardt. I may have been. I don’t recall it.
Mr. Lenzner. Do you have any recollection of ever discussing
that issue, the issue of the Cox investigation of the Rebozo receipt
of $100,000, with General Haig ?
Mr. Buzhardt. No, I don’t recall it . 1
Mr. Buzhardt further testified that he did not recall whether he was
aware that General Haig had made the October 18 call to Attorney
General Richardson at the time it was placed.
Gemmill also testified that Bartlett made an agreement with him
that when he received the results of the Federal Reserve Bank’s
search of the dates of the currency returned bv Rebozo to Hughes, he
would furnish that information to Gemmill. 2 3 4 In addition, agent Bart-
lett’s handwritten notes of November 25, 1973 reflecting a telephonic
contact with Gemmill indicate “have we heard from the Federal
Reserve concerning the money — answered in the negative.” * Gemmill
also asked Bartlett if IRS had any evidence of funds going to a trust
account of the President, and Bartlett told Gemmill that they had
not.
Following Gemmill’s testimony on May 29, 1974, his counsel
furnished additional information Gemmill received from General
Haig to wit :
Mr. Gemmill now recalls two additional conversations with
General Haig concerning the $100,000 contribution. One
occurred a few days before Mr. Gemmill left for China and
the other occurred possibly 2 months earlier. To the best of
Mr. Gemmill’s recollection. General Haig in both conversa-
tions indicated that the Federal Reserve Bank report was on
the way and “there may be a problem.” On both occasions,
Mr. Gemmill recalls that he replied that the revenue agents
had agreed to give Mr. Gemmill a copy of the Federal Reserve
Bank report and that he would wait and see what the report
said. 5
In addition to agreeing to provide the taxpayer not only with a
copy of his interview but with a copy of the results of the Federal
Reserve Bank report, the IRS apparently obtained access to only a
limited number of cashier’s checks purchased by Mr. Rebozo despite
the fact that a considerable number of cashier’s checks were purchased
by the taxpayer under the names of Charles Gregory and Anita
Reynolds. The IRS further agreed not to photocopy any of the cashier’s
checks to which they had access and did not obtain information from
the checks themselves regarding who received the proceeds of such
checks for the purpose for which the checks were issued.
General Haig testified that he discussed the IRS investigation of
the Hughes contribution with President Nixon several times: “I
would say there were several brief discussions when it came to my
attention — to my knowledge. Then there Avas a prolonged period when
it never came up at all. Then I may have discussed it once or twice when
2 23 Hearings 10888.
3 24 Hearings 11219.
4 This information was obtained from handwritten notes provided by the IRS.
5 Letter of June 6, 19T4 to Terry Lenzner from Matthew ,T. Broderick, attorney for Mr.
Gemmill,
1025
the investigation was nearing a conclusion.” 6 Haig also testified that he
was present at discussions in Key Biscayne between the President and
Mr. Rebozo regarding the investigation of Mr. Rebozo. On one occa-
sion Haig said the President advised him that Rebozo had been before
the Select Committee for testimony. 7 General Haig further testified
that on one occasion the President advised him of information the
President received from Mr. Rebozo : “I think he probably said that
Mr. Rebozo did not use the money because he was afraid it would be
troublesome and he put it in the safe deposit box and left it there. I
know more recently the President expressed to me his absolute convic-
tion that none of that money was given to Miss Woods or to his family,
his brothers.” 8
Finally, Secretary Shultz stated to the committee that the only per-
son he discussed the Rebozo tax audit with was General Haig and this
occurred in late 1973. 9
IRS Audit of Larry O’Brien
It was during the course of the IRS investigation, of the Hughes
Tool Co., that special agents of the IRS, in a sensitive case report,
stated that their investigation had disclosed that the Hughes Tool Co.
made substantial payments to Lawrence F. O’Brien and Associates
during 1970. This same sensitive case report also referred to possible
improprieties by Rebozo, Don Nixon, John Meier, and others. Be-
cause some of the names mentioned were politically prominent, this
information was summarized in a sensitive case report brought to the
Secretary of Treasury’s attention. 10 Roger Barth, who was. assistant
to the Commissioner of the IRS, testified that in May 1972, he received
a sensitive case report which arose out of the Hughes Tool Co.
investigation.
* * * Now, when I received this report, I, of course, went
through the normal procedure of taking it to Secretary
Shultz, and either he or I transmitted a copy of the sensitive
case report of the Hughes project to John Ehrlichman at
the White House, because of the fact that there were allega-
tions or representations in the report of possible wrongdoing
by Mr. Rebozo and Mr. Nixon, the President’s brother or
brothers * * *.
Some time thereafter, not very long thereafter, I was either
called on the phone or went over — I can’t remember which —
to Mr. Ehrlichman’s office, and I think I went over there, as a
matter of fact * * * and he asked that he be kept advised of
the development of this Hughes project as it related to Mr.
Rebozo and the Nixon brother or brothers. And in the con-
versation about that, he raised the question of whether, you
6 23 Hearings 11029.
7 Ibid.
8 23 Hearings 11024,
0 Interview with former Treasury Secretary, George Shultz, Jan. 24, 1974. The Rebozo
investigation was originally assigned in May 1973 after it had been determined that Mr.
Rebozo had retained the $100,000 received from Howard Hughes.
As a result of an IRS review of the Rebozo investigation, it was determined that the
scope and nature of the case required that the national office coordinate the investigation.
In December 1973, the national office assigned one of its top investigators. Special Agent
Albert G. Keeney, to supervise and direct the overall investigation. Since that time the
investigation has been pursued effectively and vigorously.
10 Sensitive case report — IRS — chronology, Apr. 26, 1972. pp. 1-5.
1026
know, what would be the tax treatment or the implication of
the payments to Larry O’Brien. If this were a political con-
tribution by the Hughes Tool Co., it could conceivably be a
violation of the Corrupt Practices Act, and if it were deducted
by the corporation, it could be a violation of the tax laws. On
the other hand, if it were compensation for consulting services
for Mr. O’Brien or his firm, then he raised the question of
would this be reported by Mr. O’Brien.
I thought this was a reasonable question that he asked and
I told him I would check it out, but I did not want to make any
contact with our field personnel through normal channels
because I did not want to give the impression I was, on
behalf of the Commissioner, trying to instigate any audit of
Mr. O’Brien. So what I did was go to the Assistant Commis-
sioner of Inspection, Frank Geibel, and asked for Lawrence
O’Brien's tax returns * * * I asked that they get them in a
way that the agents working on the case in the field wouldn’t
know that I requested them. And they did this, and what I
did, I just looked at the tax returns of Mr. O’Brien and his
consulting firm and made sure that there was enough gross
income reported for those years, to cover the amount re-
ported. 11
Ehrlichman has testified that he received sensitive case reports be-
ginning in 1969 when he was counsel to the President and continuing
throughout his tenure at the White House. Ehrlichman stated that the
President and the Secretary of the Treasury had worked out the ar-
rangement whereby sensitive case reports would be transmitted to
the White House through Ehrlichman. 12 Johnnie Walters, who was
Commissioner of the IRS from August 1971 through May 1973, has
testified that it would be quite proper for the Secretary of the Treas-
ury to alert the White House to sensitive case reports. Walters, how-
ever, has also testified that he had no knowledge that Barth was pro-
viding copies of sensitive case reports to Ehrlichman. Walters stated
that, “It would have been out of the routine, and I would worry about
it.” 13
Ehrlichman testified that he received the sensitive case report from
Barth, and that after receiving it called Shultz to find out what the
status of the O’Brien audit was. Shultz, at this time, had only been
Secretary of the Treasury for a few weeks and was not even aware
that O’Brien was being audited. Shultz told Ehrlichman he would
get this information and report back to him. 14
After his conversation with Ehrlichman, Shultz called Walters
to get the status of the O’Brien audit. Walters has testified that :
* * * Secretary Shultz stated to me that the White House
had information that indicated that Mr. O’Brien may have
received large amounts of income which possibly might not
have been reported properly. The Secretary asked me if I
could check, and I said I would check. I then asked the Assist-
ant Commissioner of Compliance, Mr. Hanlon, if he would de-
11 23 Hearings 11222.
31 Ehrlichman interview, Jan. 10, 1974, pp. 1-2,
13 24 Hearings 11628.
14 Shultz interview Jan. 24, 1974, p. 2.
1027
termine whether Mr. O’Brien had filed returns, and the status
of those returns. A few days later, Mr. Hanlon reported orally
to me that IBS had checked, that Mr. O’Brien had filed re-
turns ; that those returns reflected large amounts of income ;
that the returns had been examined ; that a small, relatively
small deficiency was indicated in one which Mr. O’Brien had
paid; and that the audit and examinations were closed.
Now, I reported this to the Secretary at some point and
told him just that, which meant that there was nothing else;
that IRS has performed its function and responsibility * * *.
Some time later, the Secretary indicated that that had not
completely satisfied Mr. Ehrlichman. and wasn’t there any-
thing else that could and should be done ; and of course, by this
time, IBS had already concluded that it should interview
Mr. O’Brien in connection with these payments from Hughes.
I told the Secretary * * * that we could interview Mr.
O’Brien and just be sure that the amounts reflected in the
return covered the particular amounts from the Hughes or-
ganization * * *. 15
Walters has stated that at a later date Shultz confirmed to him that
it was Ehrlichman who told Shultz about the money O’Brien received
from Hughes. 16
Walters testified that in late 1971 or early 1972, the top manage-
ment team of IRS discussed the approaching 1972 Presidential elec-
tions. The IBS deliberately concluded that anything that was polit-
ically sensitive should be postponed until after the election. Walters
said they did not want to be involved in politics on either side and so
wherever possible, politically sensitive interviews were to be post-
poned until after the election. Because of this policy, the IRS did not
interview Rebozo or Don Nixon until 6 months after the election. The
IRS, however, did succumb to pressures from the administration and
interviewed O’Brien before the 1972 election. Walters further testi-
fied that :
* * * With that policy in mind, it’s obvious that any inter-
view of Larry O’Brien would have been postponed until after
the election. So, I think IRS would have not have conducted
that interview until after the election had it not been for the
generation of pressure from the White House, Ehrlich-
man; * * *. 17
In the meantime, both Barth and Shultz had kept Ehrlichman ap-
prised of the status of O’Brien’s audit. Shultz stated that there had
been an unspoken feeling that the IRS tended to be rather easy on
Democrats while they were particularly hard on Republicans. Ehrlich-
man had especially expressed these kinds of feelings to Shultz. It was
Shultz’ objective, therefore, to be sure that a proper audit was con-
ducted on O’Brien. From time to time, Shultz called the IRS to see
how the proceedings were going and he would then call Ehrlichman
to report on the status on the O’Brien audit. 18 Barth has testified
that he advised Ehrlichman that after Barth checked O’Brien’s tax
15 24 Hearings 11039.
1a 24 Hearings 11640.
17 24 Hearings 11642.
18 Shultz Interview, Jan. 24, 1974. p. 3.
1028
returns, there appeared to be enough gross income to cover the amounts
that Hughes reported he had paid O’Brien. According to Barth, this
was the first and only time that he had ever obtained an individual’s
tax returns to verify information he obtained through a sensitive
case report. Barth testified that Ehrlichman knew he was going to
obtain O’Brien’s tax returns and, in fact, encouraged him to do so. 19
Ehrlichman testified that there were good political reasons to go
after O’Brien since O’Brien was the head of the Democratic party.
After Ehrlichman saw O’Brien’s name in the sensitive case report, he
said he brought this information to President Nixon’s attention. The
President was quite interested in the audit of O’Brien and was espe-
cially interested in the fact that O’Brien was on retainer to the
Hughes organization, according to Ehrlichman. Ehrlichman, however,
did not recall if the President made any specific requests for Ehrlich-
man to follow up on this matter. 20
Haldeman has testified that the information coming from the
Hughes tax audit concerning Larry O’Brien may have revived the
"White House interest in O’Brien. Haldeman further stated that from
the administration’s perspective, Larry O’Brien was the only effective
Democratic politician in the country and therefore, there was some
interest in attacking O’Brien to lessen his effectiveness from a political
standpoint, 21 Ehrlichman has testified that Haldeman filled in many
of the informational gaps that were left from the sensitive case report
concerning O’Brien. For example, Ehrlichman learned from Halde-
man that the amount of the retainer O’Brien was receiving from
Hughes was quite significant, and recalls that both were impressed by
the possibility of embarrassing O’Brien because of a possible overlap
of his retainer with Hughes and his tenure as chairman of the Demo-
cratic National Committee. 22
On August 17, 1072, Larry O’Brien was interviewed by the IBS.
A written report of this interview was sent to Walters who in turn
transmitted the report to Secretary Shultz. By this time, Walters
felt that the IBS’ interest in O’Brien should be concluded because
the taxpayer had filed his returns, reported his income, and paid his
taxes. Walters said he had insisted to Shultz that the IBS had con-
ducted an audit and the case was closed. Walters added that “it ap-
peared that [Shultz] was being pressed * * *” 23
On August 29, 1972, Shultz told Walters that he wanted to meet
with both Walters and Barth to discuss the O’Brien audit, Walters
testified that both he and Shultz thought they were being “back-
doored” in some fashion and that in this situation it would be advis-
able for Barth to be apprised of the specifics concerning the O’Brien
matter. During this meeting with Shultz and Barth, Walters explained
to Barth that information had come to the IBS from the White
House concerning large amounts of money O’Brien made that were
possibly not reported. Walters further explained to Barth that the
IBS had checked O’Brien’s return and that it appeared that every-
thing was proper and the examination was closed. 24 Barth testified
39 23 Hearings 11226.
20 Ehrlichman interview, Jan. 10. 1974, p. 3.
21 Haldeman interview, Nov. 9, 1973, p. 4.
22 Ehrlichman interview, Jan. 10, 1974, p. 2.
23 24 Hearings 11639.
24 24 Hearings 11638-41.
1029
that he said that he had read the report on the matter and he felt it
was a thorough job.
Shultz then called Ehrlichman to give him a final report on the
O’Brien audit. Both Walters and Barth were on telephone extensions
during this joint telephone call. Shultz and Walters reported to Ehr-
lichman that the audit report on O’Brien was completed and that
everything was in order. Ehrlichman asked Barth if he had read the
report and that if everything appropriate had been done on this audit.
Barth testified he told Ehrlichman that it looked like an appropriate
audit and there was nothing worth pursuing any further. Barth recalls
that Ehrlichman seemed to take his word for it and that the only
reaction Ehrlichman seemed to have was that he was annoyed that it
had taken so long for this report to be prepared. 25
Walters testified that toward the end of the conversation, Ehrlich-
man expressed very strong feelings to Walters concerning the manner
in which the O’Brien audit was conducted. Walters testified that as
this conversation became more offensive to him personally, he hung
up his extension. 26 Shultz recalls that during this conversation, Ehr-
lichman told Walters that Walters would not go after prominent
Democrats even if the facts were there. According to Shultz, this was
the only challenge to the thoroughness of the O’Brien audit that he
could recall. 27
Ehrlichman stated that the purpose of this joint telephone call was
to report to him that the audit on O’Brien had been completed and
that it had disclosed no improprieties or delinquencies. Ehrlichman
testified that :
My concern was throughout, that the IRS down in the
woodwork was delaying the audit until after the election and
that seemed to be the case, that there was a stall 0 n * * * 28
Ehrlichman also testified that “I wanted them to turn up some-
thing and send [O’Brien] to jail before the election and unfortunately
it didn’t materialize.” 28a During this joint telephone conversation Ehr-
lichman said he had his first opportunity to articulate to Walters
what his opinion was concerning the job Walters did on the O’Brien
audit.
* * * it was my first crack at [Walters]. George wouldn’t
let me at him. George wanted to stand between me and his
Commissioner and this was the first time I had a chance to tell
the Commissioner what a crappy job he had done. * * * 29
Ehrlichman did accept the Commissioner’s view that the O’Brien
audit was closed. He says he did not suggest that they reopen the audit
on O’Brien at any time because as far as he was concerned, the matter
was closed. 30 Barth, however, has testified that shortly after the August
29, 1972 joint telephone conversation with Ehrlichman, Ehrlichman
called him a few hours later. Barth recalls that Ehrlichman just
wanted to check to make sure that Barth honestly felt that the IRS
audit of O’Brien was conducted properly. Barth told Ehrlichman that
25 23 Hearings 11224.
2a 24 Hearings 11645.
27 Shultz interview, Jan. 24, 1974, p. 3.
29 21 Hearings 9683.
28 a 21 Hearings 9684.
22 Ibid.
30 Ibid.
1030
he was satisfied with the audit and according to Barth, Ehrlichman
thanked him for his judgment on the matter and that was the end of
the conversation. 31
On September 15, 1972, however, John Dean and H. R. Haldeman
met with President Nixon and, according to evidence received by the
committee, discussed the IRS investigation of Larry O’Brien. The de-
tails of this discussion, however, were not provided to the committee
by the White House. In addition, this particular conversation was
deleted from the White House tapes provided to the Special Prose-
cutor and the House Judiciary Committee as well as the transcripts
released to the public. 32
X. THE ISSUE OF USE OF THE MONEY
A. Background
As discussed in section IY above, in February 1969, Charles G.
Rebozo was asked by the President to contact J. Paul Getty “regarding
major contributions.” 33 Evidence obtained by the Senate Select Com-
mittee indicates that the President, Rebozo, Haldeman, and Ehrlich-
man sought to establish a fund to be controlled by the White House staff
rather than by the Republican National Committee. 34 Evidence ob-
tained by the committee indicates that Rebozo controlled funds during
1969 which he used for “administration-connected costs.” 35
The committee has ascertained that pursuant to communications
with John Ehrlichman, Rebozo, between April and July 1969, trans-
mitted $1,416.18 from his fund to Kalmbach for payments to Caulfield
and Ulasewicz. These funds originally derived from 1968 campaign
contributions in the Florida Nixon for President committee account. 36
Rebozo has also testified that he received $150,100 in cash contributions
from Howard Hughes and A. D. Davis. 37 In the case of the Hughes
funds, the committee has received evidence and testimony indicating
that those funds were never transferred to the appropriate campaign
officials or committees. 38
According to CRP’s records, the funds contributed by A. D. Davis
were never received by the Committee To Re-Elect the President on
whose behalf Mr. Rebozo accepted them. 39
Herbert Kalmbach has testified that on April 30, 1973, Rebozo told
him that Rebozo had spent some of the $100,000 received from Hughes
on F. Donald Nixon, Edward Nixon, Rose Mary Woods, and other
individuals. 40
In an effort to confirm or deny Kalmbach ’s testimony, the committee
sought, through a series of subpenas, to Obtain financial records from
Rebozo and from his Key Biscayne Bank & Trust Co. Rebozo refused
32 See Thompson affidavit and “Memorandum of Substance of Dean s Calls and Meetings
With the President.” 4 Hearings 1794-1800.
33 See 26 Hearings, exhibit 15 for memo from Haldeman to Ehrlichman of Feb. 17, 1969 *
see also interview of Edward L. Morgan.
3 * Ibid.
35 26 Hearings , exhibit 16.
36 23 Hearings 10857.
37 21 Hearings 10117.
38 21 Hearings 9970. ^
39 See A. D. Davis executive session, 22 Hearings 10562. See LaRue executive session,
2.3 Hearings 11152. See also interviews with Paul Barrick, Fred LaRue, and memo of con-
versation with Robert Barker, attorney for Maurice Stans.
40 21 Hearings 10189.
1031
to produce all documents requested, thus frustrating the committee’s
investigation work and preventing it from obtaining necessary and
relevant documents. 41
The committee, therefore, found it necessary to subpena the docu-
ments and records of third parties. In order to determine if Rebozo
has made expenditures with hidden funds, the committee subpenaed
a few typical Key Biscayne contractors and vendors who were likely
to have served either Rebozo or the President during the period in
question. 42 Time did not permit an exhaustive inquiry.
This limited survey of contractors and vendors proved fruitful since
it revealed that Rebozo was using four trust accounts in his attorney’s
name through which his funds moved.
Three of these accounts are at Rebozo’s bank and Rebozo again re-
fused to produce lawfully subpenaed records relating to said trust
accounts. 43 Nevertheless, based on records provided by those few
vendors and contractors contacted and the limited documents and
records available to the committee, a detailed analysis was prepared.
B. Summary or Facts
The committee has received testimony and evidence that :
1. Rebozo ordered and paid for expenses totaling over $50,000
for President Nixon during the periods following both the 1968
and 1972 Presidential elections.
2. These payments were made by Rebozo despite the fact that
all other expenses of President Nixon were paid for by check
issued against Ids bank accounts or by debit memos drawn
against his bank accounts. Rebozo has the authority to draw
against the President’s account at the Key Biscayne Bank by
issuing debit memos for cashiers’ checks and bank transfers.
Although he has regularly used this procedure, he did not do so
for these transactions.
3. Substantial payments furnished by Rebozo on behalf of Presi-
dent Nixon were made in cash and, when Rebozo paid the same
companies for work done for his own benefit, he paid by check.
4. Expenses paid for by Rebozo included $45,621.15 for improve-
ments and furnishings at the President’s 500 and 516 Bay Lane
properties in Key Biscayne, Fla. The records reflecting expendi-
tures for these improvements were withheld from the firm of
Coopers & Lybrand and do not appear in their August 1973 exam-
ination of the President’s assets and liabilities, which covered
the period from January 1, 1969, to May 31, 1973.
5. Currency totaling at least $23,500 was deposited by Rebozo in
trust accounts not in his name to pay for the President’s expenses,
thus concealing the true source of these payments. All currency
so deposit ed was in $100 bills.
6. In addition to Rebozo’s role as the President’s personal
agent regarding the Key Biscayne property, 44 President Nixon
41 26 Hearings, exhibits 55 and 56.
42 The committee staff pursued this route after learning Rebozo was reimbursed for
expenditures on one occasion by the President.
43 Rebozo, individually and as president of the Key Biscayne Bank, was subpenaed to
produce certain records reflecting payments he made on behalf of the President and others.
Rebozo never complied with this subpena. See 26 Hearings, exhibits 55 and 56.
44 See sec. IV above.
1032
was aware of and concurred in at least some of these improve-
ments to his properties.
7., Substantial funds used to pay for expenses and gifts of Presi-
dent Nixon were transmitted to trust accounts in the name of
Rebozo’s attorney, a process which concealed the source of the
funds.
8. The sum of $4,562, which originated as campaign contribu-
tions, was passed by Mr. Rebozo through three bank accounts
and a cashier’s check, none in his name, to purchase jewelry given
by the President as a gift to his wife.
9. Throughout the period during which these expenditures
were made on the President’s behalf, Rebozo had access to sub-
stantial amounts of cash retained from campaign contributions
received.
10. The Coopers & Lybrand examination of the President’s
assets and liabilities as of May 31, 1973, reflects no liabilities pay-
able to Rebozo.
11. Rebozo did not file a U.S. gift tax return 45 for calendar years
1969, 1970, 1971, or 1972 as required by the Internal Revenue Code,
section 6019(a).
12. The President reimbursed Rebozo in the amount of $13,-
642.52 for a portion of the cost of construction of a pool on the
President’s property. This reimbursement occurred after Rebozo
returned funds to representatives of Hughes and despite the
fact that Coopers & Lybrand report reflected no liability payable
to Rebozo.
13. During November 1972, Rebozo expended at least $20,000
in currency on the President’s behalf.
14. According to Rebozo’s testimony and financial records,
the only apparent sources available to Rebozo for a substantial
portion of the $20,000 in currency used in November 1972 were
campaign contributions.
C. The Coopers & Lybrand Report
On August 20, 1973, the accounting firm of Coopers & Lybrand
issued a report on the President’s assets and liabilities. They reported
in a letter to the President on improvements and furnishings to his
properties at 500 and 516 Bay Lane that: “Through May 31, 1973,
you paid from your personal funds for improvements to these prop-
erties in the amounts of $37,942 with respect to 500 Bay Lane, and
$38,479 with respect to 516 Bay Lane as follows : 46
Improve- Furnish-
"Property ments ings Total
500 Bay Lane $24,734 $13,208 $37,942
516 Bay Lane *29,687 8,792 38,479
Total 54,421 22,000 *76,421
♦"Included in the improvements for 516 Bay Lane were loan charges of $368.50 on the property, therefore the total
actual costs per the President's records are $76,053."
45 See Internal Revenue Service form 709; these returns must be filed on or before the
15th day of the 2d month following; the close of the calendar quarter during which the
gift or gifts were made (IRC sec. 6075(b)).
46 Coopers & Lybrand letter to President Nixon, Aug. 20, 1973.
1033
The details of these expenditures are as follows :
IMPROVEMENT COSTS PAID BY PRESIDENT NIXON ON HIS KEY BISCAYNE PROPERTIES «
Contractor and service
Date paid
Bay Lane
Bay Lane
Total
Babcock Co. Builders, Inc
Apr. 14, 1969
Remove existing bedroom and construct Exec-
utive office
May 16, 1969
$14, 765.00
799. 49
11,307.12
2, 132. 60
314.80
$14, 765. 00
3, 224. 19
799. 49
11,307.12
6,299.44
15,210.38
2,132. 60
<» 314. 80
Alterations and repairs. __
Do
Alterations— Executive office
Alterations and repairs.
Caldwell Scott Construction Co.: Remodeling
Little, Lair & Pilkington
Metals Tech. Inc.: Panels.
. May 2, 1969 to
May 13, 1969...
. Apr. 24, 1969 and
May 2, 1969... .
. Aug. 11, 1969
. Nov. 12, 1969 ....
. July 28, 1969 and
Aug. 26, 1969...
. Apr. 14, 1969 and
June 17, 1969
Oct. 1, 1969
$3, 224. 19 .
6,299.44 .
15,210.38 .
Rablen-Shelton: Furnishings
July 31, 1969
10, 000.00
10,000. 00
48 12, 000. 00
Oct. 31, 1970
3, 208. 23
8,791.77
Total
Loan charges per records.
37,942. 24
38,110. 78
368. 50
Total 37,942.24
76, 053. 02
368. 50
38, 479. 28 76, 421. 52
“ These figures are from the President's accounting records for the period Jan. 1, 1969, through May 31, 1973, as main-
tained by Arthur Blech.
41 Payments made by check drawn against President Nixon’s account; the remaining payments to supplies was done by
cashiers check or Key Biscayne bank check.
The above expenditures totaling $76,421.52 were made from the
President’s personal funds, usually by debit memo against his bank
accounts at the Key Biscayne Bank & Trust Co., for cashier’s checks
or bank checks issued to the suppliers. 50
D. Expenditures by Kebozo Concealed From Accountants
The Select Committee’s investigation, however, reflects actual ex-
penditures for the same period on the President’s properties as follows :
Property Improvements Furnishings Total
500 Bay La ne $54, 364 $14, 939 $69, 303
516 Bay Lane.. 42,441 9,930 52,371
Total 96,805 24,869 121,674
As noted in the above schedules, costs for improvements and furnish-
ings reported by Coopers & Lybrand amounted to $76,053 (plus $368.50
in loan charges) whereas actual expenditures for improvements and
furnishings amounted to at least $121,674. Expenditures for improve-
ments and furnishings amounting to $45,621 were not included in the
President’s records when the records were presented to the accounting
firm. These expenditures made for improvements on and furnishings
of the President’s properties at 500 Bay Lane and 516 Bay Lane from
1969 to 1972 include the following : 61
50 Information obtained from Interviews with Kalmbaeh, DeMarco, Marilyn Parent, Ann
Harvey, and Arthur Blech.
51 These expenditures were obtained by contacting vendors which provided services to the
Key Biscayne properties.
1034
Conversion of garage into living quarters $11, 978. 84
Swimming pool and accessories 18, 435. 18
Extension of roof 6, 508. 11
Fireplace 3, 586. 00
Architectural model of 500 Bay Lane 395. 65
Putting green 243. 57
Billiard table 1, 138. 80
Architect fees and tile repairs 3, 335. 00
Total 45,621.15
These improvements were directed and paid for by Charles G.
Rebozo, with funds derived from the following sources :
1. By personal checks of Charles 6. Rebozo (Account No. 1-34) $13, 361. 21
2. By checks from trust accounts 23, 213. 01
3. By currency 5’ 065. 28
4. By form unknown — believed to be currency 3, 981. 65
Total 45,621.15
Funds deposited in the above mentioned trust accounts included
currency amounting to $23,500. Thomas Wakefield stated the currency
deposited in the trust account consisted of $100 bills. 62 Accordingly, the
total currency which may have been used to finance these expenditures
amounted to $32,259.94.
E. The Improvements on the President’s Key Bisgatne Properties
In December 1968, President Nixon, Mrs. Nixon, Mr. and Mrs.
David Eisenhower, and Mr. Rebozo met with Mr. Jaime Borrelli, of
the architectural firm of Bouterse, Borrelli & Albaisa (BBA), to dis-
cuss possible alterations to the 500 Bay Lane property. 53 Plans were
thereafter prepared and revisions made from time to time. On most
occasions, Mr. Rebozo would take the plans to Washington, D.C., for
review by the President and his family. 54
Documents in the files of the committee reflect that Mr. Rebozo was
consulted and made decisions on every aspect of modification and alter-
ations to 500 Bay Lane. 55
1. ARCHITECT FEES AND TILE REPAIRS $3,335
The architectural firm of Bouterse, Borrelli & Albaisa was formed
in the latter part of 1968. Donald A. Bouterse is a nephew of Rebozo.
Rebozo always paid this firm for improvements on the President’s
properties with currency. According to the architects’ records fur-
nished to the staff the following currency payments were made by Mr.
Rebozo : 56
62 Interview of Thomas H. Wakefield, June 24, 1974, p. 1.
53 Interview of Jaime Borrelli ; June 1, 1974 ; p. 1.
M IMd.
55 26 Hearings , exhibit 57, contains a number of documents reflecting the firm BBA’s work
done at the order of Mr. Rebozo for President Nixon’s residence. For example, the bill sent to
Rebozo for payment of Feb. 3, 1969, notes “additions and alterations, 500 Bay Lane, Key
Biscayne COM. No. 68-120“ and estimates the cost of construction at $8,000. A standard
form agreement between owner and contractor dated Feb. 18, 1969, indicates an agreement
between Mr. Rebozo as agent for the owner of 500 Bay Lane and the Caldwell Scott Engi-
neering Construction Co. which was contracted to do certain work on the President’s home.
50 26 Hearings, exhibits 58—60, 65. Specifically, Mr. Rebozo ordered certain work to be
done in 1969 by Borrelli’s firm which was for “additions and alterations, 500 Bay Lane,
Key Biscayne” which work he assumed the obligation for payment. In a letter to Mr.
Borrelli on July 7, 1969, Rebozo makes reference to a dispute with regard to payment for a
subcontractor, Caldw T ell-Scott. and notes “as you know, the original statement was for-
warded more than 2 months after I had requested it of Mr. Scott. This, of course, made pay-
ment thereof impossible for me.” See 26 Hearings , exhibit 60.
1035
Date : Amount
Feb. 10, 1969 $400
Mar. 7, 1969 400
Mar. 19, 1969 300
Apr. 2, 1969 581
Total 1, 681
Rebozo also paid $1,654 in cash for the work done by Designers
Flooring Co. The payments were made as follows : 57
Date : Amount
Apr. 11, 1969 $754
May 26, 1969 300
July 22, 1969 600
Total 1 , 654
The President’s records through May 31, 1973 and Rebozo’s records
do not reflect any reimbursement to Rebozo by President Nixon. It is
also of interest that when Rebozo made a $500 payment to Donald
Bouterse on January 6, 1969, and $273 on March 6, 1969, to Designers
Flooring Co. in connection w T ith work on his own property at 490 Bay
Lane, payment was made by personal check. 58
2. ARCHITECTURAL MODEL OF 500 BAY LANE $39 5.65
Bouterse, Borrelli & Albaisa, architects, received two payments from
Mr. Rebozo amounting to $395.65 for a model of 500 Bay Lane in con-
nection with remodeling work on President Nixon’s properties. The
payments were made by Mr. Rebozo as follows : 59
Date : Amount
Jan. 18, 1969 $295. 65
Mar. 14, 1969 100. 00
Total 395.65
Although the BBA representative contacted was unable to state
whether payment was made in currency, no charge was found on Mr.
Rebozo’s bank statement indicating that a check from Mr. Rebozo had
been issued in payment.
3. CONVERSION OF GARAGE INTO LIVING QUARTERS 5 1 6 BAY LANE
$11,978.84
Robert Little, former senior partner in the architectural firm of
Little, Lair & Pilkington, stated that he met with President Richard
Nixon and Charles G. Rebozo in 1969 at the Key Biscayne compound
to discuss remodeling of the President’s property at 516 Bay Lane. This
discussion initially entailed plans to be drawn by Little’s firm in the
construction of a bedroom and general remodeling. Later, Little was
directed by Mr. Rebozo to revise these plans since Mrs. Nixon wanted
the garage on the 516 Bay Lane property converted into living room,
bedroom and bath. 60
57 26 Hearings , exhibits 61-63.
58 26 Hearings , exhibit 64.
59 26 Hearings, exhibit 65.
60 Interview of Robert Little, June 1, 1974, p. 1.
1036
The fees paid to Little, Lair & Pilkington were made by check from
the President’s bank account and thus are included in the records fur-
nished to the Coopers & Lybrand accounting firm.
The conversion itself was described in documents furnished the
committee as “516 Bay Lane, convert two-car garage into efficiency with
living room, bedroom and bath — starting date, May 25, 1969.” The
work was done by Babcock Company Builders, Inc., and payment of
$11,978.84 was made on August 6, 1969 by Mr. Bebozo’s personal check
No. 4169 drawn on his account No. 1-0034 in the Key Biscayne Bank.
Although Mr. Rebozo purported to make all 1969 cancelled checks
available to the committee staff, this check for $11,978.84 was not
included. 61
The financial records of Mr. Rebozo and the President show no reim-
bursement of this expenditure to Mr. Rebozo by President Nixon
through May 31, 1973.
4. PUTTING GREEN AT 516 BAY LANE $243.57
The Bartlett Construction Co. installed an “Arnold Palmer Putting
Green” at President Nixon’s 516 Bay Lane property. The bill sub-
mitted amounting to $243.57 was paid by Mr. Rebozo’s personal check
(account No. 1-34) on June 17, 1969. 62 Again, records reviewed by the
staff do not reflect reimbursement by the President to Mr. Rebozo for
this expenditure,
5. THE PRESIDENT’S PAYMENTS FOR WORK ON HIS KEY BISCAYNE
PROPERTIES '$ 76,053.02
While the preceding payments represent amounts paid by Mr.
Rebozo in 1969 for work on the President’s properties, he continued
to oversee and ordered other work to be done at the President’s homes.
Payments were made for these other expenses from the personal ac-
count of the President in the Key Biscayne Bank. In most of these
instances, an advice of charge, authorized by Mr. Rebozo, was made
against the President’s account for a cashiers’ check or Key Biscayne
Bank check issued to the supplier or contractor. 63 In two instances,
a personal check was drawn on the President’s account. (These pay-
ments, all of which were charged to the President’s account No. 2-527
in the Key Biscayne Bank are shown above on p. 1033.) Mr. Rebozo
was, therefore, in a position to charge the President’s bank account for
any expenditures affecting the President’s properties. 64
F. The Wakefield Trust Accounts
Within the 10 months following the 1968 election, Rebozo paid
expenses of the President totaling $17,091.86 with cash or with checks
charged to Rebozo’s account. Within the 3 months following the 1972
campaign, Rebozo paid for $28,529.29 of expenses incurred on the
President’s behalf from funds concealed in trust accounts under the
control of Rebozo’s attorney, Thomas H. Wakefield.
81 See 26 Hearings, exhibits 66 and 67.
02 See 26 Hearings, exhibits 68 and 69.
63 See interviews of Arthur Blech, the President’s accountant, April 18, 1974 and June 3,
1974.
** Ibid.
1037
In mid-November of 1972, Jack Brown, an employee of the Key
Biscayne Bank & Trust Co., who is regularly used as an agent by
Rebozo, ordered from J. H. Clagett, Inc., a general contractor, the
extension of the existing roof at 500 Bay Lane to cover the patio. 65 At
that time, Brown, acting on the instructions of Mr. Rebozo, repre-
sented himself to be an agent of the President. 66 On November 17,
1972, an application for a building permit was filed with the Metro-
politan Dade County Building and Zoning Board in the name of
Charles G. Rebozo for 500 Bay Lane. 67 Mr. Rebozo’s name was sub-
sequently crossed out and the name of Richard M. Nixon written
above it. 68 On November 24, 1972, $10,000 in $100 bills were deposited
to the Thomas H. Wakefield trust account (No. 05-791-19) at the
First National Bank of Miami on behalf of Rebozo. 69 This trust ac-
count had remained inactive from October 31, 1968 to November 24,
1972 with a balance of $76.24. 70 On November 30, 1972, J. H. Clagett,
Inc., submitted an invoice for $6,508.11 to Jack Brown at the Key
Biscayne Bank & Trust Co. as a “bill for Rebozo compound.” 71 On
December 7, 1972, Thomas H. Wakefield, representing C. G. Rebozo,
drew a check to J. H. Clagett, Inc., for $6,508.11 against the Thomas H.
Wakefield trust account in which $10,000 was deposited 2 weeks previ-
ously. 72 There is no record of any reimbursement for this expense to
Rebozo by President Nixon.
Thomas H. Wakefield is a signator on the following accounts :
Bank
Name of account
Account
No.
Date
opened
First National Bank of Miami
Key Biscayne Bank & T rust Co
1. Wakefield, HewittandWebstertrustaccount...
2. Wakefield and Underwood trust account
3. Thomas H. Wakefield trust account
4. Wakefield, HewittandWebstertrustaccount .
5. Thomas H. Wakefield special account
6. Wakefield, Hewitt and Webster special ac-
count
11-611-1
6-681-1
05-791-9
1- 673
2- 691
1-067
May 18,1970
June 24, 1947
(*)
Apr. 15,1969
(*)
* Not available.
Testimony and documents received by the committee indicate that
Mr. Rebozo, as a client of Wakefield, has had transactions related to
at least five of these trust accounts. 73 Thomas Wakefield refused to pro-
duce any records relating to transactions on behalf of Mr. Rebozo or
of the President in his trust accounts on the grounds of attorney-client
privilege. 74 He also invoked this privilege in response to questions re-
garding these transactions during an executive session of the com-
mittee, although he did provide some information at interviews. 75 Mr.
Rebozo refused the committee’s request that he waive the attorney-
client privilege and allow Wakefield to explain these transactions. In
order to obtain information regarding these transactions, it has been
65 See 23 Hearings 10965, and Clagett interview, June 14, 1974, p. 12.
66 Clagett interview, June 14, 1974, p. 13.
67 26 Hearings, exhibit 70.
es ma.
69 Wakefield interview, June 24, 1974, and 26 Hearings, exhibit 71.
70 Ibid.
71 26 Hearings , exhibit 72. ,
72 See Wakefield June 24, 1974 interview and 26 Hearings, exhibit 73.
73 See Thomas H. Wakefield executive session, documents attached as exhibits from the
Wakefield, Hewitt & Webster trust account, 24 Hearings 11372—85.
74 24 Hearings 11321.
73 24 Hearings 11320.
1038
necessary to serve subpenas directly on the banks involved. Although
some records were provided for one account on a previous occasion,
Rebozo, as president of the Key Biscayne Bank & Trust Co., failed
to produce records for the remaining trust accounts when they were
subpenaed in October 1973 and again in June 1974. 76
1. CONSTRUCTION OP SWIMMING POOL AND ACCESSORIES $18,435.18
Rebozo signed a contract with the Catalina Pool Co., of Miami, Fla.,
on November 14, 1972, for a 20-by-40-foot pool to be constructed at
President Nixon’s residence at 500 Bay Lane, Key Biscayne. 77 A per-
mit for the construction of this swimming pool was obtained by a
representative of Catalina Pools, Inc., from the Metropolitan Dade
County Board on November 15, 1972. 78 The permit reflects the pool to
hold 31,000 gallons and the cost is estimated to be $9,000. Construction
on the pool began on November 17 and was completed on November 28,
1972. The documents received by the committee indicate that the bills
for this work were to be sent to Wakefield, Hewitt & Webster, attor-
neys, Miami, Fla. 79
The expenditures relating to this pool amounted in the aggregate to
$18,435.18, as follows : 80
Paid to For Amount
Construction $10,100.00
Pool heater . . 1 727 . 26
Screening around swimming pool 3,600.00
Pool carpet 1 277.64
Pool furniture delivered to 478 Bay Lane 1,730.28
- - 18,435. 18
The pool bills were paid from the following sources : 81
Wakefield, Hewitt & Webster — Trust account : Amount
First National Bank of Miami No. 11-611-1 $14, 977. 64
Key Biscayne Bank No. 1-673 1, 727. 26
Cash from Rebozo 1, 730. 28
Total 18,435.18
The payments to Catalina Pools, Inc., were made from the Wake-
field, Hewitt & Webster trust account in the First National Bank of
Miami, as follows :
Date: Amount
Nov. 20, 1972 $1,000
Nov. 22, 1972 5,935
Nov. 23, 1972 2,000
Dec. 18, 1972 1,165
Total 10, 100
70 26 Hearings, exhibits 55 and 56.
77 26 Hearings, exhibit 74 for copy of contract.
78 26 Hearings, exhibit 74 for Metropolitan Dade County building permit application.
79 26 Hearings, exhibit 75 for copy of notes of Catalina Pool Co.
80 See discussion below.
81 26 Hearings, exhibits 76-82.
Catalina, lnc__
Belcher Oil Co.
Climatrol Inc..
Paul's Carpets.
Brown Jordan.
Total...
1039
Each check has a notation reflecting that the transaction is on behalf
of C. G. Rebozo. 82 Wakefield also indicated that Mr. Rebozo was his
client in the case of each check. Ann Harvey, Herbert Kalmbach’s
secretary, stated that in the summer or fall of 1972, she received an
inquiry from Mr. Rebozo asking for specification of the pool that had
been constructed at the President’s San Clemente estate. 83
2. POOL HEATER
Documents obtained pursuant to a subpena duces tecum on the
Belcher Oil Co., indicate that Mr. Rebozo ordered a heater for the
President’s pool at 500 Bay Lane on or about November 15, 1972. The
heater was paid for on February 20, 1973, by a check in the amount of
$1,727.26 drawn on funds in the Wakefield, Hewitt & Webster trust
account No. 1-673, located at the Key Biscayne Bank. The check has
a notation on it “Invoice dated January 31, 1973 — Rebozo, C. G.” 84
The committee has not been furnished with the details of this trust
account No. 1-673 since Mr. Rebozo, who was served with a subpena in
his capacity as president of the Key Biscayne Bank, has refused to
comply with a subpena duces tecum. The committee, however, received
evidence that substantial amounts on behalf of Mr. Rebozo have been
deposited in this acount including at least $3,500 in $100 bills. 85 Wake-
field indicated the Key Biscayne trust involved significantly greater
sums related to Mr. Rebozo than his trust account at the First National
Bank. Wakefield estimated deposits through his Key Biscayne Bank
trust account on behalf of Mr. Rebozo of approximately $200, OOO. 8 ®
3. SCREEN ENCLOSURE AT FOOL
The evidence in possession of the committee reflects that on or about
November 16, 1972, Mr. Charles G. Rebozo ordered from Climatrol
Corp. a “screen enclosure installed at 500 Bay Lane, Key Biscayne,
Fla.” 87 Mr. Rebozo requested plans for the screens to be provided for
the President’s review at Camp David., Md. 88 Payments to Climatrol
Corp. were made as follows :
Date
Bank
Account No. Amount
Dec. 22, 1972 First National Bank of Miami.
Do. do
Dec. 28, 1972 do
11-611-1 * 1, 500
05-791-9 ** 1,100
05-791-9 ** 1,000
* See 26 Hearings, exhibit 80 for copy of check No. 172 referred to above which has on the face of it the words “Rebozo,
C. G."
** See 26 Hearings, exhibit 81 for copy of related checks.
It will be noted that the first check was drawn on the Wakefield,
Hewitt & Webster Trust Account while the remaining checks were
drawn on the Thomas H. Wakefield Trust Account. Thus, Climatrol
82 See 26 Hearings , exhibit 76 for copy of checks issued to Catalina Pool. E.g., Nov. 20,
1972, check has notation “deposit on swimming pool contract for 500 Bay Lane, Key Bis-
cayne, Fla. ; Rebozo, C. G.” and the file number in Mr. Wakefield’s office for Rebozo.
83 See interview of Ann Harvey, May 4, 1974.
84 See 26 Hearings , exhibits 77 and 78 of the Belcher Oil Co. and the check in payment of
the pool heater.
83 See Wakefield interview, June 24, 1974, p. 2.
86 Id. at p. 3.
87 See invoice of Climatrol Corp., 26 Hearings, exhibits 79-81.
88 Interview of Lee Latham, Climatrol salesman, May 17, 1974, p. 1.
1040
was paid $3,600 in three checks signed by Thomas H. Wakefield on
two different trust accounts that he used to pay for work ordered by
Rebozo.
With respect to the payment of $1,500 on December 22, 1972, it is
noted that Mr. Rebozos funds in trust account 11-611-1 were over-
drawn on December 18, 1972, in the amount of $100. On December 22,
1972, currency amounting to $1,600 was deposited, which cured the
overdraft and provided the funds for the $1,500 check to Climatrol.
The deposit of cash funds in the law firm trust accounts and subse-
quent issue of checks from said trust accounts concealed the fact that
cash payments furnished by Mr. Rebozo were provided to pay for
work on behalf of President Nixon. As indicated before, this method
of payment was totally unnecessary since checks could have been
written on the President’s Key Biscayne accounts or debit memos
drawn against these same accounts by the President’s lawyers who
had been assigned that role.
4. POOL CARPET
The payment of $1,277.64 was made to Paul’s Carpet, Inc., by check
dated December 8, 1972, signed by Thomas H. Wakefield and drawn
on his trust account in the First National Bank of Miami. 91 This
check was for work ordered by Mr. Rebozo on November 21, 1972,
which was to provide for the installation of 182 yards of green grass,
100 percent polypropylene, for cementing at the pool at the President’s
home at 500 Bay Lane. 92 Mr. Rebozo was billed at the Ivey Biscayne
Bank for this expense. 93
5. POOL FTTRXITTTRE
Documents received by the committee indicate that Mr. Rebozo,
on January 26, 1973, ordered furniture for the “pool area” to be
delivered to “Mr. Robert H. Abplanalp, 478 Bay Lane, Key Biscayne,
Fla.” 94 Interviews and testimony before the committee, however, indi-
cate that while Mr. Abplanalp is the owner of the property at 478
Bay Lane, he immediately leased it after purchase to the U.S. Gov-
ernment and this property does not have a pool. 95 In addition, Mr.
Fabergas, an interior designer for the BBA architectural firm and
Mr. Steve Morrison, assistant sales manager for the Brown- Jordan
Co., who supplied the furniture at a cost of $1,730.28, stated to the
committee that Mrs. Nixon insisted that the fabric of the furniture
match exactly with the fabric of the Presidential pool furniture, which
had been purchased for the San Clemente property. 96
The committee has ascertained that Rebozo paid the BBA archi-
tectural firm for expenditures made to Brown- Jordan Co. by making
deposits directly to their account at the Key Biscayne Bank. 97 The first
deposit was made in the BBA account on February 1, 1973, in the
amount of $1,519.50. The second payment was disclosed to the BBA
91 26 Hearings, exhibit 82.
92 26 Hearings, exhibits 83-84.
93 26 Hearings, exhibit 83. „ , , A _
94 26 Hearings, exhibit 85 is an order form for the furniture from BBA architectural firm.
95 See interview of Mr. Perdue, June 1974.
98 See interviews of Fabergas and Morrison, June 1974.
97 26 Hearings, exhibit 86.
1041
firm in a letter dated February 20, 1973 from Mr. Rebozo’s bookkeeper,
who enclosed a deposit ticket from Mr. Rebozo to the firm's account for
$210.78. The deposit tickets and letter reflect the initials “CGR” and
$210.78 was deposited in cash. 98 The BBA firm did not have in their
files the deposit ticket for the $1,519.50, and, in an effort to determine
if that deposit was also made in cash, a: subpena duces tecum was
served on Mr. Rebozo, but he has refused to comply with the subpena.
G. Summary of Wakefield Trust Account Payments
A composite summary of the transactions relating to the construc-
tion of the pool and extension of the roof at 500 Bay Lane as noted in
the two trust account records received from the First National Bank of
Miami disclose the following :
Item : Amount
Total currency deposited $23, 500. 00
Payments to:
Catalina Pools, Inc 10, 100. 00
J. B. Clagett, Inc 6, 508. 11
Paul’s Carpets, Inc 1, 277. 64
Climatrol 3, 600. 00
Belcher Oil Co 356. 25
21, 842. 00
Funds transferred to Wakefield, Hewett & Webster trust account
No. 1-673 in Key Biscayne Bank. 2,255.52
Total disbursements 24, 097.52
Excess disbursed from firm-trust account 11-611 (597. 52)
Funds in firm-trust account No. 05-791-9 from Oct. 31, 1968,
to Oct. 31, 1972 76. 24
Balance of excess disbursements (521. 23)
It is noted that the trust account No. 05-791-19 in the name of
Thomas II. Wakefield, contains only transactions relating to Rebozo’s
activities. However, the trust account No. 11-611-1 in the firm’s name
is utilized by the law firm for more clients than just Rebozo.
The currency amounting to $23,500 was deposited on Rebozo’s be-
half to trust accounts as follows :
Date
Amount Account No.
Nov. 16, 1972 $10,000 11-611-1
Nov. 24, 1972 _ 10, 000 05-791-9
Dec. 22, 1972 1,600 11-611-1
Jan. 25, 1973 200 11-611-1
Apr. 4, 1973 . __ _ 1,700 05-791-9
Total _ 23,500
Other currency deposited in the trust accounts as revealed from the
records furnished by the First National Bank of Miami and from
interview of Thomas H. Wakefield are as follows :
98 Ibid.
1042
Account
Date
Amount
In First National Bank of Miami, Wakefield, Hewitt, and Webster— trust account 11-611-1..
. July
July
27, 1972
2, 1973
$3, 500
2,150
In Key Biscayne Bank, Wakefield, Hewitt, and Webster— trust account 1-673
Total
C)
5,650
3, 500
9,150
•Not known.
Accordingly, at least $32,650 in currency has been deposited in three
trust accounts on behalf of Rebozo.
According to Thomas H. Wakefield, the currency deposited as in-
dicated above consisted of $100 bills." Wakefield invoked attorney-
client privilege as to the source of the funds and indicated that his
client was Rebozo. 1 However, Wakefield has stated that he never de-
posited currency on behalf of any client other than Rebozo. 2 The
currency received by Mr. Rebozo from Richard Danner, representa-
tive of Howard Hughes, and at least half of that from A. D. Davis
consisted of $100 bills.
Furthermore, Rebozo reported in his September 1972 financial
statement a total of $12,234.72 cash on hand and in unrestricted bank
accounts of which $2,453.78 is the balance in Rebozo’s six bank ac-
counts. 3 According, therefore, to Rebozo’s own figures, currency on
hand would be approximately $9,780.94. 4
Mr. Rebozo’s only known source of currency during this period
was his bank salary for the months of September, October, and 2
weeks in November 1972. The cash he received from this source
amounted to $3,844.80 and assuming he spent no part of it, the full
amount is being included in this computation as being available to
Rebozo. Rebozo did not, during this period or at any time since J anu-
ary 1, 1969, draw a check to cash for his own use nor is there any
indication that he received currency from business transactions. There-
fore, Rebozo had a maximum of $13,665.74 in currency on hand at
the November 15, 1972, salary date which was just prior to the de-
posit of $20,000 in currency in the Wakefield trust accounts. Accord-
ing to Rebozo’s testimony and financial records made available to
the committee, Rebozo did not have sufficient funds available on No-
vember 16 and November 24, 1972, at which time he made two $10,000
cash deposits. These funds, amounting to $20,000 were subsequently
used for the President’s behalf.
A summary of information available to the committee pertaining
to the above analysis follows :
89 Interview of Thomas H. Wakefield, June 24, 1974, p. 2.
1 Mr. Wakefield did state that $21,600 in $100 bills deposited in the First National Bank
trusts were on behalf of Mr. Rebozo. Ibid.
3 Wakefield interview June 24. 1974. p. 2.
3 See affidavit of Carmine Bellino, 26 Hearings 12944. See also 26 Hearings, exhibit 87.
4 Ibid.
1043
Cash on hand and in unrestricted bank accounts per financial state-
ment of C. G. Rebozo, at Sept. 1, 1972 $12, 234. 72
Balance in Rebozo bank accounts at Sept. 1, 1972 :
Account 1-34 in Key Biscayne Bank 1, 241. 61
Account 1-262 in Key Biscayne Bank 70. 97
Account 4-41 79 in Key Biscayne Bank 472. 56
Account 1-0886 in Key Biscayne Bank 7. 08
Account 4 in Greater Miami Federal Savings & Loan 461. 56
Account 5-28170 in Manufacturers Hanover 200. 00
Total cash in banks 2, 453. 78
Currency on hand, Aug. 31, 1972 9, 780. 94
Currency from salary payments :
Sept. 15, 1972 776. 96
Sept. 30, 1972 776. 96
Oct. 15, 1972 776. 96
Oct. 31, 1972 776. 96
Nov. 15, 1972 776. 96
Total currency, assuming none spent 3, 884. 80
Cash available at Nov. 15, 1972 13, 665. 74
Deposit in Wakefield, Hewitt & Webster trust account, First National
Bank of Miami, account No. 11-611-1, Nov. 16, 1972, in cur-
rency 10,000. 00
Deposit in Thomas H. Wakefield trust account, First National Bank
of Miami, in currency, account No. 05-791-9, Nov. 24, 1972 10, 000. 00
Total currency payments 20, 000. 00
Currency used in excess of currency from known sources (6, 334. 26)
An additional analysis using earlier records also shows a shortage
of currency.
Mr. Rebozo reported in his September 1971 financial statement a
total of $47,520.49 cash on hand and in unrestricted bank accounts.
His bank balance was in excess of this amount and therefore, no
currency was reported by Rebozo as being on hand as of September 1,
1971. 5 Rebozo’s only known source of currency from September 1,
1971, through November 30, 1972, was his bank salary. During this
period, Rebozo received $23,246.52 in currency for his bank account
but never issued any checks or debits from which currency was derived
for his use. Assuming that Rebozo spent no part of his salary other
than what he deposited, he had only $12,446.52 in currency from known
sources — other than campaign funds — available to him during a pe-
riod when he deposited $23,500 in the Wakefield trust accounts on
the President’s behalf. Therefore, Rebozo must have had available
to him at least $11,053.48 from some previously undisclosed source at
a time when he had access to currency derived from campaign con-
tributions. 6
5 26 Hearings, exhibit 87.
0 See Bellino affidavit, 26 Hearings 12944. Also note that according to an intangible
personal property report filed by Rebozo with the State of Florida, as of Jan. 1, 1972, he
declared cash on hand of .$1,000.
1044
The information is summarized below :
Cash on hand and in bank at Sept. 1, 1971 per financial statement— $47, 520. 49
Currency (all of above is accounted for in banks) none
Currency received as salary from Key Biscayne Bank from Sept.
1, 1971 to Nov. 30, 1972 23, 246. 52
Currency deposited during above period 10, 800. 00
Currency available from known sources 12, 446. 52
Currency payments for President Nixon’s properties in Key Bis-
cayne 23, 500. 00
Currency used in excess of available currency from known sources-- (11, 053. 48)
These two analyses indicate that Rebozo had some previously un-
disclosed source of currency from which he drew funds on the Presi-
dent’s behalf. According to his testimony and records, the only such
source of currency available to him were campaign contributions.
H. Rebozo’s Financial Situation
According to documents available to the committee, a substantial
percentage of Rebozo’s reported gross income went for the payment of
interest on loans. A study of Mr. Rebozo’s financial statements cover-
ing the period from September 1, 1968 to September 1, 1973, reflects
a constant borrowing of funds from various banks and individuals
in Dade County and also outside of Florida. His principal assets
include stock in the Key Biscayne Bank and Fisher’s Island, Inc.
Rebozo’s total interest payments on loans during the 5-year period
amounted to almost $500,000 while his reported gross income during
this period averaged to only $24,000 a year above his itemized deduc-
tions. 7 Therefore, a considerable portion of his reported gross earn-
ings, averaging approximately 72 percent, went to the payments of
interest on Rebozo’s loans.
1. NO RECORD OP POOL COSTS IN PRESIDENT’S BOOKS
Although at least $18,435.19 was expended in connection with the
swimming pool on the President’s property at 500 Bay Lane, no record
whatsoever appeared in the 1972 or the 1973 accounting books of the
President maintained by Arthur Blech, the President’s certified public
accountant. 8 However, when Blech was reviewing the accounts in early
1974, in connection with the preparation of the President’s 1973 in-
come tax return, he found a check, signed by Rose Mary Woods — the
first she had ever signed on the President’s account. 9
The check was dated August 18, 1973 and was of further interest
because it was payable to Mr. Rebozo, in the amount of $13,642.52.
Blech noted also that, the check was typewritten and that two different
typewriters had been used from the typing on the check. As he had no
idea what this check could have been for, he posted the item to “Ac-
count No. 999 — Suspense.” Thereafter, he inquired of Ann Harvey
and Frank De Marco and learned the payment was for the construc-
tion of a swimming pool which had occurred in December 1972, and
the check to Rebozo for $13,642.52 dated August 18, 1973 was a
reimbursement for payments he had made. 10
7 Documentation for the above analysis may be found in the committee’s files. The
committee did not feel it appropriate to reveal extensive personal financial data.
8 See Arthur Blech interviews, Apr. 18, 1974, June 3 and 22, 1974.
9 Blech interview, June 3, 1974.
19 Ibid.
1045
It is of interest to note that at the time of issue of this check in
August 1973, Rebozo had returned $100,000 to Hughes, was under
active investigation by the Internal Revenue Service and the Senate
Sele.ct Committee was indicating interest in the Hughes contribution.
2. THE FIREPLACE
Other documents received by the committee indicate that Rebozo
ordered the construction of a fireplace for the President’s home at 516
Bay Lane 11 and instructed the contractor, J. H. Clagett, Inc., that the
billing should be sent to Thomas II. Wakefield. 12 The records received
from Clagett indicate that the bill of $3,586 was paid on March 26,
1973, but Clagett has been unable to provide the form of the payment,
that is, whether it was cash deposited in his Key Biscayne Bank ac-
count or whether it. may have been a Wakefield Trust Account check.
This item was not paid from the President’s bank accounts ; nor was
it paid from Rebozo’s bank accounts furnished to the committee. 13
The committee attempted to determine how payment was made by
service of a subpena on Mr. Charles G. Rebozo as president of the Key
Biscayne Bank but he has failed to comply with the subpena.
3. THE POOL TABLE
The committee has also received documents and information that
Mr. Rebozo paid $1,138.30 by personal check on March 19, 1970 to
William Brandt’s Billiard Supply Co. for a “pool table” ordered by
Mr. Rebozo at 490 Bay Lane. 14 This pool table has a gold covering. 13
However, Mr. James Perdue, who assisted in the work being done
on the President’s properties, stated there is a pool table in President
Nixon’s home at 516 Bay Lane and his description of this cover was
identical to the one ordered by Rebozo as described above. 16
4. FUEL OIL PAYMENTS
In addition to the payments to Belcher Oil Co. for the pool heater,
three payments were made to them from the two trust accounts in
the First National Bank of Miami as follows :
Date : Amount
Jan. 25, 1973 $138. 50
Apr. 24, 1973 75. 88
May 16, 1973 141. 87
These checks are in payment of fuel oil delivered to the President’s
home at 500 Bay Lane and believed to have been used in the pool
heater mentioned above. 17
More recent invoices including the invoice of June 29, 1973, indicate
billings to Key Biscayne Bank for work performed at the President’s
home on 500 Bay Lane. For example, a cashier’s check signed by
Vernon L. Tucker, an officer of the Key Biscayne Bank, in the amount
11 26 Hearings, exhibit 88 reflects copy of estimate furnished for construction.
13 J. H. Clagett interview, June 14, 1974.
13 See Bellino affidavit, 26 Hearings 12944.
14 26 Hearings, exhibit 89 is copy of billing from Brandt. See also Bellino affidavit.
15 Interview with Mrs. Brandt, June 4, 1974, p. 1.
18 See Perdue interview, June 1974.
17 See 26 Hearings, exhibits 91 and 92 for copies of checks and bills.
1046
of $38.16 was paid to the Belcher Oil Co. The space provided for the
remitter was not filled in, and thereby does not disclose who furnished
the funds for the purchase of the cashier’s check.
I. The Florida Nixon for President Committee Account
Mr. Rebozo maintained an account in the Key Biscayne Bank in
the name of The Florida Nixon for President Committee account No.
1-0455. Although efforts have been made to obtain a copy of this
account and Rebozo promised to furnish a copy of the account to
the committee, he has failed to do so. Mr. Rebozo was a signator to
this account and at least $426.87 was used from this campaign fund
for the personal benefit of President Nixon. On February Iff, 1969,
Rebozo issued his own check in this amount of $426.87 to reimburse
the campaign account. 18 The check stub for check number 3867 reads
“Reimb. of various bills advanced for RMN, Pers.”
On April 14, 1969, Rebozo issued check No. 1150, against funds in
the Florida Nixon for President Committee account, payable to Her-
bert W. Kalmbach in the amount of $216.18. 18a Part of these funds were
subsequently used to pay expenses of Jack Caulfield, who conducted
special investigatory work for John Ehrlichman.
The following day, Mr. Rebozo issued a check for $6,000 payable
to Thomas H. Wakefield — special account, drawn on the Florida
Nixon for President Committee, and thereupon opened a new account,
the Thomas H. Wakefield— special account No. 2-1691 in the Key
Biscayne Bank. 19 The signators were Thomas H. Wakefield and
Charles G. Rebozo, 20 with either one authorized to sign. No address
was shown for the mailing of statements — the only notation being
“Hold Statements.” 21
Rebozo has testified that the $6,000 represented funds that were
owed to him for “one thing or another.” He further testified that he
was “worried about how it might look if he wrote a check to him-
self.” He testified that he created this special account in his attorney’s
name and wrote a check to it in order to receive the funds “without
drawing them to attention.” 22
Rebozo continued to sign all checks or authorized charges until the
final closing of this account. The funds in this account were dis-
bursed by Rebozo in the same manner as he handled the funds in the
Florida Nixon for President committee account except that now the
nature of the funds, that is, campaign funds, was concealed through
the use of said special account .
Disbursements from this account were as follows :
18 See Bellino affidavit. 26 Searings 12944.
18a 26 Searings, exhibit 93.
i 0 Wakefield was not aware of this account until Rebozo told him after it was opened.
Wakefield was not aware of the source of the funds originally deposited in this account.
24 Searings 11297.
20 26 Searings, exhibit 94.
21 26 Searings, exhibit 95 for statements.
22 21 Searings 9946. Rebozo agreed to produce the Florida Nixon for President committee
records supporting his statement but as mentioned above later refused to produce them for
the committee.
Date Paid To
Amount Remarks
H ay Herbert W. Kalmbach $200.00 Subsequently paid to Jack Caulfield.
May 23,1969 Bank charge for checks 4.66
May 29, 1969 Pitney- Bowes Inc _ 124.80 Invoice No. 65-182408.
July 25,1969 Herbert W. Kalmbach 1,000.00 Subsequently paid to Tony Ulasewicz,
Sept. 10, 1969 Thunderbird Studio 108.16 Balance due, pictures at reception of President
June 28, 1972 Wakefield, Hewitt & Webster trust account 4,562.38 Use discussed below.
No. 1-673.
Total ■___ 6,000.00
Rebozo has refused a committee request that he provide documents
showing the purpose of the original transfer of $6,000 of campaign
funds to the Thomas TI. Wakefield special account.
It will be noted that this special account, derived from 1968 cam-
paign funds, maintained a balance of $4,562.38 for almost 3 years.
On June 28, 1972, Rebozo closed it out by transferring the funds
through an advice of charge 23 to the Wakefield, Hewitt & Webster
trust account No. 1-673 in the Key Biscayne Bank. The same day,
a check was issued for $5,000 against account 1-673, and the proceeds
of this check were deposited in the Wakefield, Hewitt & Webster trust
account No. 11-611-1 in the First National Bank of Miami. 24 Also
on the same day, a check was issued from this account purchasing
a cashier’s check from the First National Bank of Miami, payable to
Harry Winston in the amount of $5,000. 25 These funds were used to
purchase platinum diamond earrings, a birthday gift to Mrs. Nixon
from President Nixon, as indicated hereinafter.
J. Purchase of Earrings for Mrs. Nixon From Harry Winston
The records of Harry Winston, a jeweler in New York City, reflect
that on March 17, 1972, a set of platinum diamond earrings contain-
ing : “Tops, 16 pear shape diamonds ; Bottoms , 2 pear shape diamonds,
2 tapered baguette diamonds” were delivered to Lt. Cmdr. Alex Larze-
lere who was then attached to the White House staff. The consignment
slip of March 17, 1972, indicates in handwriting “Rose Mary” in the
upper left-hand corner. Lieutenant Commander Larzelere delivered
the earrings to his superior at the White House and was told that they
were for President Nixon’s gift to his wife on her birthday. 26 On the
copies of the bills addressed to President Richard Nixon as indicated
in handwriting of the salesman, “please send to Rose Mary Woods.”
The full cost of these earrings is shown as $5,650, with payment
being made as follows according to Harry Winston’s records:
23 26 Hearings , exhibit 96 is a copy of the advice of charge of June 28, 1972, which
transferred the $4,562.38 from the Wakefield special account in the Key Biscayne Bank to
the Wakefield, Hewitt & Webster trust account, in the First National Bank.
24 26 Hearings, exhibit 97 is a copy of the deposit ticket reflecting that transaction.
2s> 26 Hearings, exhibits 97 and 98.
26 26 Hearings, exhibit 99 reflects records of Harry Winston and the purchase of $5,000
earrings. Winston’s records further reflect that the earrings were ordered on the President’s
account and that a bill was sent to President Richard M. Nixon at the White House which
was delivered by hand by a salesman who is now deceased. See also interview of Lt.
Comdr. Alex Larzelere, June 19, 1974, p. 1. Mrs. Nixon, in fact, had her 60th birthday on
Mar. 17, 1972. See Who’s Who, Inc., 1972, p. 374.
1048
Paid to
Amount Deposited at
President Richard M. Nixon $5, 000 First National Bank of Miami.
Do_ 560 Riggs National Bank.
Rose Mary Woods 90 First National Bank of Washington.
Total 5,650
The $5,000 check, as previously stated was a cashier’s check drawn
on the First National Bank of Miami and derived from the Wakefield,
Hewitt & Webster, trust account No. 11-611-1 in the First National
Bank. The funds in this account were transferred from the Wakefield
firm trust account No. 1-673 in the Key Biscayne Bank and $4,562.38
was received by the firm’s trust account from the Thomas Wakefield
special account No. 2-1691 in the Key Biscayne Bank. The funds in
the special account w T ere derived from the Florida Nixon for President
committee. Therefore, $4,562.38 of funds originally derived from cam-
paign contributions were used to purchase platinum diamond earrings.
This complex four-stage process of payment for this gift concealed
the fact that the funds originated from contributions to the 1968 cam-
paign and were ultimately used by Bebozo on behalf of President
Nixon.
K. President Nixon Beneficiary of Loan Note Signed by
C. G. Rebozo
The examination of the President’s assets and liabilities dated
August 20, 1973, by the accounting firm of Coopers & Lybrand noted
that the President had purchased property at 500 Bay Lane. Key
Biscayne, Fla., “consisting of land, building and furnishings” on
December 19, 1968, from Senator George A. Smathers for $125,000.
Their report also noted the President had purchased land at 516 Bay
Lane for $127,928 and the down payments for these properties came
from the proceeds of a loan obtained in the amount of $65,000 on
December 19, 1968, from the First National Bank of Miami.
When President Nixon acquired the Key Biscayne properties, he
assumed the existing mortgages and a note for $65,000 which was
executed by C. G. Rebozo with the First National Bank of Miami. This
note was dated December 19, 1968, payable 32 days later at 7 percent
interest. 27 The proceeds of this note were used to pay the owners of the
property as follows :
Paid to : Amount
Senator and Mrs. George A. Smathers $43, 497. 00
Manuel Area, Jr., and Evora Bonet de Area 20, 243. 00
Closing expenditures 643. 00
64, 383. 00
Cash remitted to President Nixon 617. 00
Total 65, 000. 00
Wakefield stated that Rebozo paid him legal fees incurred for the
purchase of 500 and 516 Bay Lane and he considered Rebozo to be his
client for said purchase. 28
27 26 Hearings, exhibit 100 is a copy of the note referred to,
28 Wakefield interview, June 24, 1974.
1049
This transaction handled by Rebozo not only provided the President
with the Key Biscayne properties without the investment of any funds
on his part (in fact the President received $617) but, the obligation on
the $65,000 note was accepted by C. G. Rebozo. In this connection, the
liability ledger includes this $65,000 loan in the name of Richard M.
and Patricia R. Nixon, 29 while the demand tickler sheet was in the
name of C. G. Rebozo. 30
Although this loan was due January 20, 1969, it was changed on that
date to a demand loan and was not paid until September 4, 1969. On
that date Mr. Richard Stearns, senior vice president of the Key
Biscayne Bank forwarded a cashier's check charged to the President’s
account in the Key Biscayne Bank with letter reading as follows:
“Enclosed you will find our cashier’s check No. 10864 in the amount of
$65,763.75 of which $65,000 is payment on the principal note of Mr.
C. G. Rebozo and $763.75 for interest.” 31
In the report of the Joint Committee on Internal Revenue Taxation
on their examination of President Nixon’s tax returns, evidence was
adduced that on March 12, 1973, the sum of $65,000 was transferred
from the President’s account to Mr. Rebozo as a 3-year loan payable to
Mrs. Patricia Cox at 8 percent interest. This amount was part of the
proceeds of the sale of property on December 28, 1972, which property
had been acquired by the President from Cape Florida Development,
Inc.
L. Summary of Total Payments on Behalf of President Nixon
A summary of the payments made by Rebozo on behalf of the Presi-
dent as disclosed from documents and interviews discussed herein re-
flects a pattern of Rebozo expenditures of at least $50,000. The com-
mittee has obviously not been able to identify conclusively all the
payments made by Rebozo as the pertinent records desired from
Rebozo and his Key Biscayne Bank & Trust Co. have never been pro-
duced and Rebozo has refused to comply with subpenas duces tecum
served on him. Any further investigation by other investigatory bodies
should focus initially on obtaining the trust account records from the
Key Biscayne Bank that this committee has been unable to obtain.
While the committee has been unable to determine, based on docu-
ments received to date, if the transfer of $65,000 to Mr. Rebozo on
March 12, 1973, was related in any way to the note Mr. Rebozo signed
on behalf of President Nixon for $65,000, the committee’s letter to
Mr. St. Clair of June 6, 1974, asked for any information or documents
from the President which might clarify any relationship between the
two transactions. The letter inquired :
The Committee would appreciate learning under what cir-
cumstances Mr. Rebozo incurred the above described obliga-
tion [referring to the signing of the note] and what, if any,
consideration he received for incurring said obligation.
As noted below, the committee received a response to its letter from
counsel St. Clair which failed to respond to any of the specific issues
raised by the committee’s inquiry. 32
29 See 26 Hearings, exhibit 101 for liability ledger sheet.
30 See 26 Hearings, exhibit 102 for demand tickler sheet.
81 See 26 Hearings, exhibit 103 for copy of letter dated Sept. 4, 1969.
32 26 Hearings, exhibit 1 is a copy of the letter to Mr. St. Clair of June 6, 1974.
1050 '
M. $20,000 Cash Funds in Rebozo’s Possession — September 1969
Since 1964, Rebozo has followed the practice of preparing and mail-
ing to banks from which he has received loans, a financial statement as
of September 1 of each year, showing his assets, liabilities, net worth,
and other financial data.
Of interest in connection with his September 1, 1969, financial state-
ment is the fact that he included therein cash onhand of $20,000. As
the evidence tended to show, this is the month during which Richard
Danner delivered a $50,000 campaign contribution from Howard
Hughes to Bebe Rebozo.
Specifically, the financial statement executed on October 9, 1969,
and mailed to the Manufacturers-Hanover Trust Co. 33 showing his
assets, liabilities, and net worth as of September 1, 1969, includes as
“cash on hand, and unrestricted in banks, $23,741.36.”
Mr. Rebozo’s checking account No. 1-34 in the Key Biscayne Bank
shows a balance as of September 1, 1969, of $3,741.36. The difference be-
tween the amount in the bank ($3,741.36) and the amount shown on
his financial statement, ($23,741.36) is $20,000, which sum would have
to be currency. It is of interest to note that the following year, Septem-
ber 1, 1970, Rebozo’s financial statement shows “Cash on hand and un-
restricted in banks, $44,691.20. 34 This amount agrees to the penny with
the balance in Rebozo’s bank account No. 1-34 at the Key Biscayne
Bank.
When questioned at executive session on March 21, 1974, 35 Rebozo
denied the $20,000 represented cash. He stated that funds in a savings
account in a bank in Key West were included in his cash. However, the
documentation he forwarded to the committee does not support his
statement since the amount in the savings account of the First Federal
Savings & Loan of Key West, Fla., is in the name of Monroe Land &
Title Co., and the balance is less than $2,000. 36
When questioned on March 21, 1974, Rebozo also denied that the
$20,000 was cash that Richard Danner had brought to him as part of
the Hughes contribution.
In addition, Rebozo was asked if he ever had a sum of $50,000 in cash
since January 1, 1969, to which Rebozo answered, “No; I never had
that much cash, not deposited.” 37 Mr. Rebozo was also questioned as to
whether he had ever loaned any money to the President since January
1, 1969, and answered, “I haven’t but the bank has. Wait a minute, not
since January of 1969, though.” 38 Rebozo was also asked, “And have
you ever given any gifts of cash or stock or any other negotiable com-
modity of value in excess of $1,000 to the President?” Mr. Rebozo an-
swered, “No.” Rebozo was also asked, “Have you ever cashed any checks
in excess of $10,000 in the President’s behalf for cash?” and again
Rebozo answered “No.” 39
In addition to the expenditures already commented upon, Rebozo’s
personal bank records furnished to the committee, reveal he issued
personal checks for a variety of expenses incurred on President Nixon’s
33 26 Hearings, exhibit 87 contains a copy of the financial statement referred to.
34 26 Hearings, exhibit 87.
35 21 Hearings 10072-73.
38 Details in passbook may be found in committee files.
37 21 Hearings 10072.
33 21 Hearings 10133.
39 Ibid.
1051
Key Biscayne properties between January 24, 1969, and May 12, 1970,
which checks total $832.32 40 Of this sum, Rebozo’s records reflect he
received one reimbursement from the President, in the amount of
$127.77 on February 14, 1969. The records maintained by the Presi-
dent’s accountant reviewed by the committee also reflects that the
President had made only one reimbursement of $127.77 through
May 31, 1973. g
N. The President’s Response
In a letter of June 6, 1974, Chairman Ervin and Vice Chairman
Baker furnished most of the above-described information to Mr. James
St. Clair, Counsel to the President. The letter noted as its purpose that :
The committee has received certain evidence that may relate
to information and documents in possession of the President
or his representatives. We wish to afford the President an
opportunity to comment on this material prior to the filing of
this report. We would appreciate any assistance you can pro-
vide in clarifying the issues set forth below and in aiding us
in reviewing this evidence. Information provided will be
especially helpful in those areas where the committee has not
had access to all available documents, and where systematic-
analysis has been impossible since only random documentation
has been provided us. 41
On June 24, 1974, tbe committee received a response to its letter
from Mr. St. Clair in behalf of the President. After characterizing
the committee’s letter and indicating he had reviewed it with the
President on June 20, 1974, Mr. St. Clair makes two general responses:
The President has made public an audit of his affairs dated
August 20, 1973, certified by Coopers & Lybrand, which, he is
confident, reflected fully his receipts and expenditures for the
period covered.
I believe that the only useful comment that can be made in
response to your letter is to convey the President’s assurance
that he never instructed C. G. Rebozo to raise and maintain
funds to be disbursed for the President’s personal behalf, nor
so far as he knows was this ever done. 42
As a result, the President through his counsel has failed to respond to
any of the specific inquiries delineated in the committee’s letter and,
therefore, has not provided information that might assist the commit-
tee in its review of these matters.
O. Rebozo’s Response
When Mr. Rebozo was questioned at an executive session, 43 the com-
mittee did not have in its possession information which disclosed
Rebozo’s substantial expenditures on behalf of President Nixon. He
was asked if on occasion he had paid “miscellaneous bills for 500 Bay
Lane.” Rebozo replied in the affirmative; and when he was asked if
^ See schedule of the^ payments referred to above in the committee’s files.
26 Hearings, exhibit 1 is a copy of the committee’s letter to the President’s counsel,
Mr. St. Clair on June 6, 1974.
f 5 Hearings , exhibit 2 for copy of St. Clair’s letter to Senators Ervin and Baker.
43 21 Hearings 10078.
1052
he had been reimbursed for these expenditures, he answered, “Yes, I
say, usually I’m not going to nitpick with the President, If there’s
something I think he should have, I might just go ahead and do it
without even him knowing about it. He just doesn’t concern himself at
all with financial problems ever ; he never has.”
The committee has subpenaed from Rebozo and from the Key Bis-
cayne Bank & Trust Co. records of expenditures during the relevant
periods paid for or on behalf of President Richard Nixon, Rose Mary
Woods, F. Donald Nixon, Donald A. Nixon, and Edward Nixon.
Rebozo had, both individually and in his capacity as president of the
Key Biscayne Bank & Trust Co., refused to produce these records. 44
After the facts discussed above were developed by the committee, a
subpena was issued for Rebozo’s appearance and served on his attor-
ney, thus providing Rebozo with an opportunity to respond. His attor-
ney informed the committee that Rebozo had left the country and that
he was no longer authorized to accept service on Rebozo’s behalf.
P. Other Recipients of Campaign Funds
As noted above, the committee received evidence that Rebozo ad-
vised Kalmbach that he had furnished part of the funds received from
Hughes to the President’s brothers.
Both F. Donald and Edward Nixon have denied under oath to the
Select Committee having received any funds or gifts from Mr. Charles
G. Rebozo.
The committee, however, has been unable to make a conclusive deter-
mination as to whether Messrs. Edward or F. Donald Nixon received
any of the proceeds of the Hughes contribution to Rebozo due to the
failure and refusal of both to comply with the subpena duces tecum
which sought certain documents and records deemed by the committee
pertinent to its inquiry, and to testify after being advised questions
would relate to whether either received the proceeds of campaign
contributions.
The chart on the following page traces currency and bank funds
controlled by C. G. Rebozo and expended for the benefit of President
Nixon and others. The figures reflected in the chart do not reflect
necessarily all such possible transactions due to Mr. Rebozo’s failure
to comply fully with subpenas served on him for records relating to
those transactions.
The chart does reflect, however, the flow of cash currency in and
out of three trust accounts and a special account, all in the name of
Mr. Rebozo’s attorney, Thomas H. Wakefield. The chart also reflects
amounts expended for alterations, additions, and improvements on
the President’s Key Biscayne properties and for other items purchased
in his behalf.
The chart, for example, shows that $6,000 of campaign contributions
were deposited in the Florida Nixon for President Committee, which
funds were later transferred to the Thomas H. Wakefield special
account at the Key Biscayne Bank. The chart then shows the flow
of $4,562.38 from the Wakefield special account to the Wakefield,
Hewitt & Webster trust account, and on the same date $5,000 was
withdrawn from said trust account and deposited in the AYakefield,
44 See 26 Hearings, exhibits 55 and 56 for copies of subpenas of the Select Committee.
1053
Hewitt & Webster trust account at the First National Bank of Miami.
On the same date as that transfer, a cashier’s check was purchased at
the First National Bank of Miami, which was furnished to Harry
Winston, a jeweler in New York, for the purchase of platinum and
diamond earrings, furnished by President Nixon to his wife on her
birthday in March of 1972.
XI. A SUMMARY ANALYSIS OF CONFLICTING EVIDENCE
In the course of its investigation into the receipt by Rebozo of
$100,000 from Hughes, the Senate Select Committee has received con-
siderable evidence, a significant portion of which reflects conflicts in
principal witnesses’ testimony. To allow for an appropriate review
of rather complex factual materials, a summary analysis of said con-
flicting testimony on important issues is presented here.
A. Initiator or the Contribution
When asked on March 20, 1973, who brought up the Hughes con-
tribution first, Mr. Rebozo replied, “Danner brought it up with me.
I had no reason to bring it up with Danner. He was a practicing
lawyer in Washington and was not even connected with Hughes.” 46
In his testimony on December 18, 1973, Mr. Richard Danner was asked
if it was Danner “who initiated the discussions about the possibility
of getting a contribution from the Hughes Tool Co. or Mr. Hughes.” 47
Danner replied, “No. I had no contact with the Hughes Tool Co.,
none whatsoever in that respect. I didn’t know any of the principals
involved. And when the question arose as to whether I could do any-
thing in that light, I agreed to talk to Ed Morgan.” 4S
Mr. Rebozo also testified on March 20, 1974, that he never met with
candidate Nixon and Richard Danner to discuss the possibility of
obtaining a contribution from Howard Hughes in the 1968 campaign. 49
However, Mr. Richard Danner testified on December 18, 1973, that
Mr. Nixon was present at the first discussion of a possible Hughes
contribution and that either candidate Nixon or Mr. Rebozo first
asked Danner to ascertain if Hughes would make a contribution. 50
After Rebozo denied that candidate Nixon was present in the first
discussion about the Hughes contribution in 1968, Danner was asked
again about candidate Nixon’s presence in an executive session on
June 12, 1974. Danner again confirmed that President Nixon and Re-
bozo had both been present in the first meeting when the Hughes
contribution was brought up. 51
B. Actual Delivery of Funds
On March 20, 1974, Mr. Rebozo testified that he received the first
$50,000 cash contribution from Richard Danner on July 3, 1970, at
the staff mess at San Clemente, and that he received the second $50,000
46 21 Hearings 9940 .
47 20 Hearings 9503 .
45 IUd.
49 21 Hearings 9940 .
30 20 Hearings 9504 .
51 24 Hearings 11439 .
1054
cash contribution from Bichard Danner in August 1970 at his office
in the Key Biscayne Bank in Key Biscayne, Fla. 52
However, when Bebozo first met with IBS agents on May 10, 1973,
he testified that he received the first, delivery in late 1968 or early 1969
and that he received the second delivery 2 or 3 months later. At that
time, Bebozo could not recall whether he received the first package
in Key Biscayne or San Clemente, but that he had received one package
in each location. 53
Mr. Bebozo also told the IBS agents on May 10, 1973, that Bobert,
Maheu may have been present in Florida when Bebozo received the
contribution in Florida, but was not present at the time of the
delivery. 54
On July 10, 1973, when Bebozo met again with IBS agents, he re-
called that the first contribution had been in 1969 at the San Clemente
Inn, since, to the best of his knowledge, Danner had never been inside
the San Clemente compound. 55 It was not until his October 8, 1973,
interview with the Senate Select Committee that Bebozo finally fixed
on July 3, 1970, as being the date of the first, contribution and the
San Clemente Western White House as being the place for that
delivery. 56
However, on June 18, 1973, Bebozo told Kenneth Whitaker, special
agent in charge of the Miami FBI office, that he had received $50,000
in cash from Bichard Danner in 1969. 57
In addition, Bichard Danner testified before the Senate Select
Committee on December 18, 1973, that he could not recall whether
the first delivery of cash was in the late summer of 1969 in Key Bis-
cayne, Fla., or on July 3, 1970, at San Clemente. 53 Similarly, Bobert
Maheu also places the first delivery of $50,000 in 1969. Maheu testified
in a deposition on July 4, 1973, that “Mr. Danner made the first
delivery which would have been some time in 1969.” 59
Similarly, Bobert Maheu was certain that he was present at the
delivery of the cash in Key Biscayne. He recalls seeing the envelope
containing the cash passed from Danner to Bebozo, and recalls that
Danner, Bebozo, and Maheu left Bebozo’s home in Bebozo’s car to dine
at Sol Mandel’s Bestaurant after Danner had given Bebozo the cash. 60
Bichard Danner completely supported Maheu’s version of the first
delivery in Danner’s first interview with the IBS on May 15, 1972. 61
Danner subsequently changed his IBS testimony on July 5, 1973,
after he had discussions about the matter with Bebozo in the summer
of 1972. 62
In one of his interviews with the Select Committee staff, Bebozo
also stated that it was his recollection that he received the Key
Biscayne contribution at his home rather than at his bank office. 63 On
62 21 Hearings 9963, 9976. 9982.
53 IRS interview, May 10, 1W3, p. 2.
54 Id. at p. 2.
65 IRS interview, July 10. 1973, p. 6.
50 See Oct. 8, 1973, interview with Rebozo.
57 See letter from FBI Director Clarence Kelley to Commissioner Donald Alexander, in
the files of IRS.
68 20 Hearings 9531.
59 Robert Maheu, civil deposition, July 4, 1973, vol. 12, p. 1037.
00 Robert Maheu interview, Jan. 20, 1973.
61 See May 15, 1972, IRS interview with Danner, p. 18.
02 20 Hearings 11477.
69 See Oct. 17, 1973, Rebozo interview.
74 (Face p. 1052)
Q. Summary Chart
SUMMARY
KEY BISCAYNE PROPERTIES -
$45,977.40
PLATINUM EARRINGS -
5,000.00
PURCHASE OF DIAMONDS -
2,150.00
STOCK PURCHASED -
MRS. JANE HARRISON -
3,454.49
TOTAL $56,581.89
C. 6, REBOZO
CASH CURRENCY
1968 BALANCE AT LEAST
HOWARD HUGHES - SEPT. 1969
JULY 1970
.A. D. DAVIS APRIL 1972
$ 1 - 654 . 00 ^ ^
1.681.00
210.78 ^
1.519.50
11.700.00
11 .800.00
3.500.00
3. 500.00
2-15Q.QQ
^$37,715.58 TOTAL
$ 6,000
50,000
50,000
50,000
$156,000
f C. 6. REBOZO
ACCT 1-34
KEY BISCAYNE BANK
OUT
$ 243.57
1,138.80
11.978.84
426.87
C. G. REBOZO
1968
UNKNOWN
CONTRIBUTORS
UNKNOWN
SOURCE OF FUNDS
OUT
^ 3 ^ 586^00
w££
$3,981.65 TOTAL
CHART SHOWING TRACING OF CURRENCY
AND BANK FUNDS
CONTROLLED BY C. G. REBOZO
AND USED FOR THE BENEFIT OF
PRESIDENT NIXON
AND OTHERS
| OUT
r$6,OOO.OO0
(216.18)
FLORIDA NIXON FOR
PRESIDENT COM.
ACCT 1-0455
KEY BISCAYNE
BANK
OUT
$2.100.0C
1,277.64
6.508. li
1.750.0G
THOMAS H. WAKEFIELD-
TRUST ACCOUNT
05-791-9
FIRST NATIONAL BANK
OF MIAMI IN
$11,700.00
Trf
WAKEFIELD, HEWITT &
9lgjlQQ . -00 WEBSTER-TRUST ACCT.
1*500^0 n-611-1
FIRST NATIONAL BANK
l 41 - 87 OF MIAMI
1,800.52 Trf
455.00 Trf
2,150.00
WAKEFIELD, HEWITT
WEBSTER-TRUST ACCT.
1-673
OUT
$1,727.
5,000 # .
KEY BISCAYNE BANK ^
26 $1,800.52 Trf
00. 455.00 Trf
3.5QP.Q.0
4,562.38
THOMAS H. WAKEFIELD-
SPECIAL ACCT
#2-1691
OUT KEY BISCAYNE BANK-
$ia)0£.Q2
PRESIDENT NIXON'S
KEY BISCAYNE PROPERTY
FIRST NATIONAL BANK
OF MIAMI
OUT
CASHIER'S CHECK
IN
HENRY WINSTON
MRS. NIXON
PLATINUM EARRINGS
£.560.
TOTAL $5,650.00
JANE HARRISON
TN
J. S. BACHE & CO.
STOCK
$3,454.49
SCHNEERS-MIAMI-
DIAMONDS
2,150.00
POOL
$ 10,100.00
1,500.00
027.26
y.inh.QQ
1.277.64
210. 78
1.519.50
OUT
t$ 90 . oo3rosemary WOODS
£ 560.0qJcASHIER'S CHECK
FROM RIGGS
NATIONAL BANK
REMODELING
$ 6.50801
1.654.00
1.681.00
11,978.84
OTHER
PUTTING GREEN - $ 243.57
BILLIARD TABLE - 1,138.80
FIREPLACE - 37586.00
ARCHITECTURAL “
MODEL FOR HOME - 395.65
SUMMARY
CONSTRUCTION & REMODELING -$45,621.15
OIL HEATER MAINTENANCE - 356.25
W ' TOTAL $45.977.40
1055
December 20, 1973, Rebozo testified that he received the second $50,000
contribution at his home in August 1970. 04
C. Initiator of First Delivery
On March 20, 1974, Mr. Rebozo testified before the Select Committee
that Danner had offered the $50,000 contribution to Rebozo on numer-
ous occasions after the 1968 election. 65 However, on May 10, 1973, Mr.
Rebozo told IRS agents that after the 1968 election, Rebozo could not
remember whether lie approached Danner or Danner approached him
about making the contribution. 66
Mr. Danner testified on Tuesday, December 18, 1973, that after the
1968 election in early 1969, Rebozo “needled” Danner about the fact
that the Hughes people had not made a substantial contribution to the
1968 campaign. Danner testified that in 1969 Rebozo asked Danner
whether Hughes would contribute funds to begin taking polls on candi-
dates for the 1970 congressional elections. 67 Danner also testified that
this occurred after Rebozo had refused Danner’s offer in early 1969 to
deliver the $50,000 contribution that had been promised for the 1968
campaign. 68
D. Purpose of the Money
On March 20, 1974, Mr. Rebozo testified that the two contributions
he received from Richard Danner were to be used for the 1972 Presi-
dential campaigns, since he “did not accept contributions from any-
body for anything else.” 09 However, on June 18, 1973, Rebozo appar-
ently told Kenneth Whittaker that the money Rebozo was taking out
of the safe deposit box in the Key Biscayne Bank was from Howard
Hughes and was to be applied to the Republican congressional elections
in 1970. 70 In addition, Rebozo apparently told Whitaker that a short
time after receiving the first contribution, he received another $50,000
from Richard Danner to be used for the same purpose. 71
Richard Danner has insisted throughout his staff interviews and his
sworn testimony before the Select Committee, that the funds he con-
tributed on behalf of Howard Hughes were requested by Rebozo to be
used for the 1970 congressional campaigns or for polls for those elec-
tions, and that this was the purpose of the contributions. 72 Robert
Maheu has testified that the purpose of the first $50,000 contribution
was to fulfill the pledge made in the 1968 campaign, and that the sec-
ond contribution was made to insure that the Hughes people had an
entree with the Nixon administration. 73
Finally, Richard Danner testified that in March or April 1972, he
received a telephone call from Bebe Rebozo, asking him if Howard
Hughes was going to make a contribution to the 1972 campaign. 74
64 See deposition of Charles G. Rebozo, Dec. 20, 1973, in Common Cause v. FCRP , p. 28.
65 21 Hearings 9954.
m See IRS interview, May 10, 1973, p. 2.
67 20 Hearings 9515.
68 Ibid .
69 21 Hearings 9960.
70 See letter from FBI Director Clarence Kelley to Commissioner Alexander of the IRS,
IRS files.
71 Ibid.
72 Danner interview, Aug. 30, 1973 ; 20 Hearings. 9515.
73 Robert Maheu interviews, Sept. 15, 1973, and Jan. 20, 1974,
74 20 Hearings 9540.
1056
E. Individuals Who Had Knowledge of the Receipt of the Hughes
Contribution
On March 20, 1974, Bebe Rebozo testified under oath to the Select
Committee that he had informed Rose Mary Woods of the Hughes con-
tribution shortly after he received it. 75
On May 10, 1973, Rebozo told Internal Revenue Service special
agents who were interviewing him that he and the two agents were
the only individuals who “knew about the money.” 76 Furthermore, on
July 10, 1973, Rebozo told Internal Revenue special agent John Bart-
lett and Revenue agent Bert Webb that he did not notify anyone of
the receipt of the money. 77
It was not until his October 8, 1973, interview with the Senate Select
Committee that Rebozo testified that he told Rose Mary Woods that he
had a contribution from Howard Hughes totaling $100,000 in his safe
deposit box which he shared with Thomas Wakefield. 78 In that inter-
view, Rebozo stated that he told Miss Woods about the contribution at
about the time he became apprehensive about retaining it. 79
In addition, Rebozo stated in that interview that he thought that he
told Herb Kalmbach at some point when discussing 1972 campaign
contributions that he received a 1968 contribution from Howard
Hughes. 80 Finally, in that same interview, Rebozo recalled that he also
informed President Nixon about the campaign contribution from
Howard Plughes in one of his visits at Key Biscayne after the 1972
election. 81
Then in Rebozo’s interview with the Senate Select Committee on
October 17, 1973, Rebozo stated that he did not discuss the contribution
with any other individuals besides Rose Mary Woods between the time
he received it and the time when he decided to return the contribution. 82
Rebozo added that- he talked with several other individuals about the
contribution after he had decided to return the money. 83 Rebozo also
testified that he talked to Herbert Kalmbach about the Hughes con-
tribution on April 30, 1973. 84
Then on March 20, 1974, Rebozo swore under oath before the Senate
Select Committee that President Nixon had counseled Rebozo to give
the money back in early 1973. 85
Rebozo also testified on March 20, 1974, that he discussed what he
should do with the money with William Griffin, a New York lawyer,
and the attorney for Robert Abplanalp. 86 Furthermore, Rebozo testi-
fied on March 20, 1974, that he had several discussions of the Hughes
contribution with Rose Mary Woods, and estimated that he discussed
it with her on three or four separate occasions. 87 Rebozo also stated in
an interview on October 17, 1973, that he told Miss Woods that the
75 21 Hearings 10000.
70 See Rebozo interview with IRS, May 10, 1973, p. 4.
77 See July 10, 1973, interview by IRS.
78 Rebozo interview, Oct. 8, 1973, p. 6.
79 Ibid.
80 Ibid .
81 Ibid.
82 Rebozo interview transcript, Oct. 17, 1973, p. 17.
83 Rebozo interview transcript, Oct. 17, 1973, p. 31, (third section).
84 Ibid.
85 21 Hearings 9994.
80 Ibid.
87 21 Hearings 10003.
1057
Hughes contribution was for the 1972 campaign and that he dis-
cussed the problems of the Hughes organization with her. 88
Miss Woods testified on March 22, 1974, “I don’t think we had several
discussions, there was nothing to discuss so far as I know.” 89 In addi-
tion, she testified that Rebozo never offered any details with regard to
the contribution 90 and that she did not know for which campaign the
contribution was intended. 91
Mr Rebozo also testified that he discussed the $100,000 with Thomas
H. Wakefield after he decided to return the money. 92 In addition,
Rebozo testified he told the President about having the Hughes money
sometime prior to March or April 1973, when the President visited
Key Biscayne, Fla. 93
On October 17, 1973, Rebozo told the Select Committee staff that
after he had decided to return the money, Rebozo mentioned the
Hughes contribution to John Ehrlichman and H. R. Haldeman. 94
Ehrlichman, however, said in a January interview that he did not
know anything at all about the $100,000 contribution until he read
about it in the newspaper in the fall of 1973. 95
Ehrlichman recalled that he did discuss the general subject of
Hughes contributions with Rebozo. Although he could not recall the
date, he recalled that Rebozo told him that the Hughes people had
misled him into thinking that they would make a very large contribu-
tion, but had ended up making a contribution very much under
$10,000. 96
Ehrlichman said that Rebozo had indicated to him that Rebozo had
received only a “de minimus” contribution from the Hughes people. 97
Then on March 21, 1974, Rebozo testified that neither Haldeman nor
Ehrlichman knew anything about the $100,000 in 1972 or 1973. Rebozo
testified that, “they knew nothing about it, to my knowledge.” 98
F. Conditions Under Which the Money Was Stored
On March 20, 1974, Rebozo testified that after receiving the cash, he
marked H. H. in the corner of the envelope containing the cash, wrote
a letter to Thomas H. Wakefield that was placed in the director’s safe
deposit box with instructions on what to do with the money should
anything happen to Mr. Rebozo, marked similar instructions on the
manila envelope containing the money, and placed the envelope in
his safe deposit box No. 224 at the Key Biscayne Bank. 99 However,
Rebozo also testified that he destroyed the original envelope in which
the Hughes money was contained “some time after the Hughes prob-
lem started and the campaign got underway.” 1 Rebozo also testified
that he destroyed the letters to Wakefield in the director’s box at a
88 Rebozo interview transcript, Oct. 17, 1973, pp. 48-49.
89 22 Hearings 10205.
90 22 Hearings 10206.
91 22 Hearings 10201.
92 21 Hearings 10064.
93 21 Hearings 10090.
94 Interview of Charles G. Rebozo, Oct. 17, 1973, p. 2.
95 See Ehrlichman interview, Jan. 10, 1974. p. 20.
90 Id. at p. 24-25.
97 Ibid.
98 21 Hearings 10066.
99 21 Hearings 9967-69.
1 21 Hearings 9971.
1058
later time. 2 Rebozo further testified that some time after he placed
the Hughes contribution in his safe deposit box, he took the bank wrap-
pers off of the money and placed rubberbands around the packets. 3
However, on March 21, 1974, Herbert Kalmbach testified that he
met Rebozo on January 8, 1974, and that Rebozo then told him :
Undoubtedly, Herb, I have not told you that after you
and I talked last spring regarding the Hughes money, I found
that I had not in fact disbursed any of the Hughes cash to the
several people I named. When I went into the safe deposit
box, I found that the wrappers around that cash had not been
disturbed, and so it was clear that no part of this money had
been used * * * 4
In addition, Ken Whitaker stated in an interview on November 20,
1973, that when he observed the counting of the money on June 18,
1973, “some of the packets were held together by rubberbands, while
others were in bank wrappers.” 5 Whitaker did not recall any identifi-
cation on the wrappers.
Mr. Rebozo also testified that Thomas H. Wakefield had a duplicate
key to safe deposit box No. 224, where the money was kept during the
entire time that the money was stored in a safe deposit box. 6 Rebozo
testified that some time during the period after he received the Hughes
contribution, he lost all of his keys to his safe deposit boxes and that
the locks were changed after he lost his keys. 7 Rebozo testified that he
gained access to box No. 224 on this occasion by requesting the second
key from Mr. Wakefield, so that Rebozo could get into the box. Rebozo
also testified that he gave Wakefield the replacement key for the new
lock after the new lock was installed. 8
However, Thomas H. Wakefield, under oath before the Senate
Select Committee on June 10, 1974, testified that Rebozo never came to
him to request his copy of the key of the safe deposit box No. 224, and
that he was never given any replacement key to get into the box after
the locks w 7 ere allegedly changed 9 Wakefield stated in an interview
that sometime in 1968 or 1969 Rebozo gave him a key to the safe
deposit box and told him that in case of Rebozo’s death, Wakefield
should open the box and follow the instructions. 10
Rebozo also testified that it was not the custom of the bank to ask
Rebozo to sign the access card each time he went into his safe deposit
boxes. Therefore, the same deposit box records produced by Rebozo did
not represent each time that he went into the box. 11
G. Other Contributions
On March 21, 1974, Rebozo testified that A. D. Davis made a $50,000
cash contribution to Rebozo on April 4 or 5, 1972. Rebozo further testi-
fied that he called the Finance Committee To Re-FJect the President
3 21 Hearings 9972.
3 21 Hearings 9985.
4 21 Hearings 10191.
6 Whitaker interview, Nov. 20, 1973, p. 3.
8 21 Hearings 10008.
7 21 Hearings 10012.
8 21 Hearings 10013.
9 24 Hearings 11289.
10 Wakefield interview, Oct. 18, 1973, p. 2.
11 21 Hearings 10016.
1059
after receiving the contribution and that the committee sent F red La-
Rue down to pick up the money. 12
However, Fred LaRue testified that he did not discuss any contri-
bution with Bdbe Rebozo until October 1972, and that on that occa-
sion, LaRue called Rebozo to request contributions for the Nunn cam-
paign in Kentucky at the request of John Mitchell. 13 In addition,
LaRue’s plane ticket showing the trip during which he picked up the
money from Rebozo is dated October 12, 1972. 14
However, on December 20, 1972, Rebozo testified in a civil depo-
sition that he received campaign funds for President Nixon’s reelec-
tion campaign from January 1, 1971 through April 6, 19*72, “which
have already been listed.” 15 It is interesting to note, however, that the
A. D. Davis contribution was never noted on any list of contributors
to the 1972 campaign, nor was any contribution from Davis acknowl-
edged by Maurice Stans, the chairman of the FCRP, until October 13,
1972. Rebozo also testified that he set up a separate bank account for all
contributions he received for the 1972 campaign. 16 However, Rebozo
testified before the Select Committee that he did not place the Hughes
$100,000 contribution nor the A. D. Davis $50,000 in the special ac-
count that he had set up. On July 10, 1973, Rebozo told IRS special
agent Jack Bartlett that “In 1972, Rebozo put all contributions re-
ceived by him in the bank account (special bank account he set up for
contributions).” 17 In addition, Mr. Rebozo also testified on December
20, 1973, that aside from the Kislalc contribution and the Hughes con-
tribution, that lie received other contributions, but those were “others
that are reported, but they are a matter of record.” 18 Rebozo added,
“I believe, however, they are subsequent to the April 7 date.” 19
Then, Rebozo was asked :
Q. There should be no pre- April 7, 1972 contributions that
are not in the material you submitted. Is that correct ?
A. That’s correct, to the best of my recollection. If you are
getting at something specific you want to ask me about, go
ahead. 20
On March 20, 1974, Rebozo was asked if Herbert Kalmbach asked
him to see any specific individual with regard to contributions for the
1972 campaign. Rebozo replied, “Yes. I think that later on, I don’t
know whether it was 1969 or 1970 — it might have been 1970- — he asked
me to make an appointment with him with a couple of people that I
knew'. One v T as Paul Getty and another was Raymond Guest.” 21 Re-
bozo also testified that the purpose of contacting these individuals was
for the purpose of obtaining contributions for the 1972 election. The
following exchange occurred :
Mr. Lenznek. Had you been asked by anybody else to speak
to Mr. Getty yourself ?
12 21 Hearings 10117.
13 23 Hearings 11152.
14 26 Hearings, exhibit 47.
15 Civil deposition of Charles G. Rebozo, Dec. 20, 1973, Common Cause et al. the FCRP ,
P- 4.
18 Id. at pp. 8-9.
17 See IRS interview, July 10, 1973.
18 Civil deposition, op. cit. at note 15, pp. 54-55.
Ibid.
20 Id. at p. 56.
21 21 Hearings 9974.
1060
Mr. Bebozo. No.
Mr. Lenzxer. You had not been requested by anybody
else to seek to obtain money from Mr. Getty ?
Mr. Bebozo. No. 22
However, in a memorandum dated on February 17, 1969, from H. B.
Haldeman to John Ehrlichman, Mr. Haldeman stated that Bebe
Bebozo has been asked by the President to contact J. P. regarding
major contributions. 23
Herbert Kalmbacb testified on March 21, 1974, that Bebozo had
asked Kalmbach to solicit from Mr. Getty funds for the 1970 sena-
torial campaign program. 24 Kalmbacb also testified that Bebozo “set
it up for him to see Mr. Getty in Europe.” 25
On November 9, 1973, H. B. Haldeman told the staff in an inter-
view that he recalled that Bebozo was responsible for raising funds
from former Senator George Smathers and his friends “and may have
been the J. P. Getty contact.” 26
In addition, Bebozo testified that be sent leftover 1968 campaign
funds from the Florida Nixon for President Committee to Herb
Kalmbach pursuant to Kalmbach’s request. Bebozo testified that he
did not know what Kalmbach was going to do with the money :
* * * I wasn’t concerned with the purpose. He was just a
little late in asking me and I thought everything was
paid * * * 27
Kalmbach testified that Bebozo had a special account in Key Bis-
cayne that had leftover 1968 campaign funds in it. Kalmbach said he
asked Bebozo to send these funds to him in order to pay Caulfield and
Ulasewicz. Before requesting this money from Bebozo, however, Kalm-
bach said he first cleared this procedure with John Ehrlichman. Kalm-
bach recalls that Ehrlichman approved that the funds Bebozo held
from 1968, should be used to pay Caulfield and Ulasewicz. Kalmbach
testified that he discussed the need for these funds with Bebozo and
that Bebozo specifically knew they were for Caulfield and Ulasewicz. 28
H. Beturn of the Money
Mr. Bebozo testified on March 20, 1974, that he first decided to re-
turn the Hughes contribution in March of 1973. 29 Bebozo also testi-
fied that he began trying to contact Danner in order to convince Danner
to take the money back “around March or April” 1973. 30 However,
later on at the same executive session, Bebozo testified that he in fact
made no efforts to contact Danner to have him take the money back
until after he met with the Internal Bevenue Service. 31
Mr. Bebozo’s first interview with the Internal Bevenue Service was
not until May 10, 1973, thereby placing his efforts to have Danner
take the money back after that date. Bebozo also testified that after
he talked to the IBS, William Griffin was the first lawyer to whom
22 Ibid.
23 26 Hearings, exhibit 15.
24 21 Hearings 10181-82.
25 Ibid.
28 Haldeman interview, Nov. 9, 1973, p. 2.
27 21 Hearings 9947.
28 23 Hearings 10861.
29 21 Hearings 9989.
30 21 Hearings 10065.
31 21 Hearings 10091.
1061
he spoke about the money . 32 Eebozo also said that the time at which
he first spoke to the lawyers that he mentioned in his testimony was
after he met with the Internal Eevenue Service . 33
In his first interview with the Internal Eevenue Service on May 10,
1973, Eebozo asked the agents interviewing him “what he should do
with the money — whether he should give it to us [the agents] .” 34 In
that same interview, Eebozo also told the agents that, “he had con-
sidered calling Danner several times and offering to return the money,
but that he had never done so because he was afraid that he would
create some additional publicity.” 35
On October 17, 1973, Eebozo told the Select Committee staff that
he had decided to return the Hughes contribution prior to his dis-
cussion on April 30, 1973, with Herbert Kalmbach. In addition, on
October 17, 1973, Eebozo stated, “I know I had a little trouble trying
to get it back, and exactly when that was I don’t know, but it prob-
ably was in 1973, it’s very likely that it was. And once that decision
was made, I’m sure I mentioned it to a number of people, but up until
then, even Wakefield himself who was on the box didn’t know, well
not up until the time we took the money out he didn’t know what he
was on that box for.” 36 Eebozo also testified on that occasion that
it was March or April 1973 when he first told Danner that he wanted
to return the money.
In addition, Eebozo testified about his meeting with Herbert Kalm-
bach as follows:
Lenzner. Yes ; how about Mr. Kalmbach, did you ever dis-
cuss this with him ?
Eebozo. I probably told him about it. He was involved
in * * * saw him several times at the White House * * *
and in California.
Lexzxf.ii. And do you remember how it was, were you
seeking his advice or counsel ?
Eebozo. I don’t think so. I think it was just a general dis-
cussion. You see, Kalmbach and I have business discussions,
naturally on the San Clemente interest. He and I worked
on the Yorba Linda House . 37
Eebozo later on testified further about his meeting with Kalmbach :
Lexzxer. Do you recall if the two $50,000 contributions
came up?
Eebozo. Yeah; I believe I told him about it * * * that
may be.
Lenzner. Do you recall specifically what you told him
about it ? And why you told him at that time ?
Eebozo. No other than, I mean, he had been involved in
fundraising and it wasn’t going to be any secret. I guess I just
told the key people that should know about it.
Lexzxf.i;. Diet you ask whether you should send the money
back, did that question arise ?
32 21 Hearings 10092.
33 iua.
34 See Internal Revenue Service interview, May 10, 1973, p. 2.
35 Id. at p. 4.
36 Rebozo interview transcript, Oct. 17, 1973, p. 18.
37 Id. at p. 19.
1062
Rebozo. Well, that was April 30, 1973, and I think the de-
cision was already made then. If I did ask, it was just for
his opinion.
Lenzner. Since you had already decided, did you com-
municate — tell him that you had already decided to send the
money back ?
Rebozo. I don’t know. No. Because as I recall the part about
the Hughes money — it was just an irrelevant part of the
conversation.
Lenzner. The purpose of the meeting was not to discuss
that.
Rebozo. No.
Lenzner. Did he ask you specifically about the Hughes
money? Kalmbach?
Rebozo. He didn’t ask me. I told him and I think that’s
the first time that I told him. I’m not sure, it may have been
earlier. I don’t know. Just like there may have been some
others I told at that time. It’s a bit of a dilemma. I hated to
see it go back if it could be used. But I had clung to vain hope
longer than perhaps I should have.
Lenzner. Did you have other discussions with Kalmbach ?
Rebozo. I don’t think so.
Lenzner. Do you remember any reaction that Kalmbach
had at that time when you told him about the funds?
Rebozo. No. I can’t say that I do.
Lenzner. Was he concerned that there may have been a
problem your having received these funds — any concern about
that?
Rebozo. I don’t know. I think he had enough. I think he
had enough concern of his own to be concerned about the fact
that I had * * * I don’t recall.
Lenzner. Did he discuss any of his problems he w T as facing?
Rebozo. No ; I was reading about his.
Lenzner. Did he seem surprised to learn of these funds or
did he appear to know about them ?
Rebozo. If he was I don’t recall his showing it. I think in
the campaign as I told you last time, that I was asked, if
Hughes had made a contribution in 1968. I said he had.
But nobody questioned that a check turned in. In 1972 I
handled this as best I could.
Lenzner. Who asked you about the Hughes thing * * *
Rebozo. I think that Herb did, can’t be sure, but I think he
had . 38
Richard Danner testified on Tuesday, December 18, 1973, that the
first occasion on which he was informed that the money had not been
used and that Rebozo wanted to return the money, was on May 18,
1973, at the Madison Hotel in Washington, D.C., in a discussion that
Danner had with Rebozo. 39 Mr. Danner also responded to further
questioning about the return of the money as follows :
38 Rebozo interview transcript, Oct. 17, 1973, pp. 20-21.
39 20 Hearings 9546.
1063
Lenzner. Did Mr. Rebozo indicate whether he had dis-
cussed the return of the money with anybody else ?
Danner. No, he didn’t mention that. And I asked him if
he had consulted with an attorney or tax man or anyone of
that sort, and he said no, he hadn’t and I suggested that he
had better do that. 40
On March 28, 1974, William Griffin testified under oath before the
Senate Select Committee that lie met with Bebe Rebozo in either late
April or May 3, 1973, and that Mr. Rebozo explained to him that he
had $100,000 in a safe-deposit box at the Key Biscayne Bank and that
the money was the same money he had been given in 1969 and 1970. 41
Griffin could not recall whether Mr. Rebozo said that he was going to
meet with the Internal Revenue agents or he had just met with them. 42
Griffin placed the date of his first meeting with Rebozo in late April
1973, but his first airplane ticket showing a trip down to Key Biscayne
f rom New York was dated May 3, 1973. 43 However, both of those dates
are prior to May 10, 1973, when Rebozo first met Internal Revenue
agents and told them that they were the only ones that knew that the
money was still in the safe-deposit box in the Key Biscayne Bank.
On March 21, 1974, Herbert Kalmbach testified that on the evening
of April 29, 1973, he received a call from Bebe Rebozo who requested
a meeting with him the following morning. 44 Kalmbach said that he
met with Rebozo on the following morning, April 30, 1973, at about 8
in the morning and after they discussed such matters as refinancing of
San Clemente and the President’s taxes, Rebozo asked Kalmbach if he
could go on “attorney-client basis” “in discussing a personal problem.”
Kalmbach testified that Rebozo said “the President had asked him to
speak to me about this problem and not Maurice Stans.” 45 Kalmbach
stated that Mr. Rebozo said the IRS had scheduled a meeting with him
on the subject of a $100,000 contribution from Howard Hughes which
Mr. Rebozo received in 1969 and 1970. 46 Kalmbach then testified that
Rebozo said that “he had disbursed part of the funds to Rose Woods,
to Don Nixon, to Ed Nixon and to unnamed others during the
intervening years * * *” 47 Kalmbach further testified, “In response to
my questions, he reiterated that the money had been given to him as a
contribution by Hughes, and that the expenditures he had made to sev-
eral individuals including Rose and the President’s two brothers had
come from the Hughes cash.” 48
Kalmbach then testified that he advised Rebozo to get the best tax
lawyer he could and to lay out the facts exactly to the Internal Reve-
nue Service. Kalmbach said that Rebozo replied to his advice, express-
ing grave reservations about following it for the stated reason that,
“This touches the President and the President’s family and I can’t
do anything to add to his problems at this time, Herb.”
40 20 Hearings 9547 .
41 22 Hearings 10429 .
42 22 Hearings 10430 .
43 22 Hearings 10428 .
44 21 Hearings 10188 .
45 21 Hearings 10189 .
48 TUd.
47 Ibid.
48 IUd.
1064
Kalmbach testified that he checked with another attorney, Stanley
Ebner, in the White House, who agreed completely with his advice
when presented in a hypothetical context. 49
Kalmbach stated that he met Mr. Rebozo again the following morn-
ing, May 1, 1973, at around 8 :30 a.m. Kalmbach testified that he began
to recount his visit with Stan Ebner, but before he had finished,
Rebozo “cut short further discussion with a somewhat baffling com-
ment that he saw no problem but he thanked me for my thoughts.” 50
Kalmbach also testified that he had a third meeting with Bebe
Rebozo on Tuesday, January 8, 1974, at about 8 :30 in the morning
at the San Clemente Western White House. 51 Kalmbach recalled that
at one point toward the end of his meeting on January 8, Rebozo told
him words to the effect that :
Undoubtedly, Herb, I have not told you that, after you
and I talked last spring regarding the Hughes money, I
found that I had not in fact disbursed any of the Hughes
cash to the several people I named. When I went to the safe-
deposit box, I found that the wrappers around that cash had
not been disturbed, so it was clear that no part of this money
had been used during the several years it was in my box. 52
In an affidavit sworn on May 14, 1974, Mr. Jim O’Connor, Kalm-
bach’s attorney, stated that following Kalmbach’s meeting with Rebozo
on or about April 30 :
Mr. Kalmbach discussed with affiant [Jim O’Connor] the
fact that after discussing the San Clemente matter and the
handling of the tax affairs of the President, and after stating
that the attorney-client relationship did indeed exist, Mr.
Rebozo advised Mr. Kalmbach that he had given some of the
$100,000 in question which had been given to him by Danner,
to Rose Mary Woods and to the Nixon brothers, and Mr.
Rebozo asked Mr, Kalmbach what he should do. 53
In addition, Margaret C. Blakely, Jim O’Connor’s secretary, filed an
affidavit on May 15, 1974, which stated that on or about the middle of
October 1973, she was asked by Mr. O’Connor to call Mr. Rebozo to
inform him that Mr. Kalmbach had been questioned by the Special
Prosecutor’s office and by Terry Lenzner on October 11 and 12 con-
cerning a meeting on April 30, 1973 with Mr. Rebozo :
* * * and Mr. Kalmbach acknowledged the meeting took
place at or about that time; Mr. Kalmbach further advised
both investigating parties that the prime purpose of the meet-
ing was to review certain matters involving the President’s
personal affairs, including the sale of the Whittier property
and the refinancing of the San Clemente property, among
other things ; that Mr. Kalmbach was disturbed about reports
that campaign funds were used in the acquisition of the San
Clemente property, etc. 54
" iua.
60 21 Hearings 10190.
61 21 Hearings 10191.
^ Ibid.
63 See O’Connor affidavit, 26 Hearings, exhibit 49.
54 See Blakely affidavit, 26 Hearings, exhibit 50.
1065
Blakely also swore that on or about January 25, 1974, she was again
asked to contact Rebozo, and when Mr. Rebozo returned her call, she
read to him a memorandum as follows :
If Mr. Kalmbach is pressed as to any details of a conver-
sation between himself and Mr. Rebozo on April 30 and/or
May 1, he, of course, would have to tell the truth ; that in the
unlikely event he is pressed on this matter he will of course
state that these discussions were pursuant to the attorney-
client relationship and therefore subject to the attorney-
client privilege. 35
On March 20, 1974, the following exchange occurred during Mr.
Rebozo’s testimony :
Mr. Lenzner. Did you ever make the statement to anybody
that you had used the money or had somebody else use it on
behalf of other individuals ?
Mr. Rebozo. No, sir. I don’t think anybody else did, either . 56
Rebozo also testified on March 21, 1974, that, lie ran into Herb Kalm-
bach at the White House on Api'il 30, 1973, and asked for his judgment
on whether or not Rebozo should return the money. 57 Then the follow-
ing exchange occurred on March 21, 1974 :
Mr. Lenzner. Did you explain to him again that you had
received the funds and that you had kept them and why you
kept them ?
Mr. Rebozo. I think I passed over that.
Mr. Lenzner. And I take it you did tell him you kept it
because you were asking for his judgment on whether you
should return them or not ?
Mr. Rebozo. That’s right.
Mr. Lexzner. Did you ask him to do anything other than
giving you his judgment at that time ?
Mr. Rebozo. No.
Mr. Lenzner. Did you ever discuss with him again the
$100,000 contribution from Hughes ?
Mr. Rebozo. I don’t think so. I’ve seen very little of him.
That may be the last I saw him.
There was further discussion on March 21, about Rebozo’s meet-
ings with Kalmbach. The exchange follows :
Mr. Lexzner. We talked, I think, to Mr. Kalmbach some
time in October or November of 1973. Did he ever advise you
of those discussions ?
Mr. Rebozo. No, I don’t think so. I don’t know I don’t think
I’ve seen Kalmbach — yes, I did see him once in California
since that meeting we just referred to [April 30, 1973].
That simply had to do with the grounds, the Presidential
grounds out there, the certain repairs that need to be made
and so on.
Mr. Lenzner. There was no discussion on that occasion
about the Hughes contribution of $100,000 %
Mr. Rebozo. No.
55 Id. at p. 2.
56 21 Hearings 9998.
57 21 Hearings 10112.
1066
Mr. Lenzner. I’m sorry, sir ?
Mr. Rebozo. No.
Mr. Lenzner. You told him, then, on April 30, that, basi-
cally that you had retained the same funds that had been given
to you previously. Did you tell him when you had received
these funds — Mr. Kalmbach, on April 30, Mr. Rebozo?
Mr. Rebozo. No. Actually at that time I wasn’t even sure
when I’d received it. That was established later.
Mr. Lenzner. And you did tell him that they were the same
funds and you wanted to know what to do about it?
Mr. Rebozo. Yes. 58
Later, on March 21, Rebozo was asked if he ever discussed with
Haig, Garment, Ehrlichman, Griffin, and Kalmbach the issue of
whether the funds had been used or not. Mr. Rebozo replied, “That
was not an issue. They had not been used. I still have the funds.” Lenz-
ner added, “So the answer is, ‘no,’ you had never discussed that with
any of those individuals?” Mr. Rebozo replied, “No.”
Rebozo also testified on March 21, 1974, that he had no financial or
business transactions with Edward Nixon, the President’s brother. 59
Rebozo denied that he had given Edward Nixon any gifts in excess
of $1,000.®° Rebozo also denied that he ever had any financial or
business transactions with Rose Mary Woods except for the Fisher’s
Island transaction. 61 Rebozo also denied that he had ever given money
in excess of $1,000 to Rose Mary Woods. 62 Rebozo denied ever furnish-
ing any money to F. Donald Nixon. 63
Rebozo also testified that he had not given any gifts of cash or
stock or any other negotiable commodity of value in excess of $1,000
to President Nixon. 64
I. Camp David Meeting
On March 21, 1973, Rebozo testified that he recalled meeting Richard
Danner in Washington in May 1973, but he did not recall asking Dan-
ner to come to Washington for the meeting. 65 Rebozo also testified that
after talking to Danner on May 18th or 19th, Rebozo decided to have
President Nixon talk personally to Danner about the “mood of the
people” he was seeing in Las Vegas, and so he called an aide to have
him bring Danner up to Camp David in a courier car. 66 Rebozo also
testified that he asked the President to come over to Rebozo’s cottage
to have Danner relate to the President the mood of the people of the
West. 67 Rebozo testified that he did not recall that the President was
present at the meeting for more than 10 minutes. 68 Rebozo could also
not recall the kind of day it was on Danner’s visit, nor did he recall
taking a walk with Danner and President Nixon on the Camp David
grounds. 69
68 21 Bearings 10112 - 13 .
59 21 Hearings 10134.
*> IUd.
61 Tbid.
82 Ibid.
83 21 Hearings 10120.
04 21 Hearings. 10133.
85 21 Hearings 10093-94.
80 21 Hearings 10094.
67 21 Hearings 10095.
68 21 Hearings 10095 and 10098.
69 21 Hearings 10099.
1067
Richard Danner testified on December 18, 1973, that Rebozo had
been “wanting to see me” prior to Danner’s coming into Washington
on May 18, 1973. Danner also testified that Rebozo told him that Presi-
dent Nixon wanted to talk to Danner, and that he was picked up by a
car and driven to Camp David on May 20, 1973. 70 Danner testified
that he met with Rebozo and the President beginning around 12 noon,
and that :
* * * we talked in the room for perhaps an hour. And then
we took a walk. I remember it, because it was misting rain,
and I didn’t have a raincoat, but we took quite a walk around
the compound, and he was showing me various places and
what was being done. And this probably lasted until 2
o’clock, something like that. 71
Danner reconfirmed his testimony of December 18, 1973, in another
executive session on June 11, 1974, in which he detailed the walk that
he and President Nixon and Rebozo took around the compound. 72
Danner also testified that his meeting with President Nixon was cer-
tainly more than a 5-minute meeting. 73 Finally, weather reports indi-
cate that on May 20, 1973, a light rain fell on Camp David, Md. 74
J. IRS Investigation
Mr. Rebozo testified in the morning of March 21 that he first learned
about the IRS investigation into the Hughes matter when “the agent
called * * * from Las Vegas and wanted to come and see me, and we
set. up an appointment.” 75 Rebozo denied that he ever talked with
Ehrlichman about the $100,000 contribution or that Ehrlichman ever
called to alert, him that the IRS would soon call and request an inter-
view about the Hughes matter. 76
However, in the afternoon session on March 21, Rebozo testified:
* * * I think that perhaps I ought to correct a misunder-
standing I may have made to Senator Weicker earlier, be-
cause I was asked about Ehrlichman and I do recall that
Ehrlichman did mention the IRS to me. I didn’t recall
any specific conversation, but now I do remember that he
[Ehrlichman] had said something about, the IRS was going
to check this out * * * 77
Mr. Ehrlichman testified on February 8, 1974, that he called Mr.
Rebozo at the request of Roger Barth of the IRS to notify Rebozo
that the IRS wanted to interview him about “whether or not Rebozo
had received funds from the Hughes organization * * * 78
Finally, Roger Barth, testified that he called Rebozo to notify him
of the IRS request for an interview. 79 Barth testified that he acted at
Ehrlichman’s request. 80
70 20 Hearings 9548.
71 20 Hearings 9549.
72 24 Hearings 11472.
73 Ibid.
74 NOAA weather report for Catoctin Mountain Park.
75 21 Hearings 10067.
76 21 Hearings 10068.
77 21 Hearings 10090. It should he noted that Mr. Rebozo and Mr. Ehrlichman presently
retain the same counsel, Mr. William Snow Prates of Miami, Fla.
78 21 Hearings 9680.
79 23 Hearings 11231-32.
80 Ibid.
1068
XII. SUMMARY
The transmittal of $100,000 in $100 bills from Howard Hughes to
President Nixon’s close friend, Charles G. Rebozo, several years prior
to the 1972 election, reflects a number of classic issues inherent in the
furnishing of large cash contributions to political campaigns :
1. Wiry were cash funds furnished to a close friend of the
President rather than to any campaign official or organization?
2. Why were the funds contributed several years prior to the
1972 campaign for which they were allegedly intended, especially
since Howard Hughes ultimately contributed another $150,000
in 1972 to the Finance Committee To Re-Elect the President?
3. Did Howard Hughes profit in any way by his contribution to
Rebozo on behalf of the President ?
Mr. Rebozo’s testimony about the matter steadfastly rejects any
notion of impropriety in his receipt and handling of the two $50,000
cash contributions. He has testified :
— that he finally agreed to accept the Hughes contribution in 1970
after rejecting it many times in 1968 and 1969 because of the
possible embarrassment it might cause President Nixon;
— that the contribution was intended solely for the President’s
1972 reelection campaign ;
— that he placed the two $50,000 cash contributions in his safe-
deposit box without counting them and with instructions to his
attorney to turn the money over to the President’s campaign in
case anything happened to Rebozo ;
—that he subsequently destroyed these instructions sometime after
the December 1970, split between Hughes and Maheu, thereby
leaving $100,000 in $100 bills in his safe-deposit box with no
evidence of the money’s origin or purpose ;
— that he subsequently removed the wrappers with the words “Las
Vegas” from the money and wrapped the money in rubberbands
while again not counting the money ;
— that he did not use any of this money for any purpose, and that
he returned the same identical $100 bills to Mr. Hughes in the
spring of 1973 ;
— that he told only Rose Mary "Woods of the receipt of the funds
until after the 1972 election, when lie informed President Nixon,
and that he informed others of the contribution after he decided
to return the money ; and
— that he had no discussions about the money with President
Nixon and Mr. Danner on May 20, 1973, at Camp David, de-
spite the fact that the meeting occurred after Rebozo had de-
cided to return the money and before Danner agreed to accept it.
Indeed, Rebozo has maintained in all his testimony that his initial
apprehension over accepting the cash contribution from Howard
Hughes was exacerbated by the very public conflict that had erupted in
late November 1970, between Robert, Maheu and Howard Hughes. Had
Rebozo understood the funds to be intended for the congressional races,
he could easily have turned them over to the appropriate congressional
campaigns prior to the conflict that later caused him such apprehen-
sion. And while the publicized confrontation between the Hughes fac-
tions may have deterred Rebozo from applying the funds to any cam-
1069
paign for 3 to 4 years, Rebozo testified that he never once attempted to
contact any representative of Hughes, any representative of the Repub-
lican National Committee, or any representative of the President’s re-
election campaign to seek advice with regard to the funds until well
after. the 1972 Presidential election.
In fact, in early 1972, Rebozo began receiving and accepting a variety
of contributions, properly established a bank account for such funds,
and acknowledged the receipt of such funds to both the donors and the
Finance Committee To Re-Elect the President. At no time, however,
did he acknowledge in writing to Hughes or his representatives the
receipt of the $100,000 nor did he ever notify, as he did with other con-
tributions in 1972, any campaign officials the receipt of $100,000 until
after the election. While Mr. Rebozo has always maintained that the
funds were intended for the President’s campaign, he has also testified
that he maintained the $100,000 well after the 1972 election because he
believed it could be used for the 1974 congressional campaign or 1976
Presidential election.
Mr. Rebozo also insists that he never discussed the contribution
with the President until well after the 1972 election and that Danner
is mistaken in stating that he, Rebozo and the President met in 1968
and discussed the possibility of obtaining a contribution from Howard
Hughes. Rebozo has testified that while he met with Mr. Danner on
May 18 and May 20, 1973, in Washington to discuss the return of the
contribution, at no time was the contribution discussed in the pres-
ence of President Nixon on May 20 at Camp David. Rebozo concedes
that one of the issues discussed with Danner both at a hotel in Wash-
ington and at Camp David before the President arrived was his
desire to return the funds to Danner, but Rebozo insists that the only
topic discussed after the President arrived was Danner’s perception
of the mood on the west coast with regard to Watergate. The President,
of course, knew by the time he met with Danner at Camp David that
Rebozo had in fact been the recipient of a substantial contribution
from the Hughes organization. The President, therefore, would have
been fully aware that he was in the presence of the principals who
had been involved in a contribution in which the IRS had suddenly
expressed an interest. In any event, President Nixon, through his press
spokesman, has denied any conversation ensued during that meeting
with regard to the Hughes $100,000.
In addition of course, the committee received evidence indicating
that the President, prior to his meeting on May 20, 1973, with Danner
and Rebozo, requested Rebozo to discuss with Herbert Kalmbach the
issue of the receipt, use, and possible return of the Hughes $100,000
on or about April 30, 1973. The committee also received testimony from
Larry Higby that on or about April 30, 1973, H. R. Haldeman told
Higby that the President informed Haldeman that Rebozo had avail-
able approximately $400,000 to defray legal fees for both Haldeman
and John Ehrlichman.
Much of the above information was contained in a letter Chairman
Ervin and Vice Chairman Baker sent to the President’s counsel, Mr.
St. Clair on June 6, 1974. This letter contained additional specific
information including evidence that the President requested that Mr.
Rebozo contact J. Paul Getty regarding major contributions, evidence
that Rebozo maintained a fund in Key Biscayne to take care of “ad-
1070
ministration-connected costs,” and a list of specific expenditures on
behalf of the President exceeding $50,000 that were ordered and paid
for by Rebozo. These listed expenses on President Nixon’s Key Bis-
cayne properties included substantial alterations of the President’s
home and construction and equipping of a pool for the President. In
his letter on behalf of President Nixon, dated June 20, 1974, St. Clair
conveyed “the President’s assurance that he never instructed C. G.
Rebozo to raise and maintain funds to be expended on the President’s
personal behalf, nor, so far as he knows, was this ever done.” In addi-
tion, the President through St. Clair declined to comment with regard
to any of the expenditures amounting to over $45,000 that Rebozo
furnished on behalf of the President.
On the basis of the evidence reflected in the letter to Mr. St. Clair,
Chairman Ervin sought to provide Rebozo with an opportunity to
furnish information and documents to assist the committee in review-
ing the evidence obtained by the staff. On one occasion in fact. Rebozo
and his counsel agreed to provide the committee with certain docu-
ments the committee had sought through subpena and to provide
additional information through testimony. Instead of complying with
the subpena and furnishing the documents pursuant to the agreement
entered into, however. Rebozo and counsel moved to quash the sub-
pena both in court and before the committee. The committee, bv unan-
imous vote, reiected Rebozo’s application and the Federal District
Court for the District of Columbia recently denied an effort to enjoin
the committee’s subpena and investigation of Rebozo. Indeed when an
additional subpena and letter was issued by Chairman Ervin in an
effort to obtain Rebozo’s responses to questions based on the above-
described information. Rebozo was in Europe and, therefore, unavail-
able for the process of the subpena. As a result, certain crucial testi-
mony and documentation which was deemed necessary by the com-
mittee to clarify the factual matters related in this report have been
denied the committee and the discrepancies and conflicts in testimony
have not been finally resolved.
As a result, the committee has before it evidence which suggests a
number of possible alternative resolutions of the factual material
presented herein :
1. That Rebozo paid for the President’s expenses out of his
own funds. Since Rebozo declined to furnish the committee with
all personal documents and with the pertinent documents from
his bank, the committee has been unable to make a judgment with
regard to this matter except to the extent of determining, based
on the records that were provided by Rebozo, that the great portion
of expenditures made for the President were not made out of
Rebozo’s bank account, and those made in currency were not
made from Rebozo’s personal funds derived from known sources.
2. That, the President in effect paid for these expenses himself
by later reimbursm.o- Rebozo. IVhile Rebozo’s refusal to produce
records and the President’s failure to respond to specific issues
in the letter of June 6 has hampered the committee’s ability to
make a judgment on this issue, the committee finds only one
reimbursement, the $13,642 check discussed in the bodv (if the
report. Moreover, the committee notes that the Coopers & Lybrand
1071
report to the President made no mention of any outstanding
liabilities due Rebozo.
3. That Rebozo paid for the expenditures on behalf of the
President from another source of funds. The testimony and
evidence before the committee indicates that the only other
sources of funds available to Rebozo were campaign contributions.
Again, the failure of key witnesses to comply with subpeffas
frustrated the committee’s efforts in conclusively resolving this
issue.
The Select Committee diligently attempted to determine which one
of these three alternative conclusions is accurate.
It could have undoubtedly made such a determination if Rebozo had
made all of the records controlled by him or his bank relating to these
matters available to the committee or if the President had availed
himself of the opportunity to clarify or explain these matters which
was extended to him in the June 6, 1974, letter from Senator Ervin,
the committee chairman, and Senator Baker, vice chairman, to his
lawyer, Mr. St. Clair.
Mr. Rebozo persisted in his refusal to make records controlled by
him or his bank relating to these matters available to the committee
and placed himself beyond the reach of the committee by traveling to
Europe when he had reason to know that the remaining life of the
committee precluded it from enforcing further subpenas on him or
others.
And unfortunately, the President did not avail himself of the
opportunity to clarify or explain the matters arising out of his deal-
ings and relationship with Rebozo.
In view of the above, the committee finds it appropriate that the
matters set forth herein be pursued further by relevant investigative
bodies.
XIII. LEGISLATIVE RECOMMENDATIONS
1. Communications between the White House and the Internal
Revenue Service should be more strictly regulated. Specifically:
(a) Any requests, direct or indirect, for information or action
made to the IRS by anyone in the Executive Office of the
President, up to and including the President, should
be recorded by the person making the request and by the
IRS. Requests and responses by the IRS (i.e. whether in-
formation was provided), should be disclosed at least once
a year to appropriate congressional oversight committees ;
(b) On “sensitive case reports,” which cover special cases, the
IRS should be permitted to disclose to persons in the Ex-
ecutive Office of the President, up to and including the
President, only the name of the person or group in the
report and the general nature of the investigation ;
(c) All persons in the Executive Office of the President, up to
and including the President should be prohibited from
receiving indirectly or directly any income tax return;
(d) All requests for information or action and all IRS re-
sponses should be disclosed periodically to the appropri-
ate congressional oversight committees.
35-687 0 - 74 - 69
1072
There were numerous efforts by the White House to use the IRS for
political purposes between 1969 and 1972. Particularly striking ex-
amples, such as attempts to use the IRS to harass persons perceived as
“enemies,” have already been exposed and discussed at great length by
the Select Committee and other groups. In addition, there was misuse
of the IRS by the White House regarding the IRS investigations of
Rebozo, the President’s brothers, and people connected with the Hughes
operation. Because of the close relationship of several of the parties
to the President, questions of improper White House influence in this
case are particularly acute.
Recommendation (a) was prompted by examples of 'White House re-
quests made regarding, among others, Larry O’Brien. In the spring of
1972 the IRS Commissioner, Johnnie Walters, decided to postpone
until after the November election any further investigation of several
people who had close relations to prospective Presidential nominees.
These people included Larry O’Brien, the President’s brothers, and
Charles G. Rebozo. The decision was made as an effort to avoid any
charges that the investigations were politically motivated. Roger
Barth, then Assistant Commissioner of the IRS and a source of in-
formation for the White House, had told John Ehrlichman that
O’Brien, the Nixon brothers, and Rebozo were or would be under
investigation. At some point in the spring of 1972, Barth gave Ehrlich-
man a copy of a sensitive case report listing these names as subjects
of interest to the IRS.
Although it is not clear whether Ehrlichman was told about Wal-
ters’ decision to postpone the investigations, it is clear that Ehrlich-
man pressured Barth, Walters, and George Shultz, Secretary of the
Treasury, into pursuing intensely the O’Brien investigation in the
hope that information damaging to O’Brien might be uncovered be-
fore the election. Understandably, Ehrlichman did not push the IRS
on the investigations of Rebozo or the Nixon brothers. O’Brien was
pursued and interviewed, but Rebozo and the Nixon brothers were
not.
Rather than trying to ban such requests from the White House
or delineate those requests that are proper, the most straightforward
approach is to require disclosure of all requests. Those that are clearly
improper, such as the Ehrlichman request on O’Brien, are less likely
to be made if the requesting party knows they will be disclosed to
Congress. There have been, of course, proper White House requests to
the IRS in this and preceding administrations. There is no reason to
think that the effective functioning of the White House or the IRS
will be impaired by the disclosure of such requests.
Recommendation (b) was prompted by the Select Committee’s dis-
covery that sensitive case reports on people involved in some way
with Hughes were given regularly to John Ehrlichman by Roger
Barth, apparently without the knowledge of Barth’s superiors, includ-
ing Commissioner Walters. Because some of those reports touched upon
Rebozo and possibly on the President himself, the potential value
of those reports to the White House is obvious. There is no sound
policy reason for providing the White House with the details of on-
going investigations, and such disclosure could seriously mar the
IRS’s reputation for impartiality.
1073
There are, however, legitimate reasons for providing the White
House with enough information on sensitive cases to identify the per-
son or group involved and the general nature of the IRS inquiry. For
example, if the President were considering someone for appointment
to a high Federal position, he should be able to know whether that
person’s tax status is under any particular scrutiny. Similarly, the
President should be able to learn whether any of his aides or intimates
are under investigation. Limiting disclosure by the IRS to identifica-
tion of the party under investigation and a general statement about
the investigation should provide enough information for the White
House to decide what to do about the situation, i.e., continue to sup-
port, or perhaps withdraw a nomination. Requests for this basic in-
formation on sensitive case reports and the IRS’s responses to the
requests would, of course, be disclosed to the appropriate congres-
sional committees under recommendation (a).
Recommendation (c) was prompted by those instances where indi-
viduals in the Executive Office of the President would seek and receive
copies of income tax returns. Generally these were the returns of
individuals perceived as enemies of the White House. That the returns
were oftentimes sought and used for improper political purposes is
clear. A statute prohibiting the receipt of income tax returns by those
in the Executive Office of the President would do much to curb these
improper practices.
In addition, by making receipt — rather than distribution — criminal,
the statute would eliminate those instances where returns could be ob-
tained indirectly from a governmental agency, e.g. a U.S. Attorney
General’s Office, which has full disclosure with the IRS.
2. Congress should enact legislation requiring full financial dis-
closure by the President and Vice President of the United States
to the General Accounting Office each year of all income, gifts,
and things of value that they or their spouses have received during
the year or expenditures made for their personal benefit or the
benefit of their spouses by other individuals.
Senators Ervin and Talmadge voted against the recommendation
because they believe that public officials should be judged on the basis
of the wisdom or unwisdom of their official actions, and not upon
the basis of what they do or do not possess in this world’s goods.
Presently, legislation requires that Congressmen and Senators file
statements of financial disclosure each year. Certainly, the head of
the executive branch of the Government should be held to no less a
standard than the Members of the Legislature, and perhaps even held
to a higher standard of disclosure because of the significance of his
position.
Full financial disclosure by the President and Vice President to
the public each year would also help protect the Office of the President,
ensuring that no individual occupying the Office would be the object
of any speculation, innuendo, or suggestion of impropriety regarding
income, gifts, and expenditures. In addition, such a standard of full
public disclosure would help to ra i se the ethical standards by -which
the public views its elected officials and would restore a measure of
confidence in the workings of Government.
1074
Examples of items which should be disclosed include the following :
— Copies of tax returns, declarations, statements, or other documents
which were made individually or jointly for the preceding year in
compliance with the provisions of the Internal Revenue Code ;
— The identity of each interest in real or personal property having
a value of $10,000 or more which the President or Vice President
or spouses owned at any time during the preceding year ;
— The identity of each trust or other fiduciary relation in which the
President or Vice President or spouses held a beneficial interest
having a value of $10,000 or more, and the identity, if known, of
each interest of the trust or other fiduciary relation in real or per-
sonal property in which he or she held a beneficial interest having
a value of $10,000 or more at any time during the preceding year ;
— The identity of each liability of $5,000 or more owned by the Pres-
ident or Vice President or by them jointly with their spouses, at
anytime during the preceding year ; and
—The source and value of all gifts received by the President, Vice
President, or spouses in the aggregate amount or value of $50
or more from any single source received during the preceding year.
The information required to be filed with the GAO would be made
public automatically unless there were some overriding reason to
protect the confidentiality of the information. In such a case, the
information would still be available to any standing, select or special
committee of either House of Congress upon the receipt by GAO of a
resolution requesting the transmission of such information.
3. State and local bar associations should conduct a study of the
attorney-client privilege in light of the abuses of the privilege un-
covered during the Select Committee’s investigations.
A strong attorney-client privilege is essential to the effective func-
tioning of our legal system. It must be broad enough to encourage full
disclosure by client, including disclosure of past criminal conduct.
At the same time, the privilege should not be used to protect from dis-
closure communications involving violations of law and near viola-
tions that- have nothing to do with the offering of legal advice by a
lawyer. Providing information to a person who happens to be a lawyer,
or involving him or her in one’s affairs should not automatically cloak
the transaction with the protections of the privilege.
In at least four instances during the Select Committee’s investiga-
tions, the lawyer-client privilege has been pleaded as part of an attempt
to cover up illegal or questionable activities that had nothing to do
with the rendering of legal advice :
1. Mardian and Liddy in the Watergate coverup;
2. Dean and Segretti in the Watergate dirty tricks cover-up ;
3. Kalmbach and Robozo in the Hughes-Rebozo coverup ;
4. Wakefield and Rebozo, also in the Hughes-Rebozo area.
A review of these cases by the various bar associations should help
to clarify the proper limits of the privilege, and provide more detailed
guidance for lawyer, clients, and legislative and investigative bodies.
APPENDIX
INDIVIDUALS INTERVIEWED BY SENATE SELECT COMMITTEE STAFF
DURING COURSE OF HUGHES-REBOZO INVESTIGATION
Abplanalp, Robert November 1, 1973.
Acker, Mar jorie March 25, 1974,
May 6, 1974.
Annrews, Vince, Jr December 7, 1973.
Bacon. Donald January 31, 1974.
Baker, Buehl June 3, 1974.
Baker, Donald November 26, 1973.
Barker, Bernard November 13, 1973,
January 4. 1974.
Barrick. I’aul May 16. 1974.
Barth, Roger July 31, 1973,
June 6, 1974.
Bartlett, Jack May 16, 1974.
Bartley, Evelyn January 17, 1974.
Bautzer, Greg January 22. 1974.
Beans, Robert.
Bell. Thomas December 17, 1974.
Benedict, Alvin December 10. 1973.
Bennett, Gen. John May 18, 1974.
Bennett, Robert July 27, 1973,
September 6, 1973. September
13, 1973, December 28, 1974,
January 2, 1974.
Bird, Robert October 21, 1973.
Bishop. Alvin December 20, 1973.
Blech, Arthur October 26, 1973,
November 14, 1973, April 18,
1974, June 3, 1974.
Boggs, “Pat” July 19, 1973.
Brandt, William.
Briggs, William.
Brinn, Lawrence May 22, 1974.
Brown, Howard Oct. 25, 1973.
Brown, Jack May 13, 1974.
Brown, Secor Jan. 15, 1974.
Brownhill, Ruth Jan. 15, 1974.
Brummett, Jean Dec. 21, 1973.
Butterfield, Alexander Sept. 18, 1973.
Buzhardt, Fred Apr. 10, 1974.
Apr. 23, 1974, May 7, 1974.
Campbell, Harold Dec. 18, 1973.
Cantor, Arthur Dec. 4, 1973.
Carney, Tom Mar. 18, 1974.
Caulfield, John May 15, 1974,
Sept. 11-12, 1973, Sept. 18, 1973.
Mar. 16, 1974, Mar. 23, 1974.
Cerny, Howard Jan. 5, 1974.
Chotiner, Murray,. Aug. 9, 1973,
Aug. 17, 1973, Dec. 7, 1973.
Clagett, J. II June 14, 1974.
Clark, John Jan. 10, 1974.
Clark, Thos. R Oct. 15, 1973.
Clifford, George Oct. 15, 1973.
Comegys, Walter Nov. 5, 1973.
Gomel', Katherine Nov. 1973.
Coyle, Janies Nov. 14, 1973,
Jan. 10, 1974, Jan. 31, 1974.
Crane, Richard Feb. 14, 1974.
Cromar, Jack Dec. 3, 1973,
Dec. 12, 1973.
“D,” Aug. 22, 1973,
May 7, 1974.
Dahl, Norman October 23, 1973.
Danner, Richard August 30, 1973,
December 18-20, 1973, Decem-
ber 18-19, 1973, June 11-12,
1974.
Davis, A. D March 19, 1974,
April 11, 1974.
Davis. Chester October 10, 1973,
December 3-4, 1973, June 12, 1974.
Davis, Irving,
“Jack” February 5, 1974.
Davis, Von.
Dawson, Ann February 7, 1974.
Dean, John July 31, 1973,
September 1973, October 24, 1973.
Deboer, Franklin August 8, 1973.
DeFeo, Mike February 14, 1974.
DeMarco, Frank November 13-14,
1973, January 31, 1974, Febru-
ary 1974, April 17, 1974.
Demott, Howard July 23, 1973.
Dent, Robert.
Desautels, Claude October 20, 1973.
Ebner. Stanley March 1974.
Ehrlichman, John January 10, 1974,
February 8, 1974.
Ellis, Richard December 18, 1973.
Elson, Dean September 11, 1973.
Evans, Harry October 28, 1973.
Fielding, Fred July 12, 1973,
February 8, 1974.
Finch, Robert November 15, 1973.
Firestone, Leonard April 17, 1974.
Flanigan, Peter November 20, 1973.
Foley, Joseph October 11, 1973.
Garment, Leonard April 4, 1974,
May 17, 1974.
Gay, Bill October 9, 1973.
Gemmill, Kenneth December 3, 1973,
May 29, 1974.
Giller, Gen. Edward- October 16, 1973.
Glaeser, Walter December 3-4, 1973.
Golden, James October 16 and 19,
1973, January 2, 1974, June 27,
1974.
( 1075 )
1076
Gonzales, Virgilio November 10,
1973, December 10, 1973.
Grace, David October 30, 1973.
Greenspun, Hank— August 25 and 28,
1973, April 18, 1974.
Griffin, William December 7, 1973,
January 8, 1974, March 28, 1974,
April 19, 1974.
Gribben, Dave December 3-4, 1973.
Haig, Gen. Alexander May 2, 1974,
May 15, 1974.
Haldeman, H. R July 25, 1973,
July 30, 1973, November 9, 1973,
January 31, 1974.
Hall, Joan January 21, 1974.
Hallomore, Barry November 15,
1973, April 25, 1974.
Hamilton, Wayne.
Harrison, Jane Lucke January 16,
1974.
Hartman, June January 21, 1974.
Harvey, Ann May 4, 1974.
Helms, Richard March 18, 1974.
Henley, Nadine January 22, 1974.
Hewitt, Robert June 10, 1974.
Higby, Lawrence May 22, 1974,
June 24, 1974.
Hillings, Patrick — November 7, 1973.
Hinkle, Sgt. Earl— November 15, 1973.
Hollingsworth, Robert October 17,
1973.
Holm, Holly July 24, 1973.
Hullin, Tod January 11, 1974.
Hummel, Robert Novemlier 30, 1973.
Hruska, Janet July 12, 1973.
Hunt, E. Howard July 25-26, 1973,
September 10-14, 1973,
December 17-18, 1973.
Ihli, George.
Jackson, Morton August 23, 1973.
Johnson, Frank December 19, 1973.
Jones, Linda Lee September 6, 1973.
Juliana, James November 5, 1973.
Kalmbach, Herbert September 24,
1973, October 12, 1973, Novem-
ber 13, 1973, March 8, 1974,
March 21-22, 1974, May 5, 1974,
June 13, 1974.
Keeney, John C February 14, 1974.
Klein, Herb August 27, 1973,
November 16, 1973.
Kleindienst, Richard— October 19, 1973.
Konowalski, Diane_ September 7, 1973.
LaRocco, Anthony.. September 21, 1973.
LaRue, Fred July 6, 1976,
July 7, 1973, October 15. 1973.
April 9, 1974, May 28, 1974.
Latham, Lee May 17, 1974.
Laxalt, Paul October 11, 1973,
December 19, 1973, January 2, 1974.
Lee, Jean
Lindenbaum, Sol December 26, 1973.
Lynch, W February 21, 1974.
Magruder, Jeb Stuart— August 16, 1973.
Maheu, Peter November 29, 1973.
Maheu, Robert August 30, 1973,
September 15, 1973. January 20-
21, 1974, January 28, 1974.
Mailloux, Pierre December 15, 1973.
Malek, Fred April 18, 1974.
Martin, Susan February 4, 1974.
Martinez, Eugenio December 10, 1973.
Messick, Hank January 15, 1974.
Middendorf, J. W May 14, 1974.
Miller, Clifford January 22, 1974.
Mitchell, John October 18, 1973.
Moncourt, Nicole April 1, 1974.
Moore, Richard February 27, 1974.
Morgan, Edward P September 7,
December 5, 1973, March 6, May
2, 1974.
Morgan, Robert
December 11-12, 1973.
Murphy, Charles January 10, 1974.
Murray, Thomas October 1973.
McCord, James September 17, 1973,
October 23, 1973.
McKiernan, Stanley April 15-16,
1974, May 15, 1974.
Nixon, Edward November 10, 1973,
November 16-17, 1973, April 15,
1974.
Nixon, F. Donald-- November 8, 1973,
November 16-17, 1973, April 15,
1974.
Newman, Ross October 19, 1973.
O’Brien, Lawrence— October 9, 1973,
December 7, 1973.
Olejnik, Virginia February 15, 1974.
Peloquin, Robert December 28, 1973,
March 15, 1974.
Perdue, James June 15, 1974.
Perez, Jenaro December 3, 1973
Perkins, Mahlon December 7, 1973.
Petersen, Henry February 19, 1974.
Pfeifer, Miss
Ramey, James T October 16, 1973.
Rashid. Baddia November 21, 1973.
Real, Jack December 1, 1973.
Rebozo, Charles G — October 18, 1973,
October 17, 1973, March 20-21, 1974,
May 9, 1974.
Reynolds, Anita Rebozo February 5,
1974.
Richardson, Elliot April 30, 1974.
Rashid, Baddia November 21, 1973.
Ryan, James June 6, 1974.
Sabatino, Lewis May 22, 1974.
Sample, Alexander, Jr_- December 18,
1973.
Schemmer, Ben October 10, 1973.
Scott, Regina February 5, 1974.
Shenker, Morris December 20, 1973.
Shultz, George November 21. 1974,
January 25, 1974.
Simon, William May 7, 1974.
1077
Sinnot, William October 15, 1973,
December 19, 1973.
Sloan, Hugh April 26, 1974.
Smatliers, George— January 10, 1974.
Sprague, Robert
Stearns, Richard October 3, 1973,
December 10, 1973.
Strachan, Gordon August 8, 1973.
Stuart, Charles May, 1974.
Sturgis, Frank March 7, 1974.
Suckling, John R October 25, 1973.
Sullivan, AVilliam_ September 19, 1973,
February 1974.
Swope, Win ^November 23, 1973.
“T” : January 5, 1974.
“T” August 25, 1973.
Taylor, Robert October 27, 1973.
Thomas, E. Parry.. December 20, 1973.
Todd, Webster December 3, 1973.
TJlasewicz. Anthony July 9, 1973.
Val, Claudia January 8, 1974.
Wakefield, Thomas October 18, 1973,
January 16, 1974, June 10, 1974.
Walters, Johnnie June 14, 1974.
Warren, Gerald February 26, 1974.
Wearley, Robert December 2, 1973.
Webb, Thos., Jr.
Westman, Burton. December 20, 1973.
Whitaker, Kenneth November 20, 1973.
Whittinghill, Charles December 6,
1973.
Wilson, Bruce November 23, 1973,
Winte, Ralph August 28, 1973,
August 30, 1973.
Witwer, Allan January 14, 1974.
Woods, Rose Mary. February 20, 1974,
March 22, 1974.
Wyman, Sidney December 20, 1973.
Young, Carl.
Yowell, Susan February 27, 1974.
Ziegler, Ron June 24, 1974.
Zimmerman, Ed February 7, 1974.
INDIVIDUALS INTERVIEWED BY TELEPHONE
Name Date
Adler, Howard October 23, 1973,
December 6, 1973.
Agnew, Spiro June 24, 1974.
Albasia, Aldolpha May 14, 1974,
June 1. 1974, June 3, 1974.
Albright, Barbara..— _ — June 3, 1974.
Ayer. William November 26, 1973.
Barker, Dez January 4, 1974.
Barker, Robert.
Barry, William.
Blech, Arthur May 8, 1974,
June 22, 1974.
Blitch, Albert.
Bonelli, Jaime June 1, 1974.
Brandt, Mrs June 4, 1974.
Bruzzella, R. W.
Cantor, Arthur October 17, 1973.
Castro, June June 3, 1974.
Chambers, R. W January 11, 1974.
Cleveland, Geraldine May 18, 1974.
Comegys, Walter October 23, 1973.
Daniel, Mr.
Dekreek, Janet December 3, 1973.
Delauer, Magel October 22, 1973.
DeMarco, Frank— June 3, 1974.
Deskin, Ruth April 5, 1974.
Desrosher, M. A.
Donnem, Roland October 23, 1974.
Douglas, Stephen.
Elmer, Stanley April 15, 1974.
Eisenberg, Milton. December 13, 1973,
Fabergas, M June 5, 1974.
Feinberg, Joseph June 6, 1974,
June 10, 1974.
Figenshaw, James.. January 15, 1974.
Fresh, Larry.
Gayle, Thos,
Gustafson, Tom June 4, 1974.
Hall, Joan May 1974.
Ilallomore, Barry November 7, 1973.
Hallomore, Lloyd.. November 6, 1973.
Hamand, Joy October 25, 1973.
Name
Date
Hayes, Jim December 6, 1973.
Heal, Terry.
Healy, Ray.
Henderscheid, Robert.
Hernandez, Renaldo.
Hooper, Ray.
Iannl, John— January 10. 1974,
June 21, 1974.
Jackson, Robert.
Jaffe, Col November 2, 1973.
Jones, Lyle January 15, 1974.
Jones, Richard.
Jury, Mr.
Kestenbaum, Lionel. October 17, 1973.
Kotoske, Tom February 19, 1974.
Kraushaar, I, N April 10, 1974.
Lambert, Harry.
Little, Robert June 1, 1974.
Masur, Wayne.
Morgan, Edward L.
Morrison, Steve June 5, 1974.
Morrison, Sue January 18, 1974.
Murchison, Clint, Jr June 2, 1974.
Murray, Gene.
Murray, Rita October, 18, 1973.
MeCaughlin, Robert June 4, 1974.
McDonald, Robert December 4, 1973.
McKiernan, Stanley December 10,
1973.
McKillop, Roy, Sr.
McLaren, Richard October 17, 1973.
Nissen, David January 31, 1974,
February 12, 1974.
Nunn, Gov. Louis.
Plyler, Robert.
Reagan, Robert.
Rix, II. John.
Roche, Lois,
Roth, George November 20, 1973.
Ryhlick, Lawrence May 22, 1974.
June 20, 1974.
Salkof, Godwin.
1078
Sullivan, Margaret- February 16, 1973.
Tammer, Robert.
Taylor, Paul, Jr.
ThrelMnd, Major.
Tillotson, Mr.
Ulasewicz, Anthony — April 20, 1974.
Vinson, Fred, Jr — December 17, 1973.
Vagliotti, Gabriel.
Waggoner, Mr.
Wakefield, Thomas June 26, 1974.
Weiss, Leonard October 31, 1973.
Whittinghill, Charles December 11,
1973.
Schade, Paul
Schaeffer, Don.
Scheinbaum, Stan —
Scott, Robert.
Scott, William _
Shelton, Robert
Shermer, Robert.
Siegel, Ronald.
Silberman, Irwin.
Smith, Marquis
Snead, Robert.
Spira, Sylvan.
Stewart, Chas. W.
Stuart, Charles
Suckling, John R
October 29, 1973.
November 4, 1973.
June 12, 1974,
June 19-20, 1974.
May 29, 1974.
October 16, 1973.
_ June 20, 1974.
October 11, 1973.
Wilson, Mrs.
Wilson, Will
York, William, Jr.
Zimmerman, Ed
February 6, 1974.
October 17, 1973.
CHAPTER 9
The Select Committee in Court
I. OVERVIEW OF LITIGATION
More than most congressional committees in recent memory, the
Select Committee, during its short life span, has been involved in
various types of court proceedings. In total, the committee partici-
pated in over 60 different matters before the Federal courts. These
ranged from the routine (e.g., obtaining writs of habeas corpus ad
testified: ndv/n% to secure the testimony of incarcerated witnesses) to the
complex (e.g., the committee’s suit to obtain certain Presidential
tapes and materials, Senate Select Committee v. Nixon).
The suit against the President was the only proceeding in which
the committee and its members appeared as plaintiffs in the traditional
sense. However, the committee was a successful applicant for orders
allowing it to confer limited or use immunity on 29 potential wit-
nesses, thereby permitting it to obtain their testimony notwithstand-
ing their assertion of the privilege, against self -incrimination. A table
providing the names of individuals for whom court orders allowing
the conference of immunity were obtained, and other information
relating to those orders, is found in the Appendix to the Hearings of
Legal Documents (hereinafter “LA” for legal appendix). 1 The com-
mittee also successfully sought writs of habeas corpus ad testificandum
on 22 occasions that allowed it to obtain the testimony of several Fed-
eral prisoners. Because other congressional committees may want to
apply for immunity orders and habeas writs in the future, the Legal
Appendix contains representative pleadings and other papers filed to
achieve these results.
The committee also appeared as Amicus Curiae in four lawsuits
including the litigation brought by the first Special Prosecutor to ob-
tain Presidential tapes and documents. Nixon v. Sirica , 487 F.2d 700
(CADC 1973). And the committee was a defendant in eight suits
brought to prohibit or alter its proceedings. All these actions against
the committee failed.
Four of the committee’s litigative efforts are of particular impor-
tance. The tapes case, Senate Select Committee v. Nixon, has already
been mentioned and receives further discussion. below. Also important
are :
Application of United States Senate Select Committee on Pres-
idential Campaign Activities , 2 This matter involved an unsuc-
cessful attempt by the first Special Prosecutor to have the court
impose conditions — most importantly, a requirement that testi-
1 LA pp. 2154—55.
2 LA p. 388 et seq.
(1079)
1080
mony be taken without television and radio coverage — on the
grant of authority to the committee to confer limited immunity
on John Dean and Jeb Magruder who otherwise would have been
excused from testifying upon the assertion of their privilege
against self-incrimination. The district court’s opinion in this
matter, which totally rejected the notion that a court could con-
dition the issuance of an immunity order on the acceptance of re-
strictions by a congressional body, is reprinted in the Appendix. 3 4
See also at 361 F. Supp. 1270 (lOtB) .
National Citizens for Fairness to the Presidency, Inc., et at. v.
Senate Select Committee , et add In this case the plaintiffs, who
contended that the committee’s public hearings had disrupted
domestic tranquility to the public detriment, unsuccessfully at-
tempted to block those public hearings.
Richard Danner, et al. v. Senate Select Committee, et add The
Summa Corp. (formerly the Hughes Tool Co.) and certain of its
employees failed in this lawsuit to prevent the taking of their
testimony in executive or private session.
These cases raised numerous fundamental questions concerning the
role of Congress in our system of government and, particularly, its
relationship with the other two coordinate branches. For example:
The right of Congress to investigate criminal conduct. The duty of
Congress to inform the public by publicizing its findings of executive
misdeeds. The power of Congress to obtain information for its inves-
tigations from the executive branch, by subpena if necessary, where a
claim of executive privilege is raised. The authority of the Federal
courts to entertain suits between Congress and the executive. The
authority of Congress to conduct its investigations in secret until it
decides publicly to disclose its findings. The right of Congress to inves-
tigate criminal conduct against the claim that fair trials might be im-
paired. The requirements of “Due Process” in regard to congressional
hearings. The scope of congressional immunity under the “Speech
and Debate Clause” of the Constitution. Because these issues are ex-
plored in detail in the pleadings in these lawsuits, they are not analyzed
here; rather, we have included the major papers submitted in these
litigations in the Appendix to the Hearings of Legal Documents.
While the committee’s papers were often filed under considerable time
pressures dictated by the exigencies of the moment, they do present
basic statements of congressional rights, duties, and prerogatives re-
specting the issues outlined above. Other legal documents of relevance
besides those mentioned are also included in the Appendix, as its table
of contents indicates.
Some additional comments respecting Senate Select Committee v.
Nixon and Danner v. Senate Select Committee are necessary because
the committee’s experiences in these cases give rise to several recom-
mended reforms in the law that are outlined below.
1. Senate Select Committee, v. Nixon — to date, the only recorded
civil suit in history by the Congress against the President for produc-
tion of material relating to Presidential communications — was filed on
August 9, 1973, shortly after the President dishonored two subpenas
3 LA p. 479 et seq.
4 LA p. 1768 et seq.
6 LA p. 1972 et seq.
1081
issued to him on duly 28, 1973, which sought five specified tape record-
ings of Presidential conversations and other White House documents
and materials. The existence of these tapes had been revealed to the
public on July 16, 1973, through the testimony to the committee of
Alexander P. Butterfield, a former Deputy Assistant to the President.
The committee issued its subpenas and filed its suit against the Presi-
dent only after informal attempts to obtain tapes and other relevant
material from the President had failed.
The committee chose this route to enforce its subpenas because it
appeared unseemly to attempt enforcement by initiating statutory
contempt proceedings against the President (see 2 H.S.C. 192) or
by employing the self-help measures at the Senate’s command (see
e.g ..Jurneyx. MarCraeken , 291 TT.S. 125 (1935) ).
On August 29, 1973, the first day possible after the complaint was
filed, the committee submitted a motion for summary judgment re-
questing a declaratory judgment that its subpenas were valid and
should be honored. (As the record shows, the committee sought expedi-
tion of this litigation at every stage.) However, on October 17, 1973.
the district court (Sirica, Ch. J.j dismissed this action for lack of
jurisdiction. 6
Meanwhile, the Special Prosecutor’s case for certain Presidential
tapes and documents was making its way through the courts. Special
Prosecutor Cox was eventually successful in obtaining most of the
material sought. (See Nixon v. Sirica, supra.) Because his litigation
was ancillary to a grand jury proceeding, the Special Prosecutor was
not troubled with questions of jurisdiction and other problems that
attend civil litigation as was the Select Committee.
The committee appealed Judge Sirica’s ruling on October 19, 1973.
Two days after appeal was noted. Senators Ervin and Baker, at the
President’s behest, met with the President and two of his counsel at
the White House. After that meeting, it was suggested in the press
that these Senators had agreed to a “compromise” of the committee’s
lawsuit whereby the committee would forego its litigation in exchange
for “summaries”: of certain tapes that would be verified by Senator
John Stennis. The next day, October 20, the first Special Prosecutor
was dismissed for not agreeing to the so-called “Stennis Compromise,”
and the Attorney General, Elliot Richardson, and the Deputy Attor-
ney General, William Ruckelshaus. resigned. The fact of the matter,
as reported to the Court of Appeals on October 23, 1973, 7 is that Sen-
ators Ervin and Baker agreed to no such compromise. While the Presi-
dent unilateralli / offered certain materials to the committee, there was
not even a tentative commitment by its Chairman and Vice Chairman
that, as a quid pro quo. the Suit would be withdrawn. To the contrary,
it was clearly understood by Senator's Ervin and Baker that the com-
mittee, in all events, could pursue its lawsuit. Moreover, these two
Senators understood that the President was offering the committee
verbatim transcripts of the conversations at issue, not mere “sum-
maries.” As it happened, the “Stennis Compromise” never materialized
and the suit continued.
The committee was and is of the view that Judge Sirica’s jurisdic-
tional ruling, particularly in regard to the requirements of 28 TJ.S.C.
6 His opinion is at LA p. 980 et seq.
7 LA p. 999 et seq .
1082
1331 (the basic Federal question jurisdictional provision), consti-
tutes both a misstatement and a misapplication of existing law. Never-
theless, while the case was on appeal, Senator Ervin introduced, and
the Congress soon passed, a bill giving the district court jurisdiction
over this and other cases brought by the Select Committee to enforce
subpenas issued by it to the executive branch. The bill, which was not
vetoed by the President, became Public Law 93-190 on December 19,
1973, after the President failed to sign it within 10 days of transmittal
to him. 8 Public Law 93-190 does not cover suits brought by other con-
gressional bodies against the executive branch for production of infor-
mation. Senator Ervin initially, on November 2, 1973, had introduced
a more inclusive bill that would have provided jurisdiction for all
suits to enforce congressional subpenas issued to the President or other
officers and employees of the executive branch by either House of Con-
gress, any committee or subcommittee of either House, or any joint
committee of Congress. 9 The bill that eventually became Public Law
93-190 was substituted for this proposal.
The Senate also, on November 7, 1973, promulgated Senate Resolu-
tion 194, 93d Congress, first session, which affirmed that the Select
Committee was authorized by the Senate to subpena and sue the
President. 10 S. Res. 194 also declared it was the sense of the Senate
that the committee, in subpenaing and suing the President to obtain
the information in question, was acting with valid legislative purpose
and seeking information vital to its legislative missions.
On January 25, 1974, Judge Gesell, to whom the case had been
reassigned upon remand, declined to enforce the committee’s subpena
that called for a number of unspecified documents and other materials
on the grounds that it was too vague, particularly in view of the
stringent requirements established by Nixon v. Sirica applicable where
a claim of executive privilege is raised. The same Judge, on February 8,
1974, while riding for the committee on basic issues such as the invalid-
ity of the President’s claims regarding executive privilege, justici-
ability, and relevance of the material sought under S. Res. 60, declined
to enforce the committee’s other subpena for five specified tape record-
ings and dismissed the litigation without prejudice. The court’s ruling
was grounded on its view that enforcing the subpena and releasing
the tapes to the committee might give potential defendants in the
Watergate trials the opportunity to contend with greater force that
their trials had been irrevocably prejudiced by pretrial publicity.
Between the date of the lower court’s ruling and the issuance of
the Court of Appeals’ opinion on May 23, 1974, 11 two highly significant
events occurred. First, the House Judiciary Committee, which was con-
sidering the President’s impeachment, received copies of the five tape
recordings at issue in the Select Committee’s suit. Second, the Presi-
dent released to the public partial, unauthenticated transcripts of these
five conversations, among others.
The Court of Appeals subsequently affirmed the lower court’s ruling,
but not for the reasons posited by the district court. The appellate
court began by holding that Presidential conversations are “presump-
8 LA p. 1083.
8 LA pp. 1095-96.
10 LA pp. 1084-86.
11 LA p. 1743 et seq.
1083
tuously privileged” and that this presumption can be defeated only
by a “strong” showing of public need by the institution of Government
seeking access to the conversations— “a showing that the responsibili-
ties of that institution cannot responsibly be fulfilled without access
to records of the President's deliberations.” 12 The court then stated:
Particularly in light of events that have occurred since this
litigation was begun and, indeed, since the district court
issued its decision, we find that the Select Committee has
failed to make the requisite showing.
Because the House Judiciary Committee possessed copies of the five
recordings in issue, the court held that the Select Committee’s sub-
pena could not be sustained on the basis of a need to fulfill Congress’
informing and oversight functions. 13 And, because partial transcripts
of the five conversations involved had been partially released and it
appeared that the impeachment findings of the House would, in the
near future, be made public, the court held that the committee had
not shown that the material sought was “critical” to its law-making
functions.
It is clear, therefore, that the court’s decision rested, as the court
observed, on “the peculiar circumstances of this case”, and should not
necessarily prevent legislative committees in the future from obtain-
ing materials relating to Presidential communications. Moreover,
because of the unique factual context, the court’s opinion should have
little relevance in the future respecting congressional efforts to achieve
executive branch materials that do not concern Presidential conver-
sations or deliberations.
It is noteworthy, in terms of the recommendations we present below,
that the Attorney General filed an Amicus Curiae brief in the Court of
Appeals opposing the committee’s contentions. A similar antagonism
to the congressional position was in evidence in Application of United
States Senate Select Committee where the Special Prosecutor opposed
the committee’s stand that the district court had no power to condi-
tion the grant of an immunity order.
2. We conclude this brief review by noting that Danner v. Select
Committee , the litigation brought by the Summa Corporation and
others to proscribe the taking of testimony in executive session,
raised an important question respecting the right of the Senate under
existing law to conduct sensitive investigations in private session. Sec-
tion ]90a-~l (b) of Title 2 provides :
Each hearing conducted by each standing, select, or special
committee of the Senate (except the Committee on Appropria-
tions) shall be open to the public except when the committee
determines that the testimony to be taken at that hearing may
relate to a matter of national security, may tend to reflect
13 The Court refused to accept the Committee’s argument that the presumption in their
case was dispelled because there was a prima facie case that the President and his aides had
engaged in criminal conduct. The Court also disagreed with the Committee’s position that
the presumption should dissipate because, as the Court in regard to four of the five tapes at
issue held in Nixon v. Sirica, 417 F, 2d at 718, “(t)he simple fact is that the conversations
are no longer confidential” after the wealth of information published as to their contents.
The Committee notes, however, that the publication of even the partial, unauthenti-
cated transcripts released by the President fully vindicates its long-voiced claim that it
should receive the tapes subpenaed so that the public could be informed of the extent of
wrongdoing in the executive branch.
1084
adversely on the character or reputation of the witness or any
other individual, or may divulge matters deemed confidential
under other provisions of law or Government regulations . . .
The committee, respecting the investigation involved in the Danner
suit, had no difficulty making the determination specified in the statute
because the possibility of defamation and the revelation of national
security matters was established. But, as discussed in more detail
below, there may come times when a senatorial committee would need
to conduct its investigations in secret for other legitimate reasons.
II. DISCUSSIONS AND RECOMMENDATIONS
1. The committee recommends that Congress enact legislation
giving the United States District Court for the District of Co-
lumbia jurisdiction over suits to enforce congressional subpenas
issued to members of the executive branch, including the Presi-
dent. This statute, which would apply to all subpenas issued by
congressional bodies, would replace the special statute passed
for and limited to the Select Committee that is now codified as
28 U.S.C. 1364. The statute should provide that a congressional
body has standing to sue in its own name and in the name of
the United States and may employ counsel of its own choice in
such a suit. The statute should provide that suits brought to
enforce congressional subpenas must be handled on an expedited
basis by the courts.
The Congress continually needs information from the executive
branch to fulfill its critical oversight and informing functions. A
major lesson of Watergate is the need for vigorous congressional
oversight— without the committee’s hearings many of the salient
facts respecting the Watergate affair, including the existence of the
Presidential tapes, might never have surfaced. Moreover, the Supreme
Court has long stressed the vital importance of Congress’ role as the
informer of the public of wrongdoing, inefficiency, and waste in the
executive branch.
Congress can often force production of information from the execu-
tive by use of political sanctions — for example, administration bills can
be voted down, appropriations denied, nominations rejected. But fre-
quently these political devices are not available. At times a Congress-
man can obtain information — like any other citizen — under the Free-
dom of Information Act, but there are many limitations to that
statute’s applicability. Congress also has available, to redress the re-
fusal to comply with a subpena, its self-help powers or the statutory
contempt procedures contained in 2 U.S.C. 192, but these drastic
remedies are often time consuming and singularly inappropriate where
high executive officials are involved. The impeachment process is like-
wise a manifestly awkward vehicle by which to force executive pro-
duction of evidence.
It thus seems appropriate to provide another remedy to Congress to
allow it promptly to enforce its subpenas against the executive — the
1085
ability to bring an expedited civil action to achieve a ruling on the
validity and enforceability of congressional subpenas. 14
The Congress would not be forced to use this method of enforcing
its subpenas, but it would be available if other remedies were not suit-
able. Moreover, disputes between the Congress and the executive often
involve constitutional questions that the Federal Courts — as the ulti-
mate interpreters of the Constitution — are well equipped to resolve.
2. The Select Committee recommends that Congress give careful
consideration to the bill now before the Senate (S. 2569) that
would establish a Congressional Legal Service and thus give
Congress a litigation arm that would allow it to protect its
interest in court by its own counsel.
As the suit to obtain Presidential materials and the litigation involv-
ing the Dean/Magruder immunity orders demonstrate, there are tidies
where Congress’ interests diverge from those of the executive. Indeed,
in those two cases, the two branches were pitted against each other and
their immediate interests were largely conflicting. In many instances
where Congressmen are parties to litigation, they are represented by
the Department of Justice. But such an arrangement is obviously
unacceptable where executive interests conflict with congressional
interests. The Select Committee, which had a litigating staff, was able
to conduct its own lawsuits, but many congressional committees, not
similarly staffed, might find litigation activity difficult. The establish-
ment of a Congressional Legal Service would provide Congress a
permanent litigation arm and thus meet this problem.
2. The Select Committee recommends that Congress amend
2 U.S.C. 190a-l(b) to allow a senatorial committee or its staff
to take testimony and evidence in private session upon an express
determination by the committee that the requirements of efficient
and productive investigation so require and that the investigation
would be materially harmed if a regimen of confidentiality were
not imposed. The amended statute, however, should provide that
testimony or evidence taken in confidence for these reasons
should be released to the public as soon as the requirements of
efficient investigation no longer demand confidentiality.
Section 190a-l(b), as it now stands, does not fully meet the needs
of an investigative committee — especially one exploring sensitive or
criminal matters. While the general proposition that senatorial hear-
ings should be public is sound, it must be recognized that efficient
investigatory techniques require that, at times, testimony and evidence
be received in confidence. Such occasions may arise in circumstances
not now covered by 2 U.S.C. 190a-l(b), which only provides for pri-
vate hearings where defamation or the release of national security
14 The statute here recommended would be similar to that first introduced by Senator
Ervin after Judge Sirica’s ruling dismissing the Committee’s suit against the President for
lack of jurisdiction (LA pp. 1084-86), but would additionally include a provision for
expedition.
1086
information might result, or where confidentiality is required by
Federal law or regulation. For example, in many circumstances testi-
mony and evidence should be taken in private to prevent leads from
drying up or witnesses from disappearing. Or it might be necessary
to withhold the testimony of one witness from a subsequent witness
to avoid the tailoring of later testimony. Moreover, in circumstances
such as those experienced by the Select Committee where many hun-
dreds of witnesses were interviewed in private throughout the Nation
(both in executive session before a Senator and in private staff inter-
views), it is simply not efficient to require that all investigatory ses-
sions be conducted in public. Section 190a-l(b) could justifiably be
interpreted as not applying to informal staff interviews, but, in any
event, amendment of this section is necessary to allow the full utiliza-
tion of efficient investigatory procedures. Because the general policy
of open government reflected in the current section 190a-l(b) is salu-
tary, the amendment we propose would provide that the evidence
taken in private sessions would be made public as soon as proper
investigatory techniques no longer require that it be kept private.
X
CHAPTER 10
The Select Committee’s Use of Computer Technology
I. INTRODUCTION AND OVERVIEW
To accomplish its investigative task, the staff of the Select Com-
mittee had to analyze a considerable amount of information available
concerning the Watergate incident and related activities. Included
among this data was the transcript of the Watergate trial held in
January 1973 and various newspaper articles published since the
break-in on June 17, 1972. In addition, many interviews, investigative
reports, and much documentary evidence had to be obtained for the
committee to conduct a thorough investigation.
In early March, the committee’s information was processed by
hand. An elaborate file card indexing technique was employed pat-
terned after one used by military intelligence agencies. Trained re-
searchers would read testimony and documentary evidence and ab-
stract the facts contained therein. References to each person discussed,
along with the date of the activities testified about and the location
of the activities were included with the paragraph or abstract. This
data, after being taped on cassette tape records, was transcribed onto
3 x 5 cards. One card was made for each person, date and location dis-
cussed and placed in three files. Thus, staff members could utilize
any of the files.
By the middle of March, over 10,000 file cards had been produced,
yet the backlog of information available had scarcely been processed.
Other problems developed. Since there was only one complete file card
system, only one person could employ the system at a time. The size
of the file made reproduction of the system for each individual’s use
impracticable. To prepare reports about individuals, dates, or general
events, the card file had to be totally reviewed by hand, consuming
valuable time ; and given the time frame within which the committee
had to operate, it was believed this procedure would seriously affect
the total investigation.
Therefore, in late March, the Select Committee decided to explore
the possibility of using automation to facilitate organization and
analysis of the information to be collected. Samuel Dash and members
of the Select Committee staff met with Paul Reimers, Coordinator of
Information Systems, and other persons from the Library of Congress
Information Systems Office.
The requirements of the system were established. A generalized file
system was needed with full text processing and all Boolean search
capability. The Select Committee had to be able to formulate its search
request with both positive and negative qualifiers. An updating ca-
pability had to be a major feature of the system since new information
( 1087 )
35-687 0 - 74 - 70
1088
would be continually obtained by the Select Committee. Lastly, but
probably most important, the Select Committee’s security procedures
precluded using an online system; therefore, the proposed system
would have to allow for batch application processing’.
After a few meetings in early April, it became apparent that a com-
puter system did exist that was well suited to fulfill the needs of the
Select Committee. It was BIBS YS.
Bibliographic System or BIBS YS is part of the Library of Congress
information network designed to enable the user to establish and main-
tain a machine-readable information file. I T sing a modified machine-
readable catalog (MABC II) internal processing format, it can. pro-
duce a variety of reports from the data base. For example, some of
those envisioned during the meetings were cross-reference reports on
individuals mentioned, special reports on specific individuals men-
tioned, chronological date-of-event reports, and KWIC (keyword in
context) indexes, all of which are discussed below.
Tags were used to identify fields of data at the time of data entry but
without compromising the use of the data in later processing. The
technique required a minim vim of machine identification data to be
input in conjunction with the textual information. The subsystems of
BIBSYS developed for the Select Committee’s use were the file main-
tenance cycle, the retrieval system, the field inversion cycle, and the
report cycle.
The Library of Congress made available for the Select Committee’s
use the following hardware: one IBM 370 MOD 145 (512K), three
3330 disk packs, one 2314 disk pack, two 2400 tape drives using nine
track tapes — 1600 BPI, two 1403 line printers, one 2501 card reader,
and a digi-data converter for MTST input. The software consisted of
OS/VS1 operating system, SORT and utilities, ANS COBOL com-
piler version 2, 12 application programs written in ANS COBOL,
and 2 ALC application programs.
With the approval of the Select Committee, the computer operation
was inaugurated. Within 2 weeks, sample programs had been adapted
for the committee’s use and tested. Sample records were processed in
early May, approximately 1 week before the public hearings began.
The tests were successful. On May 15, 1973, using a borrowed staff of
key-to-tape operators, the first actual records were input.
II. PROCESSING THE DATA
The input procedures were simple yet comprehensive. Each bit of
testimony, either public or confidential, was read by a staff of trained
researchers who abstracted out the essential facts. These researchers
dictated the source of the information or the witness, the date the
testimony was given, and the geographic location at which the testi-
mony was taken. The title of the document and the page number from
which the facts were abstracted were also included. Following this,
a complete summary of the information was dictated onto the tape. To
insure a chronological sorting capability, researchers were instructed
to produce one abstract for testimony concerning activities on a certain
date. Through this method, as will be discussed later, the data could be
sorted in dav-by-day chronological order.
The remaining fields in the records contained references to persons
quoted by the witness and the date of the quote, persons acting in the
1089
testimony along with the date and location of the activity. Lastly,
each record was categorized into 44 general subject/topics delineat-
ing the general areas under investigation.
Once this was dictated by the researchers, the cassette tapes were
given to a secretarial staff which transcribed the information onto
“input sheets.” These sheets were returned to the computer research
staff for a series of editorial changes, both substantive and technical.
Each sheet was reviewed for accuracy three times before it was
ready for computer input.
After the editorial process was complete, the records were given to
two key-to-tape machine operators who transferred the information
onto magnetic tape. Once on tape, the information was printed out
from the computer tapes or “dumped” to insure that no other errors
existed. These preliminary printouts or “dumps” were then edited
for substantive and technical errors. The tape, with corrections, was
returned to the key-to-tape machine operators who corrected the
errors on the tape. The tapes were then ready for the actual input into
the machine.
This initial process was later altered with the advent of Magnetic
Tape Selectric Typewriters (MTST’s). The use of these machines
enabled the computer staff to eliminate two steps in the input
process. Since a skilled secretary could format the data by adding
the appropriate computer codes directly from a cassette tape, there no
longer was a need to type up “input sheets.” Secondly, the MTST
machines simultaneously stored the data on a magnetic tape cartridge
and provided a readable copy of the data on tape. Therefore, the
staff no longer needed to “dump” or print out the tapes created.*
The computer used by the Select Committee was an IBM 370/145
located at the Library of Congress Annex. Elaborate security measures
were implemented designed to insure that no unauthorized individual
or organization could obtain information from the computer data base.
It was decided that no data would be stored at the Library itself.
Instead, the master tapes, containing all the data collected, were kept
secure within the Select Committee’s files. When the actual process-
ing took place on Monday, Wednesday, and Friday, from midnite to
6 a.m., the tapes were delivered to the computer room by a Select Com-
mittee staff courier along with a police escort. Once in the machine
room, the courier was not permitted to leave the tapes alone and only
he, a systems analyst, and an operator were permitted in the room
during the processing of the data. When Select Committee data was
processed, no noncommittee applications were run simultaneously;
a completely dedicated machine was used to insure no spillover of data
from or to the Select Committee’s computer file. Upon completion of
the processing, the courier, under police guard, returned to the Select
Committee offices with the tapes and any readable data.
III. FORMAT OF THE DATA
Each bit of information or “record” consisted of eight fields of data.
The first field contained a number uniquely identifying the record. The
second field contained four subfields : the name of the person or organi-
zation that was the source of the abstract, the date the testimony or data
*&ee p. 1095 for flowchart comparing 1 the procedures for inputting data by the key-to-
tape process and MTST process.
1090
was given, a computerized transfiguration of that same date listing the
year, month, and day in a six-digit number, and the city, State, or
location at which the information was taken. The next field contained
the title of the document from which the abstract was taken. The micro-
film number, indicating on which roll and frame the document
abstracted from was filmed, was included in this field.
After the third field, the abstract was included. These were sum-
maries of the factual testimony given. During the public hearings, only
facts relating to the events under investigation were abstracted. Discus-
sions of legal principles. Select Committee procedure, and anecdotes
were not abstracted. In most cases, these abstracts were based upon
testimony given concerning a certain date or event ; they were not
verbatim accounts of the actual testimony.
After the abstract, there existed in most every record a field which
contained “comments by the abstractor.” These comments ranged from
identifying the date of the transaction to pointing out that the abstract
was inconsistent with previously given testimony or identifying a
person involved in the transaction who was not otherwise identified
during the specific testimony abstracted. After the comment, the
abstractor who inserted the comment included his/her name and the
date the comment was inserted into the record. The sixth field which
followed contained the names of any individuals quoted in the abstract,
along with the date the quote was made.
As mentioned before, each record contained a cross-reference list of
all persons or organizations acting in the abstract. This was included in
the seventh field. There were four subfields to this field: the first, con-
tained the name of the person or organization ; the second contained the
date that person acted ; the third listed the six-digit transfiguration of
the computer date; and the fourth was the location that the person or
organization acted. Each record contained a variable number of these
fields based mainly on the nature of the abstract.
After the cross-reference field, each record contained at least one
subject-topic field. These fields contained three digit number desig-
nations of specific subject/topics and were designed to fit the various
areas under investigation.
This record format permitted the Select Committee to analvze the
stored data in the following methods: name discussed, date of event,
subject matter, persons quoted, witness, and source-document.
Part of the record input into the machine was a reference to each
person or organization about which the abstract dealt. In addition, the
date this person or organization acted was included. Therefore,
requests could be and were structured to instruct the computer to re-
trieve all records with an individual’s name in this reference field and
then to sort all these records in chronological order based upon the
date associated with that name. The result — a chronological report of
every fact about which testimonv had been given concerning any indi-
vidual or organization mentioned.
Since reconstructing a sequence of events was vital to the Select
Committee’s investigation, this was also a major feature of the com-
puter’s capability. Through proper programing, a complete chrono-
logical listing of events could be reconstructed based upon all the
records input into the data base. This enabled the staff to retrieve testi-
1091
mony from a multitude of witnesses concerning a particular date or
series of dates, and then analyze — given the nature or the source of the
information, that is, whether it was from a newspaper article or
given under oath — what actually happened.
Each record, as mentioned before, was categorized into various sub-
ject areas. If the testimony dealt with the Watergate phase of the in-
vestigation or campaign financing phase, it w T as appropriately coded
as such. These subject codes enabled the staff of the Select Committee
to retrieve and analyze data concerning general events within the
overall investigation. They could also be added as positive or negative
qualifiers to other retrieval requests to limit the topical scope of a
computer run. For example, a request could be made for all testimony
about a certain individual but only if that information dealt with the
general Watergate phase of the investigation or selected areas within
the other phases of the investigation.
Additionally, the format of the records permitted the staff to obtain
information from any document where a particular person was the
source or where a specific individual was quoted. This request could
be limited so that information was retrieved from certain documents,
either as a group — to wit, only executive sessions or interviews or
public statements under oath or individually, such as a particular
person’s interview — an executive session, or public testimony before the
Select Committee.
Thus, once testimony was placed on computer tapes, the problems
previously experienced with the card file system were alleviated. The
references could be rearranged on the machine’s “disk packs” and then
printed out in a desired format. Since it was done through automation
rather than manual review of a card file, the time necessary to complete
the request was minimal.
IV. INVESTIGATIVE USE OF THE COMPUTER
Since time constraints precluded training each staff member com-
puter request methodology, the Select Committee created a specially
trained staff to act as a liaison between the investigative staff and the
computer systems analyst. Requests from the investigative staff were
thus translated into the necessary computer terminology by the com-
puter staff.
When a particular witness or series of witnesses was to be interro-
gated, a request was made to retrieve from the computer all the infor-
mation the Select Committee had collected. For security reasons, no
staff member could obtain a computer printout without first receiving
written authorization from either the Chief Counsel or Chief Minority
Counsel. This insured that the heads of the staff knew who was get-
ting what information.
During the public hearings, printouts on the upcoming witnesses
were run regularly. Given the inputting system employed, it was pos-
sible to have one week’s testimony in the computer ready for retrieval
and analysis before the beginning of hearings the following week.
Thus, to maintain a complete file, new testimony was continually being
integrated with data obtained from prior witnesses.
1002
Printouts of information on each new witness were distributed to
the Chief Counsel and Chief Minority Counsel. The printouts listed
all information in the computer file about the witness that had been
stored in the machine up to that date. Once provided, the printouts
served as an additional source upon which interrogations were based.
The same procedure was followed for confidential interviews and
testimony taken in executive session. Printouts were produced, inte-
grated into the staff members’ personal notes, and the interrogation
undertaken. With the computer’s facility to “not forget” and a properly
entered name, date, or subject matter, the interrogator had at his
fingertips all information about the person to he interrogated.
Since data was input into the machine at least 3 times per week,
the printouts produced were very much up to date. A source document
title along with the pages from which the facts were abstracted was
included with each abstract. This enabled the user, if necessary, to go
to the original document to obtain the verbatim account.
In addition, the computer was employed to sort and analyze other
data. The Select Committee subpenaed telephone records from a num-
ber of individuals. These records wore presented to the staff of the
committee in the form of the monthly bill statements received by the
person under sub pen a from the telephone company.
A separate computer file was established listing the telephone num-
ber from which the call was made, the number to which the call was
placed, the date of the phone call, the locations (city, State) of both
phone numbers, the time of day of the call (designated in terms of a
2400 hour clock; 1630, 0843, et cetera) as well as the duration of the
call. Collect calls and those made from phones other than the business
or home phone of the caller, yet nonetheless billed to either the home or
business phone of the caller, were also included in the file.
Approximately 12,000 telephone calls were input into this file.
Printouts were prepared, upon request, that retrieved and sorted
phone calls from one number to another, all calls to one specific
number or series of numbers owned by an individual, phone calls
made during a specific time period, et cetera.
Thus the staff was able to review thousands of telephone calls
quickly and efficiently. Through the use of a master list of telephone
numbers and corresponding owners, the staff could isolate contacts
between particular persons either generally or on specific dates from
data that was accurately collected by an independent entity, the
telephone company.
Y. COOPERATION WITH OTHER INVESTIGATIVE
BODIES
Special Prosecutor Archibald Cox, shortly after his appointment
on May 18, 1973. held a series of meetings with the Select Committee’s
Chief Counsel. Mr. Cox realized that his office too could alleviate
many of the information retrieval problems facing it through the
use of a computer. After a few meetings between members of his
staff and the Select Committee computer staff. Special Prosecutor
Cox requested the Select Committee provide his Office with all public
information from its computer tapes. In addition, since the system was
1093
a totally new one, It was agreed that the Select Committee would train
personnel from his staff to abstract testimony and input it into the
computer. For 3 weeks, personnel from the Special Prosecutor’s Office
were trained by the computer staff of the Select Committee. From
September 14, 1 973. through the end of January 1974, the Select
Committee made available to the Special Prosecutor over 10,000
records containing public information. By doing so, it saved the
Special Prosecutor’s Office the almost 20,000 man-hours it had taken
the Select Committee to computerize the information.
On March 5, 1974, Senator Ervin, responding for the entire com-
mittee to a request by then Special Prosecutor Jaworski, agreed to
turn over all materials in the Select Committee’s files that would aid
him in his investigation. This agreement included all information on
computer tapes, over 25,000 records.
In January 1974, the House Judiciary Committee, investigating
the possible impeachment of the President, was, just as the Special
Prosecutor, faced with the problem of devising an information re-
trieval system. Mr. John Hoar, Special Counsel to the Judiciary
Committee, requested information from the Select Committee’s com-
puterized files. On February 7, 1974, the Select Committee met and
agreed to furnish the House Judiciary Committee with all informa-
tion on its computer tapes. One week later, duplicates of all the
Select Committee computer tapes were turned over to the House
Judiciary Committee, a transfer of information saving them thou-
sands of man-hours.
After receiving many requests from various State and local bar
associations for information concerning possible unethical conduct
on the part of attorneys in the Watergate incident, the committee
decided that it would be compatible with its investigation to supply
public information in printout form. Using as a conduit for requests
the American Bar Association Center for Professional Discipline,
the. committee made available to these bar associations public informa-
tion in printout form on individuals identified by the associations as
being under investigation.
Requests for public information printouts were also made to the
committee by attorneys representing individuals indicted for their
participation in the Watergate incident. Knowing the tremendous
value of computerized printouts and that these trials were to determine
ultimate individual criminal liability, the committee felt, out of
fairness, that these printouts should be made available to the defend-
ants. On May 9, 1974, the committee in executive session unanimously
voted to make available to these individuals, at their expense, print-
outs of public information and any confidential information that the
person making the request had given to the Select Committee.
VI. MICROFILM PROCEDURE
All documentary evidence obtained by the committee and maintained
in the security area was microfilmed to allow for greater accessibility
of this material to the staff. Because of security procedures all filming
and processing of the film was done on the premises of the committee.
Two microfilm viewers were installed to allow for immediate viewing
and analysis by any staff member.
1094
The computer record format had been adapted to provide for the
microfilm number, indicating the role and frame number where the
document could be found. It was included in all printouts.
VII. DISPOSITION
Pursuant to Senate Resolution 369, the Select Committee at the
termination of its activities transferred its records, including com-
puter tapes, to the Library of Congress. The Senate Committee on
Rules and Administration was empowered to exercise exclusive control
of and access to the use of such records. In doing so, the Senate Rules
Committee was directed to: “Make parts of such records or certified
copies of the same available to courts, the Special Prosecutor, con-
gressional committees and subcommittees, Federal departments or
agencies, or individuals satisfying the Senate Committee on Rules and
Administration of their legitimate need for parts of such records.”
Thus the information retrieval system that was responsible for the
efficient and effective way in which the Select Committee conducted
its investigative and reporting functions was made available to the
above mentioned for future application. Moreover, the Senate Com-
mittee on Foreign Relations became the first standing committee of
Congress to utilize the system in almost the same form used by the
Select Committee. It is a fitting commendation for the system that
was conceived so rapidly, yet worked so well, that its use be perpetuated
by the Congress of the United States.
1095
DATA PROCESSING SLOW
HEARINGS/INTERVIEWS
KEY-TO-TAPE
PROCEDURE
WITNESS TESTIMONY-
TRANSCRIPT COPY-
ABSTRACT TAPE-
TYPED INPUT SHEET
EDITING/CORRECTING
KEY TAPING
DUMP PRINT
EDITING/CORRECTING
KEY TAPE CORRECTIONS
COMPUTER RUN
MTST
PROCEDURE
/
/
MTST INPUT
I
EDITING/CORRECTING
MTST CORRECTION
I
TAPE CONVERSION
COMPUTER RUN
CHAPTER 11
Individual Views of Senators of the Select Committee
ME. SAM J. ERVIN, JE.
U.S. Senator From the State of North Carolina
Since the Senate Select Committee on Presidential Campaign Ac-
tivities is filing with the Senate its final report concerning the investi-
gation that body authorized and directed it to make, I deem it appro-
priate to state as succinctly as possible some of my personal observa-
tions respecting the tragic events known collectively as the Water-
gate, which disgraced the Presidential election of 1972.
In doing this, I ask and endeavor to answer these questions : What
was Watergate? Why was Watergate? Is there an antidote which
will prevent future Watergates? If so, what is that antidote?
Before attempting to answer these questions, I wish to make these
things plain :
1. I am not undertaking to usurp and exercise the power of im-
peachment, which, the Constitution confers upon the House of Repre-
sentatives alone. As a consequence, nothing I say should be construed
as an expression of an opinion in respect to the question of whether or
not President Nixon is impeachable in connection with the Watergate
or any other matter.
2. Inasmuch as its Committee on the Judiciary is now studying
whether or not it ought to recommend to the House the impeachment
of the President, I shall also refrain from making any comment on
the question of whether or not the President has performed in an
acceptable manner his paramount constitutional obligation “to take
care that the laws be faithfully executed.”
3. Watergate was not invented by enemies of the Nixon administra-
tion or even by the news media. On the contrary, Watergate was per-
petrated upon America by White House and political aides, whom
President Nixon himself had entrusted with the management of his
campaign for reelection to the Presidency, a campaign which was di-
vorced to a marked degree from the campaigns of other Republicans
who sought election to public office in 1972. 1 note at this point without
elaboration that, these White House and political aides were virtually
without experience in either Government or politics apart from their
association with President Nixon.
4. Life had not subjected these White House and political aides to
the disadvantaged conditions which are gliblv cited as the causes of
wrongdoing. On the contrary, fortune had smiled upon them. They
came from substantial homes, possessed extraordinary talents, had
(1097)
1098
had unusual educational opportunities, and occupied high social
positions.
5. Watergate was unprecedented in the political annals of America
in respect to the scope and intensity of its unethical and illegal actions.
To be sure, there had been previous milder political scandals in Amer-
ican history. That fact does not excuse Watergate. Murder and steal-
ing have occurred in every generation since Earth began, but that fact
has not made murder meritorious or larceny legal.
What Was Watergate?
President Nixon entrusted the management of his campaign for
reelection and his campaign finances to the Committee for the Re-
Election of the President, which was headed by former Attorney Gen-
eral John N. Mitchell, and the Finance Committee To Re-Elect the
President, which was headed by former Secretary of Commerce,
Maurice Stans. Since the two committees occupied offices in the same
office building in Washington and worked in close conjunction, it
seems proper to call them for ease of expression the Nixon reelection
committees.
Watergate was a conglomerate of various illegal and unethical ac-
tivities in Which various officers and employees of the Nixon reelec-
tion committees and various White House aides of President Nixon
participated in varying ways and degrees to accomplish these succes-
sive objectives :
1. To destroy, insofar as the Presidential election of 1972 was con-
cerned, the integrity of the process by which the President of the
United States is nominated and elected.
2. To hide from law enforcement officers, prosecutors, grand jurors,
courts, the news media, and the American people the identities and
wrongdoing of those officers and employees of the Nixon reelection
committees, and those White House aides who had undertaken to
destroy the integrity of the process by which the President of the
United States is nominated and elected.
To accomplish the first of these objectives, the participating officers
and employees of the reelection committees and the participating
White House aides of President Nixon engaged in one or more of these
things :
1. They exacted enormous contributions — usually in cash — from cor-
porate executives by impliedly implanting in their minds the impres-
sions that the making of the contributions was necessary to insure that
the corporations would receive governmental favors, or avoid govern-
mental disfavors, while President Nixon remained in the White House.
A substantial portion of the contributions were made out of corporate
funds in violation of a law enacted by Congress a generation ago.
2. They hid substantial parts of these contributions in cash in safes
and secret deposits to conceal their sources and the identities of those
who had made them.
3. Thev disbursed substantial portions of these hidden contributions
in a surreptitious manner to finance the bugging and the burglary of
the offices of the Democratic National Committee in the Watergate
complex in Washington for the purpose of obtaining political intel-
ligence ; and to sabotage by dirty tricks, espionage, and scurrilous and
1099
false libels and slanders the campaigns and the reputations of honor-
able men, whose only offenses were that they sought the nomination of
the Democratic Party for President and the opportunity to run against
President N ixon for that office in the Presidential election of 1972.
4. They deemed the departments and agencies of the Federal Gov-
ernment to be the political playthings of the Nixon administration
rather than impartial instruments for serving the people, and under-
took to induce them to channel Federal contracts, grants, and loans
to areas, groups, or individuals so as to promote the reelection of the
President rather than to further the welfare of the people.
5. They branded as enemies of the President individuals and mem-
bers of the news media who dissented from the President’s policies
and opposed his reelection, and conspired to urge the Department of
Justice, the Federal Bureau of Investigation, the Internal Revenue
Service, and the Federal Communications Commission to pervert the
use of their legal powers to harass them for so doing.
6. They borrowed from the Central Intelligence Agency disguises
which E. Howard Hunt used in political espionage operations, and
photographic equipment which White House employees known as
the “Plumbers” and their hired confederates used in connection with
burglarizing the office of a psychiatrist which they believed contained
information concerning Daniel Ellsberg which the White House was
anxious to secure.
7. They assigned to E. Howard Hunt, who was at the time a White
House consultant occupying an office in the Executive Office Building,
the gruesome task of falsifying State Department documents which
they contemplated using in their altered state to discredit the Demo-
cratic Party bv defaming the memory of former President John Fitz-
gerald Kennedy, who as the hapless victim of an assassin’s bullet had
been sleeping in the tongueless silence of the dreamless dust for 9 years.
8. They used campaign funds to hire saboteurs to forge, and dis-
seminate false and scurrilous libels of honorable men running for the
Democratic Presidential nomination in Democratic Party primaries.
During the darkness of the early morning of June 17, 1972, James
W. McCord, the security chief of the John Mitchell committee, and
four residents of Miami, Fla., were arrested by Washington police
while they were burglarizing the offices of the Democratic National
Committee in the Watergate complex to obtain political intelligence.
At the same time, the four residents of Miami had in their possession
more than fifty $100 bills which were subsequently shown to be a part
of campaign contributions made to the Nixon reelection committees.
On Sentember 15. 1972, these five burglars, E. Howard Hunt, and
Gordon Biddy, general counsel of the Stans committee, were indicted
bv the grand jury on charges arising out of the bugging and burglary
of the Watergate.
They were placed on trial upon these charges before Judge John
Sirica, and a petit jury in the U.S. District Court for the District of
Columbia in January 1973. At that time. Hunt and the four residents
of Miami pleaded guilty, and McCord and Biddy were found guilty
by the petit jury. None of them took the witness stand during the trial.
The arrest of McCord and the four residents of Miami created con-
sternation in the Nixon reelection committees and the White House.
Thereupon, various officers and employees of the Nixon reelectiom
1100
committees and various White House aides undertook to conceal from
law-enforcement officers, prosecutors, grand jurors, courts, the news
media, and the American people the identities and activities of those
officers and employees of the Nixon reelection committees and those
White House aides who had participated in any way in the Watergate
affair.
Various officers and employees of the Nixon reelection committees
and various White House aides engaged in one or more of these acts
to make the concealment effective and thus obstruct the due adminis-
tration of justice :
1. They destroyed the records of the Nixon reelection committees
antedating the hugging and the burgl ary.
2. They induced the Acting Director of the FBI, who was a Nixon
appointee, to destroy the State Department documents which E.
Howard Hunt had been falsifying.
3. They obtained from the Acting Director of the FBI copies of
scores of interviews conducted by FBI agents in connection with their
investigation of the bugging and the burglary, and were enabled
thereby to coach their confederates to give false and misleading state-
ments to the FBI.
4. They sought to persuade the FBI to refrain from investigating
the sources of the campaign funds which were used to finance the bug-
ging and the burglary.
5. They intimidated employees of the Nixon reelection committees
and employees of the White House by having their lawyers present
when these employees were being questioned by agents of the FBI,
and thus deterred these employees from making full disclosures to the
FBI.
6. They lied to agents of the FBI, prosecutors, and grand jurors
who undertook to investigate the bugging and the burglary, and to
Judge Sirica and the petit jurors who tried the seven original Water -
gate defendants in January 1973.
7. They persuaded the Department of Justice and the prosecutors
to take out-of-court statements from Maurice Stans, President Nixon's
chief campaign fundraiser, and Charles Colson, Egil Ivrogh, and
David Young, "White House aides, and Charles Colson's secretary,
instead of requiring them to testify before the grand jury investigating
the bugging and the burglary in conformity with the established pro-
cedures governing such matters, and thus denied the grand jurors
the opportunity to question them.
8. They persuaded the Department of Justice and the prosecutors
to refrain from asking Donald Sejrretti, their chief hired saboteur,
any questions involving Herbert W. Kalmbarh, the President’s per-
sonal attorney, who was known by them to have paid Segretti for
dirty tricks he perpetrated upon honorable men seeking the Demo-
cratic Presidential nomination, and who was subsequently identified
before the Senate Select Committee as one who played a major role
in the secret delivery of hush money to the seven original Watergate
defendants.
9. They made cash payments totaling hundreds of thousands of
dollars out of campaign funds in surreptitious ways to the seven
original Watergate defendants as hush money to buy their silence
and keep them from revealing their knowledge of the identities of
1101
the officers and employees of the Nixon reelection committees and the
White House aides who had participated in the Watergate.
10. They gave assurances to some of the original seven defendants
that they would receive Presidential clemency after serving short
portions of their sentences if they refrained from divulging the iden-
tities and activities of the officers and employees of the Nixon reelection
committees and the White House aides who had participated in the
Watergate affair.
11. They made arrangements by which the attorneys who repre-
sented the seven original Watergate defendants received their fees in
cash from moneys which had been collected to finance President
Nixon’s reelection campaign.
12. They induced the Department of Justice and the prosecutors of
the seven original Watergate defendants to assure the news media and
the general public that there was no evidence that any persons other
than the seven original Watergate defendants were implicated in any
way in any Watergate-related crimes.
13. They inspired massive efforts on the part of segments of the
news media friendly to the administration to persuade the American
people that most of the members of the Select Committee named by the
Senate to investigate the Watergate were biased and irresponsible men
motivated solely by desires to exploit the matters they investigated for
personal or partisan advantage, and that the allegations in the press
that Presidential aides had been involved in the Watergate were
venomous machinations of a hostile and unreliable press bent on de-
stroying the country’s confidence in a great and good President.
One shudders to think that the Watergate conspiracies might have
been effectively concealed and their most dramatic episode might have
been dismissed as a “third-rate” burglary conceived and committed
solely by the seven original Watergate defendants had it not been
for the courage and penetrating understanding of Judge Sirica, the
thoroughness of the investigative reporting of Carl Bernstein, Bob
Woodward, and other representatives of a free press, the labors of the
Senate Select Committee and its excellent staff, and the dedication
and diligence of Special Prosecutors Archibald Cox and Leon Jawor-
ski and their associates.
Why Was Watergate ?
Unlike the men who were responsible for Teapot Dome, the Presi-
dential aides who perpetrated Watergate were not seduced by the love
of money, which is sometimes thought to be the root of all evil. On the
contrary, they were instigated by a lust for political power, which is at
least as corrupting as political power itself.
They gave their allegiance to the President and his policies. They
had stood for a time near to him, and had been entrusted by him with
great, governmental and political power. They enjoyed exercising
such power, and longed for its continuance.
They knew that the power they enjoyed would be lost and the poli-
cies to which they adhered would be frustrated if the President should
be defeated.
As a consequence of these things, they believed the President’s re-
election to be a most worthy objective, and succumbed to an age-old
temptation. They resorted to evil means to promote what they con-
ceived to be a good end.
1102
Their lust for political power blinded them to ethical considera-
tions and legal requirements ; to Aristotle’s aphorism that the good of
man must be the end of politics; and to Grover Cleveland’s conviction
that a public office is a public trust.
They had forgotten, if they ever knew, that the Constitution is de-
signed to be a law for rulers and people alike at all times and under all
circumstances ; and that no doctrine involving more pernicious conse-
quences to the commonweal has ever been invented by the wit
of man than the notion that any of its provisions can be suspended by
the President for any reason whatsoever.
On the contrary, they apparently believed that the President is above
the Constitution, and has the autocratic power to suspend its provi-
sions if lie decides in his own unreviewable judgment that his action in
so doing promotes his own political interests or the welfare of the
Nation. As one of them testified before the Senate Select Committee,
they believed that the President has the autocratic power to suspend
the fourth amendment whenever he imagines that some indefinable
aspect of national security is involved.
I digress to reject this doctrine of the constitutional omnipotence of
the President. As long as I have a mind to think, a tongue to speak,
and a heart to love my country, I shall deny that the Constitution con-
fers any autocratic power on the President, or authorizes him to con-
vert George Washington’s America into Gains Caesar’s Rome.
The lust for political power of the Presidential aides who perpe-
trated Watergate on America blinded them to the laws of God as well
as to the laws and eth ics of man.
As a consequence, they violated the spiritual law which forbids men
to do evil even when they think good will result from it, and ignored
these warnings of the King James version of the Bible :
There is nothing covered, that shall not be revealed;
neither hid, that shall not be known.
Be not deceived ; God is not mocked : For whatsoever a man
soweth, that shall he also reap.
I find corroboration for my conclusion that lust for political power
produced Watergate in words uttered by the most, eloquent and
learned of all the Romans, Marcus Tullius Cicero, about 2100 years
ago. He said :
Most men, however, are inclined to forget justice altogether,
when once the craving for military power or political honors
and glory has taken possession of them. Remember the say-
ing of Ennius, “When crowns are at stake, no friendship is
sacred, no faith shall be kept.”
As one after another of the individuals who participated in Water-
gate goes to prison, we see in action an inexorable spiritual law which
Rudyard Kipling phrased in this fashion in his poem about Tomlin-
son’s Ghost :
“For the sin ye do by two and two,
You must pay for one by one,”
As we contemplate the motives that inspired their misdeeds, we
acquire a new awareness of the significance of Cardinal Wolsey’s
poignant lament :
1103
“Had I but serv’d my God with half
The zeal I serv’d my King,
He would not in mine age have left me
Naked to mine enemies.”
Tun Antidote for Future Watergates
Is there an antidote which will prevent future Watergates? If so,
what is it. ?
The Senate Select Committee is recommending the enactment of
new laws which it believes will minimize the danger of future Water-
gates and make more adequate and certain the punishment of those
who attempt to perpetrate them upon our country.
Candor compels the confession, however, that law alone will not
suffice to prevent future Watergates. In saying this, I do not disparage
the essential role which law plays in the life of our Nation. As one
who has labored as a practicing lawyer, a judge, and a legislator all of
my adult years, I venerate the law as an instrument of service to so-
ciety. At the same time, however, I know the weakness of the law as
Aveli as its strength.
Law is not self-executing. Unfortunately, at times its execution
rests in the hands of those who are faithless to it. And even when its
enforcement, is committed to those who revere it, law merely deters
some human beings from offending, and punishes other human beings
for offending. It does not make men good. This task can be performed
only by ethics or religion or morality.
Since politics is the art. or science of government, no man is fit to
participate in politics or to seek or hold public office unless he has two
characteristics.
The first of these characteristics is that he must understand and be
dedicated to the true purpose of government, which is to promote the
good of the people, and entertain the abiding conviction that a public
office is a public trust, which must never be abused to secure private
advantage.
The second characteristic is that he must possess that intellectual
and moral integrity, which is the priceless ingredient in good character.
When all is said, the only sure antidote, for future Watergates is
understanding of fundamental principles and intellectual and moral
integrity in the men and women who achieve or are entrusted with
governmental or political power.
Josiah Gilbert Holland, a poet of a bygone generation, recognized
this truth in a poem which he called “The Day’s Demand”, and which
I like to call “America’s Prayer”. I quote his words :
“God give us men ! A time like this demands
Strong minds, great hearts, true faith and ready hands ;
Men whom the lust of office does not kill ;
Men whom the spoils of office cannot buy ;
Men who possess opinions and a will ;
Men who have honor — men who will not lie ;
Men who can stand before a demagogue.
And damn his treacherous flatteries without, winking ;
Tall men, sun-crowned, who live above the fog
In public duty, and in private thinking.”
35-687 0 - 74 - 71
MR. HOWARD H. BAKER, JR.
U.S. Senator From the State oe Tennessee
I believe that the activities and inquiry of the Senate Select Com-
mittee on Presidential Campaign Activities have been, by and large,
useful and appropriate. The bipartisan tone for the committee was
established by the unanimous adoption of Senate Resolution 60 by
the vote of 77 to 0 on February 7, 1973. I think, with some exceptions
that bipartisan attitude was preserved throughout the long and tedious
proceedings. From time to time, there occurred conflicts and disagree-
ments in the committee, and between the respective staffs, but they
usually were resolved. The final act of the Select Committee is to file
its report ; and 1 am pleased. It is not a perfect report. Some may say
that it is without grace or style, and that is probably true ; but it is
the culmination of an extraordinary effort, and I am particularly
gratified that the majority and minority staffs cooperated carefully
in comparing their respective views and adjusting the text so that in
most instances a satisfactory joint staff position was submitted to the
committee for adoption. The report is not adjudicatory, and indeed
it often goes to some lengths to avoid “finding fact” in the traditional
sense. This requirement was directed to the committee staff by the
chairman in deference, I believe, to the sensitivity of litigation in
process, or upcoming, and of course to the inquiry into impeachment
by the House of Representatives. I commend the chairman for that
point of view.
In an historical perspective, I believe that the committee’s principal
service may have been in the public ventilation of the facts and cir-
cumstances collectively assembled under the title of Watergate. The
committee’s gathering and disseminating the often shocking, fre-
quently embarrassing, and sometimes incriminating evidence and testi-
mony before it certainly should exert a deterrent effect ; and that effect
may be far more important than the committee’s recommendations.
I rather suspect that it may be a long while before a future President
permits the occurrence of such unfortunate circumstances. If that is
the case, then the committee’s laborious effort, the considerable
expense, and the national frustration will have been worth the
investment.
I hope so.
Recommendations
I. Establishment of an Office of Public Prosecutor within the
Department of Justice, appointed by the President for a fixed term
and subject to Senate confirmation.
The committee report recommends the creation of a judicially
appointed permanent Public Attorney to investigate and prosecute
cases in which there are conflicts of interest within the executive
branch. This recommendation and my own evidence recognition that
( 1105 )
1106
the Federal Government is poorly equipped for investigating and
prosecuting crimes allegedly committed by high-ranking executive
branch officials. Prior to the appointment of the Watergate Special
Prosecutor, there did not exist within the Department of Justice a divi-
sion solely and specifically entrusted with the authority to investigate
allegations of official misconduct, cloaked with the requisite inde-
pendence and statutory authority necessary for unimpeded access to
Government officials and documents, and I believe the investigation
would have proceeded more rapidly and effectively had such an
arrangement existed.
Consequently, I agree in principle with the committee report’s
recommending the establishment of a permanent Public Prosecutor,
possessing a statutory mandate to investigate and prosecute allegations
of governmental misconduct. I have great doubts, however, regarding
the constitutionality of the committee’s proposal that the Public
Attorney be appointed by the representatives of the Judiciary.
The appointment of a permanent Public Prosecutor, within the De-
partment of Justice, for a fixed 6-year term as nominated by the
President and subject to Senate confirmation possesses none of the
potential constitutional infirmities presented by a judicially appointed
Public Prosecutor, as were discussed in the Senate debate this past
fall on the Hart-Bayh Special Prosecutor bill.
Senator Percy and I, together with Senators Brock, Cook, and
Young, introduced S. 2734 on November 20, 1973, that provided for
the Presidential appointment of a Special Watergate Prosecutor, sub-
ject to confirmation by the Senate-
Senator Ervin on June 17, 1974, introduced S. 3652, providing for
Presidential appointment of a permanent Public Prosecutor with
Senate confirmation and a fixed term of 6 years. I believe both of these
proposals avoid the constitutional pitfalls of the committee’s
recommendation and are attractive alternatives.
II. Establishment within the Congress of a Joint Intelligence
Oversight Committee so as to provide for increased congressional
monitoring of governmental intelligence-gathering activities.
Both in the committee report and in other committee documents,
there is found a substantial body of evidence regarding the activities of
the Central Intelligence Agency, the Federal Bureau of Investigation,
the National Security Agency, and other governmental intelligence-
gathering and/or investigative organizations, Which provides insight
into the activities, as well as the abuses, of these organizations relative
to the matters under the Select Committee’s perusal. Testimony was
presented to the committee to the effect that there was an attempt by
high-ranking White House officials to somehow “involve” the CIA
in the Watergate coverup; that the FBI investigation of the Water-
gate matter was impeded at the very highest levels of the Bureau
itself ; and that under the supervision of the White House, intelligence-
gathering operations, including unlawful activity, were conducted out-
side the purview of the congressionally authorized intelligence and in-
vestigative agencies. Moreover, as indicated in separate committee
documents, the CIA provided extensive logistical support to the par-
ticipants in both the Fielding and Democratic National Com-
1107
rnittee break-ins and expressed a keen interest in the subsequent
investigations.*
The intelligence-related material before the committee is not con-
clusive. It does not answer the question of what the President or other
individuals knew or when they knew it, nor does it explain why the
Democratic National Committee headquarters twice was the target
of an illegal entry. It seems apparent, however, that congressional
committee oversight did not function effectively as a deterrent to those
who may have sought to utilize governmental intelligence and in-
vestigative agencies for unlawful or unauthorized purposes.
Thus, because of the cost, the secrecy, the lack of effective super-
vision, the uncertainty of domestic activities, and the extreme dif-
ficulty in obtaining access to classified materials, I am of the opinion
that the subject of Government intelligence operations requires ex-
tensive further examination. I wish to associate myself with the rec-
ommendation in the committee report for closer supervision of Cen-
tral Intelligence Agency activities by the appropriate congressional
oversight committees.
I would go one step further and propose that the Congress should
consider the creation of a Special Joint Committee on Intelligence
Activities. I believe the highly sensitive nature of intelligence opera-
tions, the expanding scope of the intelligence gathering requirement,
and the enormous cost and dedication of manpower and resources to
the intelligence undertaking in the United States, fully justifies a new
committee arrangement. Such a committee, not dissimilar to the Joint
Committee on Atomic Energy, could more effectively coordinate
among the various intelligence investigative agencies, now subject to
congressional oversight, than can the several committees now having
partial oversight responsibilities. Thus, I believe that a joint com-
mittee would present no legitimate threat to the intelligence com-
munity in terms of jeopardizing or compromising their necessary in-
telligence operations, and would provide greater assurance that our
intelligence gathering and investigative agencies are complying with
the law and are working in the best interest of the Nation.
III. Reformation of congressional investigatory hearing proce-
dures so as to provide increased protection for the rights of
individuals.
Although this recommendation does not clearly fall within the prov-
ince of S. Res. 60, the Select Committee hearings highlighted the fact
that congressional investigatory proceedings exhibit a determination
to ferret out the facts even if the investigative process may grievously
injui’e the protected rights of individuals who are or may become de-
fendants in judicial proceedings. Thus, I believe that Congress should
give careful attention to the codification of rules of legislative hearing
procedure so as to provide the same assurance that individual constitu-
tional rights are not impaired by legislative hearings as the Federal
Rules of Criminal Procedure provide in criminal proceedings. I believe
*A summary of the results of the investigation undertaken by the minority staff bearing
upon the issue of the extent of involvement of the CIA in several respects may be found in
a report prepared at my request, which is appended hereto at p. 1115. While the report
draws no evidentiary conclusions, it does recommend specific additional inquiries which
could be made by existing oversight committees of the Congress or by the joint committee
proposed by my recommendation II above.
1108
that such rules should provide a mechanism whereby witnesses and
proposed witnesses before legislative hearings, who are or may be sub-
ject to criminal prosecution, can be identified and afforded additional
procedural protections than is now the case. For instance, a “vulner-
able” witness might be given the right to have counsel participate in
the questioning of other witnesses presenting testimony adverse to the
interests of the vulnerable witness. In addition, the Congress should
study the advisability of imposing common law and/or Federal evi-
dentiary rules in certain types, if not all, legislative hearings. Finally,
the Congress may wish to establish a Legislative Public Defender
whose duty would be to proctor legislative hearings and investigations
so as to provide for the protection of the rights of individuals.
As exemplified by the history of the Select Committee, the investi-
gatory power of a congressional committee is extremely broad and
pervasive, and, in actuality, is restricted only by the wording of the
resolution or other legislative vehicle creating the committee and the
authority of the committee to investigate such matters. While litiga-
tion and congressional discretion have provided some due process
limitations upon congressional investigations, a congressional com-
mittee is not a jury nor a court; and common law and statutory evi-
dentiary rules are not applicable to committee investigations. The most
obvious example is hearsay testimony, which is recited throughout
the committee report. Moreover, through its contempt power, “use”
immunity, and public pressure, a congressional committee can in many
cases indirectly overcome an individual’s privilege against self -in-
crimination in a manner which could never occur in a court of law.
As mentioned above, individuals whose conduct is being investigated,
often are not afforded the opportunity to have counsel “cross examine”
witnesses presenting testimony detrimental to them. Thus, while I will
protect jealously the privilege and the right of congressional com-
mittees to conduct inquiries concerning the administration of existing
laws, as well as new statutes, I believe that legislation conveying the
recognition of the need to protect the rights of potential defendants,
the sanctity of criminal trials and the impartiality of the impeachment
process can be effected without constituting a detriment to a legislative
committee’s fact-finding power.
IV. Campaign and electoral reforms.
Among the several inadequacies in our political process highlighted
by Watergate, none is more glaring than the need for comprehensive
campaign and electoral reform. The types of campaign abuses preva-
lent during the 1972 campaigns, though shocking in terms of their
scope, were by no means unprecedented. The fact of the matter is, and
has been, that political campaigns take place in a legal vacuum. With
the possible exception of the Federal Elections Campaign Act of 1971,
there has been no significant attempt by Congress to regulate political
campaigns since the Corrupt Practices Act of 1925 ; and even that was
“more loophole than law.” Thus, it is not surprising that campaigns
have taken on the appearance of a political free-for-all in which the
distinction between illegal, unethical, and immoral conduct is gen-
erally obscured.
1109
The fallout from that atmosphere is cumulative and has resulted
in a devastating erosion of public trust and confidence in the process
by which public officials are elected. Moreover, if the country is to bene-
fit from the experience of the past 2 years, it is essential that the Con-
gress undertake fundamental reform of the electoral process — reform
which includes not only campaign finance, but also various aspects of
the actual election process.
The type of reform most vital, and about which the Select Commit-
tee assembled a wealth of data, was campaign finance. From a financial
standpoint, the 1972 campaign for President was no different from past
campaigns in that ' here was no effective regulation of the source, form
or amount of political contributions. Although the Federal Elections
Campaign Act of 1971 required more complete disclosure of contribu-
tions, the 1972 campaign was still largely funded through a system of
unrestricted, large sum private financing. It was this system that per-
mitted one individual to give $2 million while over 200 million people
did not contribute. This system gave rise to the allegations that
the milk producers received an increase in the support price of milk in
return for the pledge of large contributions. It was this system which
permitted individuals to launder cash through Mexico in an effort
to suppress the identity of the source. And finally, it was this system
which permitted the accumulation of $350,000 in a White House safe,
none of which was reported and most of which purportedly was dis-
bursed for political espionage and alleged hush money. Conse-
quently, it is not surprising that considerable support has developed
within the country and the Congress for complete abandonment of
this system in favor of substantial public financing. I can sympathize
with that view, for public financing certainly appears pure and abso-
lute ; but it is not the answer.
Although public financing probably would solve a limited number of
problems afflicting the present process, it would almost certainly
create an equal number of potentially greater dangers. Some of those
would stem, no doubt, from the incestuous nature of the Government’s
financing the process by which it is selected. The Responsiveness por-
tion of the Select Committee’s report details the repeated efforts of
members of the administration to influence or abuse the various de-
partments and agencies for purely political purposes. Would it not
be possible under a system of public financing, in which an arm of
the Government was responsible for allocating funds, to abuse that au-
thority on behalf of one candidate or party under the guise of bureau-
cratic red tape? Some would argue that it is overly cynical to make
such an assumption, but perhaps it would have been cynical a few
years ago to assume that an administration would try to actively
utilize its broad powers to punish political adversaries. We can ill
afford to overlook the possibility of such an incident in the public fi-
nancing sector 10 or 20 years from now.
Another serious problem with comprehensive public financing, in
my judgment, is the effect it will have upon the individual’s first
amendment right of freedom of political expression. I believe that
right gives each citizen the right of expressing himself politically,
whether by contribution, or otherwise, or conversely, refraining from
such expression; and in a Ration which prides itself on protecting in-
1110
dividual rights, the option to refrain from exercising that right must
be considered as vital as the right itself. I, therefore, urge that it is
essential to maintain participation in our political process on a volun-
tary basis, while attempting to increase the opportunities and incen-
tives to participate.
Public financing, however, provides no such choice. Rather, it states
that the need to eliminate the influence of large sum contributors and
special interests is so compelling that we must abandon the use of all
voluntary private financing in favor of mandatory, public financing ;
and in the case of the latter, we have no control over which candidate
receives our tax dollars, nor whether they are actually used for that
purpose. In fact, taxpayers would be directly supporting candidates
whom they consider repugnant.
If it were merely a question of unrestricted, private financing, or
comprehensive public financing, then I would support the latter. But,
there is a third, more reasonable option which would retain some con-
tinuity while avoiding some of the hazards of public financing. That
option is a system of effectively regulated private financing in which
the incentives for small contributions are vastly enhanced. Such a sys-
tem is in essence what the Select Committee recommends. A strict
limitation on the size, amount, and form of private contributions, a
single campaign committee, a single campaign depository, an overall
expenditure limitation, a requirement for full public disclosure before,
rather than after the election, and an independent elections commis-
sion, are all necessary reforms which would impose order upon the
current campaign chaos. Moreover, I would make one further recom-
mendation which would do more to eliminate distortive influence of
special interests than any other single action, and that is, to prohibit,
altogether, contributions from any and all organizations. Only in-
dividuals can vote, and I believe only individuals should be permitted
to contribute.
Some have argued, however, that if we eliminate the financial in-
fluence of the special interests and strictly limit the size of individual
contributions, we cannot effectively fund a competitive two-party sys-
tem. Indeed, without some new incentives for millions of Americans
to make small contributions, such a system would clearly discourage
constructive opposition and tend to bolster the inherent advantages of
incumbency. Thus, I would propose a 100 percent tax credit on all con-
tributions made in a calendar year up to $50 on an individual return
and $100 on a joint return. Such a credit would enable each taxpayer to
divert up to $50 of his tax money to a candidate or candidates if, and
only if, he desires to do so. This approach would be entirely voluntary,
thereby protecting the individual’s freedom of political expression.
Moreover, it would generate sufficient funds so that we might avoid
having to resort to the direct appropriation of tax moneys for politi-
cal purposes. A realistic and effective tax incentive, combined with the
aforementioned list of statutory reforms, would afford a fair and com-
petitive means of funding political campaigns.
I am convinced further that we cannot hope to reverse the current
trend of erosion of public trust and confidence without sharply in-
creasing public participation in the political process. In that regard, I
would urge that serious consideration be given automatic registration
of voters in Federal elections at age 18. The history of the United
mi
States has been a history of the extension of the voting franchise. Yet,
even today, a significant number of our citizens are effectively pre-
vented from participating in elections by complex, and often archaic,
registration and residency requirements. The postcard voter registra-
tion bill passed by the Senate last year rvas an effort to deal with this
problem, but I opposed it because of my concern for the potential for
mail fraud and abuse of such a system.
Several Western nations have already successfully implemented a
form of automatic voter registration. In the Scandinavian countries,
for example, and in Switzerland, every eligible citizen is registered ex
officio in a voting register. A list of voters is published by the elections
authorities in advance of the election date. Any citizen whose name has
not been included in the list then has until approximately a week be-
fore the election to correct the situation. In the United States, however,
citizens still must contend with what amounts to a perpetual registra-
tion process. I fully realize that some difficulties will arise in translat-
ing automatic registration to the realities of the American experience
and attempting to reconcile it with State registration procedures. Per-
haps social security numbers could be utilized to standardize this
procedure, since more than 95 percent of eligible voters are already
registered with social security. In any event, the concept deserves con-
sideration, in my view; and, if workable, it could provide a valuable
incentive to increase citizen participation.
I would also urge major reform of our present spasmodic system of
Presidential primaries. There are essentially three alternatives in this
regard : a refinement of the present system requiring the 25 States who
hold Presidential primaries to do so on four or five specific dates at 2
or 3 week intervals; a single national primary for each party with
a subsequent runoff unless one candidate polls more than 40 percent ;
and a system of regional primaries also held at specific intervals, but
encompassing all of the country.
Of these three proposals, I am most inclined to support the one for a
system of regional primaries in which every eligible voter who desires
to participate in the selection of a party nominee can do so by voting
in the regional primary which includes his State. This would permit
the millions of Americans who support candidates who will not re-
ceive the party nomination to express that support in a meaningful
way. It would also give them a personal stake in the election and
increase the likelihood of their participation in the subsequent general
election campaign. Specifically, I would propose dividing the country
into four geographic regions, largely along the lines of time zones so
as to avoid holding a Southern or a New England primary with a
distinct ideological slant. I would make those regions of roughly equal
population and would hold the four primaries at 3-week intervals
beginning in early June and ending in early August. The respective
primary candidates would compete for State delegates who would
be won according to the proportion of vote received in each State,
rather than on a winner-take-all basis. Although I am aware of the
high cost involved in running regional primaries, the basic idea is
to vastly expand the public participation in the nominating process
and to significantly reduce the official length of Presidential campaigns.
As it is now, the first Presidential primary normally takes place
in early March with the general election 8 months later, in November.
1112
But, as I see it, there is absolutely no reason why that process must
take that long. It exhausts the candidates, costs exorbitant sums of
money, and eventually bores a great many people. I would propose
that all primaries for Federal office be held no earlier than the first
of June and no later than the 15th of August. This would significantly
shorten the official length of campaigns for Federal office and permit
the Congress to work at relatively full strength for 4 months before
most Members are forced to return to their States or districts to cam-
paign full-time for the nomination.
I also recommend that we open and close polls all across the
country at a uniform time and that they be opened a full 24 hours.
The arguments for this are simple and well known ; but briefly stated,
this is the best way I know of to prevent the harmful effects of broad-
cast networks projecting the outcome of elections, based on very early
returns, when polls in the Western States are still open. Moreover, 24
hours would maximize the individual’s opportunity to vote before,
after or during work.
I further recommend that the Presidential electoral system be made
more responsive and representative by the abolition of the electoral
college, that 18th century vestigial remnant of constitutional com-
promise. I personally favor and have always supported the direct
election of the President by popular vote, but having unsuccessfully
urged that move, I am willing to settle for an improvement if not a
cure for this situation. I propose that Congress and the States fully
debate the merits of popular vote, congressional district vote, propor-
tional allocation of electoral votes by States according to the popular
vote, or any other electoral process calculated to eliminate what I view
as the two most onerous elements of the present system. That is to say,
one, the winner-take-all by State process, which created and perpetu-
ated the one-party South for a century after the Civil War, and, sec-
ond, the possibility of the selection of the President by the House of
Representatives, which constitutes the most undemocratic of all of
the allocation systems. Some say that the reform of the electoral col-
lege is not related to the mandate of Senate Resolution 60, but I dis-
agree ; I think that the sensitivity of the electoral system, the coherence
of the selection process, the vitality of the two-party system, and the
integrity of financial support are essential to the political prosperity
of the country and are paramount in their importance to every other
democratic consideration.
V. The institution of the Presidency.
I believe there exists a fundamental infirmity in the relationship of
the Chief Magistrate of the Nation to the two other coordinate
branches of Government. This development is not of recent origin — it
has matured steadily since at least the beginning of the 20th century
and at an accelerated pace since the great depression of the 1930’s.
The Presidency has become splendid, and it has become increasingly
isolated. Surrounded by the trappings of privilege and the sanctuary
of security, both national and personal, the Presidency is indeed the
most equal of all the equal branches. Its jurisdiction and the scope and
sweep of its powers are enormous and broad. While it may be that
gradually grafting onto the Presidency of additional powers and
authorities is a natural development in the evolution of our democracy,
1113
there are certain elements of what has come to be known as a “strong”
Presidency that I do not believe to be desirable.
In recent years, the President’s personal staff has served as his coun-
cil of advisers, and in some instances, the primary delegates of Pres-
idential authority. This is counter to the historical concept of the
Cabinet system where the President’s Cabinet served as his principal
advisers, in addition to being the administrators of the several depart-
ments of the Government. By way of example, under article 2, section 2,
the President is empowered constitutionally to require the -written
opinion of the principal officer in the executive departments. I think
that the original Cabinet system is preferable to a plethora of Presi-
dential counselors, White House counselors, special advisers and the
like. The cross-pollination that occurs in councils of individuals oper-
ating from independent bases of jurisdictional authority is distinctly
preferable to the highly structured, closely supervised personal staff.
Strong persons in strong positions are a significant force for good or
evil ; and I believe that the opportunity for good is greatly expanded
and the possibility of a “Yes” man syndrome is greatly diminished in
the Cabinet situation.
The underutilization of the resources and personnel of the Depart-
ment of Justice and almost complete reliance upon the White House
legal staff is another recent development which I consider to be un-
fortunate, I believe it essential that there be one arm of the executive
branch that is the primary legal authority and which is responsible
for providing the entire administration, including the President, with
objective legal advice, I propose that the Office of Legal Counsel in the
Department of Justice be formally charged with the responsibility to
serve as legal counsel to the President.
I have come to believe, notwithstanding my earlier support for the
ratification of the 22d amendment, that we made a mistake in limiting
a President to two terms and that the 22d amendment should be re-
pealed. I believe that the discipline of standing for reelection, or at
least contemplating the possibility of standing for reelection, is a desir-
able one and that the nature of the Presidency is materially altered
by the constitutional limitation of two terms. I think the incumbency
factor which is much vaunted and highly prized by political observers
is overstated in the first instance, but that it would be diminished
by the repeal of the 22d amendment. After all, incumbency is less
regal if one must at least consider the possibility of standing for re-
election 4 years hence. In short, the atmosphere engendered by the
removal of political pressures from a President who has been reelected
to his second term presents, in my opinion, far greater potential for
abuse of power than a situation in which an incumbent President
always is presented with the opportunity to seek reelection.
As for most public issues, we have spawned our share of cliches and
one of the favorites describes the Chief Magistrate as an “Imperial
President” — implying isolation, arrogance, and nonresponsiveness.
While I may not subscribe to all the elements of that characterization,
1 do feel that separation of powers has become more than a constitu-
tional doctrine, it has become a geographic fact. Although the nature
of the Presidency certainly is influenced by the individual occupant,
interaction between the executive and the legislative departments and
with the public is not only desirable but essential. I have often pro-
1114
posed that the President should maintain an office in the Capitol and
that the President, or at least some of his principal staff should occupy
that office from time to time and be available to legislators on matters
of mutual interest.
Certainly the single most notable evidentiary achievement of the
Select Committee was the revelation by Alexander Butterfield of the
tape-recording system utilized in Presidential offices in both the White
House and the Executive Office Building. I am not sure I understand
why the tape recording facilities were installed, but I find the prac-
tice objectionable and not in keeping with the grandeur of the Presi-
dency. I rather suspect that recent experiences will mitigate against
that practice in the future. In any event, I believe that Congress
should consider carefully a prohibition of the electronic recording of
conversations occurring both in rooms and on telephones, except with
the express prior consent of all the participants to the conversation, or
unless carefully supervised by a court of competent jurisdiction for
specified statutory purposes.
VI. Increased national party committee role in Federal elections.
Finally, I believe Watergate might never have occurred had there
been more politics instead of less in the White House. Politics is an
honorable profession. It is probably a free citizen’s highest secular
calling. The Republic could not function without the dedication of mil-
lions of citizen politicians; and, consequently, I hope that politics as
an honorable undertaking is not a casualty of Watergate. I urge that
our young people, who are easily the best educated, most aware, and the
most participatory of any generation, involve themselves in the politics
of the Nation.
The two-party system must flourish as a system of two broad based
national parties, each able to accommodate the wide variety of view-
points and ideas and to synthesize the majority view on any given elec-
tion day. I think Presidential and Vice Presidential campaigns in
particniar ought to be the responsibility of the national party struc-
ture and not temporary, collateral organizations such as the 'Commit-
tee To Re-Elect the President. I take great pride in noting after these
extended hearings that neither the Republican National Committee
nor the Democratic National Committee were involved in campaign
illegalities in any way, nor were their chairmen or principal officers.
Both our parties are great parties, and they are essential to the func-
tioning of the country.
1115
APPENDIX TO VIEWS OF SENATOR BAKER*
SUMMARY OF HIGHLIGHTS OF INVESTIGATION OF CIA ACTIVITY
IN WATERGATE INCIDENT
INTRODUCTION
This report is submitted at Senator Baker's request
to summarize the highlights of an investigation of CIA activity,
if any, in connection with the Watergate incident and aftermath.
It is based on material in the possession of the Committee, both
classified and unclassified. It does not attempt to deal with all
the matters deemed pertinent and important to a full and complete
inquiry, but is designed to generally describe the areas of
interest and concern pursued during the staff investigation and
executive session interviews since the conclusion of the Committee's
public hearings.
In view of the fact that the Committee has chosen to have
no further public hearings; that the Committee staff is in the
process of being reduced in; size; that further cooperation by the
Agency seems more likely on the request of the standing juris-
dictional committees rather than on the request of the Watergate
Committee, and that the total burden of additional work to complete
the investigation thoroughly^ is probalHyrbey.Qnditfie competence of
the remaining staff in terms of numbers and time. Senator Baker
requested that this memorandum be prepared for submission to
the full Committee for further disposition as the Committee may
determine. It is pointed out that, while the report itself is not
classified, it makes reference to, and in some instances quotes
from, material which is classified. Therefore, each copy of
this report has been treated for security purposes as if it were
classified. They are numbered and accounted for as in the case
of classified material.
The report is broken down into Severn categories, tabbed
as follows:
(1) Background
A recitation of the first references to CIA
connections on the part of the Watergate burglars,
reference to the possibility of CIA involvement by
the President in his speech of May 22, 1973, and
certain other published information and corres-
pondence.
*Refereneed at page 1107.
1116
(2) Mullen
The fact that the Mullen Company and its
president. Bob Bennett, had an established
relationship with the CIA is described in some
detail in this section of the report. Most of the
information contained in this section was discovered
after Volume IV was requested by Senator Baker.
The CIA arranged to release this volume and subse-
quent documents to the Watergate Committee in
the custody of George Murphy serving as security
officer for the Committee through an arrangement
with the Joint Committee on Atomic Energy.
(3) : Pennington
This section derives from a CIA supplied
memorandum dateddTehruary 22, 1974, from the
then Director of Security, detailing the information
that Bee R. Pennington, a CIA. operative, had
entered James McCord’s house and/or- offic e shortly
af te r the Watergate b r eakih fbr-the purpose- of
destroying evidence- of- a CIA- connection with McCord.
(4) Tapes
This section derives from information, supplied
to Senator Baker by Director Colby that there was a
central taping capability at the Cite that the tapes
had been destroyed, and the: possibility that some of
the: tapes may, have been, Watergate - , related. , Director,
Colby, stated.thatihe did notcknow- whether Watergate
related tapes had'been destroyed.
(5) TSD
The initials stand for Technical Services Division
of the Central Intelligence Agency, and the section
deals with rather extensive contacts between Hunt
and the Agency and the support supplied by the Agency
to Hunt and Liddy, which was used in a wide variety
of undertakings. A number of factual discrepancies
appear in this section which cannot be effectively
reconciled on the basis of the information we now
possess— suchas Hunt's receipt of certain Agency
technical assistance and contemporaneous participation
in the preparation of the Ellsberg psychiatric profile.
1117
(6) Martinez
This tab refers to Eugenio Martinez, one of
the Watergate burglars. The section delineates
the Martinez-Agency relationship. Hunt's early
activities in Miami, the actions taken or not taken
by the Agency's office in Miami, and certain
unresolved questions.
(7) Recommendations
The seventh tab is self-explanatory and
constitutes the recommendations of the staff for
further inquiry.
1118
BACKGROUND
In a speech on May 22, 1973, President Nixon stated in part the
following in connection with the Watergate matter:
Within a few days, however, I was advised
that there was a possibility of CIA involvement in
some way.
It did seem to me possible that, because of the
involvement of former CIA pe rsonnel, and because of
some of their apparent associations^ the investigation
could lead to the uncovering of covert CIA operations
totally unrelated to the Watergate break-in.
In addition, by this time, the name of Mr.
Hunt had surfaced in connection with Watergate, and
I was alerted to the fact that he had previously been a
member -x>£ the 'special -i n v es tigations onitTn'-the White
House. Therefore, I was alse concerned that the
Watergate investigation might well lead to an inquiry
into the activities of the special investigations unit
itself.
* # * #
I also had to be deeply concerned with insuring
that neither the covert operations of the CIA nor the
operations of the special investigations unit' shbuld be
compromised. Therefore, I instructed Mr. Haldeman
and Mr. Ehrlichman to insure that the investigation of
the break-in not expose either an unrelated covert
operation of the CIA or the activities of the White
House investigations unit--and to see that this was
personally coordinated between General Walters, the
Deputy Director of the CIA, and Mr. Gray at the FBI.
1119
One of the matters to which the President was evidently referring was
explored by Senator Baker in his questioning of John Ehrlichman when
Ehrlichman appeared before the Select Committee on July 26, 1973.
Ehrlichman was questioned with regard to missing paragraph five of
a memo from Egil Krogh and David Young to- John Ehrlichman dated
August 11, 1971. 1
This was the same matter which had been brought to the attention of
the Minority staff in July of 1973 which resulted in a briefing of
Senator Ervin, Senator Baker, Sam Dash, and Fred Thompson by
White House Counsels Fred Buzhardt and Leonard Garment. The ‘
subject of that briefing is what is now referred to as the "Admiral
Moorer-Yeoman Radford Incident. "
With regard to involvement of the CIA in the Watergate affair, it should
be noted that since June 17, 1972, there have been numerous newspaper
articles pointing out the fact that many of those involved in the Water-
gate break-in we re former CIA employees; that CIA equipment was
used by Hunt, and other possible CIA links to Watergate.
In the September 14, 1973, issue -of the National Review . Miles Copeland
wrote an article entitled ".The Unmentionable Uses of a CIA"^, suggest-
ing that McCord led the Watergate burglars into a trap.
In the November, 1973, issue of Harper's Magazine, an article entitled
"The Cold War Comes Home" 3 , by Andrew St. George, indicated
strongly that former CIA Director Helms had prior knowledge of the
Watergate break-in. As a result of the St. George allegation, Senator
Baker asked Senator Symington and the Senate Armed Services Com-
mittee to conduct the inquiry into those allegations. The Senate
Armed Services Committee held hearings oh this matter and heard
testimony from CIA officials that the -Agency was not knowledgeable
of the Watergate break-in before it occurred; had not led the burglars
into a trap; and, that the magazine allegations had no basis in fact.
It would appear that no information relative to this Committee's
mandate was developed from the testimony adduced during the -hearings
before the Senate Armed Services Committee on the St. George matter.
* See Public Testimony of John Ehrlichman dated July 26,
1973, at 2702-2704.
2
National Review , September 14, 1973, "The Unmentionable
Uses of a CIA, " at 996.
■3
Harper's Magazine, November,
Home, " at 82.
1973, "The Cold War Comes
1120
However, in the aftermath of the St. George inquiry, Senator Baker
propounded a number of questions to the CIA on November 8, 1973,
one of which follows :
7. QUESTION: On or after June 17, 1972, did any
of the individuals associated with these break-ins in any
way communicate with any individual associated with CIA
to discuss the Watergate break-ins or the Ellsberg psy-
chiatrist office break-in, other than Mr. McCord who
wrote letters to CIA which are part of the Watergate hearing
record?
ANSWER: On 10 July 1972 an officer of a commer-
cial concern communicated to an employee of CIA information
which had come to his attention concerning the "Watergate
Five. " The relationship of this informant and his company
to the Agency was and is classified. Since this information
was hearsay, contained a repetition of then current published
speculation, and indicated that the informant had appeared
before the Grand Jury on the miatter, no action was taken.
The employee's hand-written memorandum fox-the record
on this matter is contained in -sensitive material which Agency
officers have made available for review, but not retention,
by the staffs of the four CIA Subcommittees as well as the
staffs of the Senate Select Committee on Presidential Campaign
Activities and the Federal Prosecutor. Aside from this, the
Agency had no communication of the type referred to in this
question.
An examination of the aforementioned "sensitive material"^ revealed
more than was theretofore known aboat the scope of the CLA's dealings
with Robert Bennett and Mullen and Company and led to a further
intensification of the staff's investigative efforts in other CIA-related
areas.
This material was produced as a part of Volume IV of
the documents furnished to us by the CIA.
1121
ROBERT BENNETT AND THE MULLEN AND COMPANY
The Mullen and Company has maintained a relationship with the
Central Intelligence Agency since its incorporation in 1959.* It
provided cover for an agent in Europe qpd an agent in the Far East
at the time of the Watergate break-in.
Hunt left the CIA in 1970 and joined Mullen and Company with what
founder Robert Mullen understood to be Director Helms' blessing.
Hunt's covert security clearance was extended by the CIA^; he was
witting of the Mullen cover^j and ( on occasion he undertook nego-
tiations with the Agency with respect to that cover— even after _
becoming employed at the White House (according to Agency records).
1 Executive Session Testimony of Robert R. Mullen,
February 5, 1974, at 3.
^Executive Session Testimony of Robert F. Bennett, February 1,
1974, at -25-26; Executive Session Testimony of (Mullen and Company
Case Officer^, February 4, 1974, at 5.
3
CIA Memorandum, undated. Subject: Wrap-Up of Agency's
Association with Robert R. Mullen and Company, found at Tab 3 of
CIA Supplemental Material, Volume III, at 3; Executive Session Testi-
mony of Robert R. Mullen, supra note 1, at 8; Executive Session Testi-
mony of Robert F. Bennett,- supra note 2, at 67.
^See Memorandum for Deputy Director for Plans, October 14,
1970; Subject: E. Howard Hunt — Utilization by Central Cover- Staff,
found at Tab 16, CIA Supplemental Materials, Volume H.
^Id. ; Executive Session Testimony of Robert R. Mullen, supra
note 1, at 9.
^Executive Session Testimony of [Former Deputy Director of
Plans, hereinafter DD^ , February 5, 1974, at 6-10; CIA Memorandum,
undated. Subject: Wrap-Up of Agency's Association with Robert R.
Mullen and Company, supra note 3, at 2.
1122
Robert Bennett, who is Senator Bennett's son, joined Mullen and
Company and became its President in 1971. He w^s introduced to
the Mullen CIA case officer in April of that year. Bennett brought
the Hughes Tool account with him to Mullen. ® CIA records indicate
that Agency consideration was given to utilizing Mullen's Hughes
relationship for a matter relating to a cover arrangement in [South
America J. , and to garner information on Robert Maheu. 9
Bennett's accessibility to the CIA has raised questions concerning
possible Agency involvement in, or knowledge of, Bennett's acti-
vities in regard to Hunt/Liddy, to wit: Bennett suggested and
coordinated the DeMott interview regarding Chappaquidick; 0 Bennett
coordinated the release of Dita Beard's statement from Denver, afteij^
contacting Beard's attorneys at the suggestion of a Hughes executive;
Bennett suggested that Greenspun's safe contained information of
interest to both Hughes and the CRP; 12 Bennett asked for and received
-ExecutiveSeBsion Test imony o f[Mullen-and-Campany Case
Officer^, supra n ote 2, at 12.
^Executive^Session-Testim ony. nFRbbert -B ennett, supra
note 2, at 132 .
?See ^Mullen and Company Case Office^ Memorandum for
Record, April 30, 1971, Subject: Association of Robert R. Mullen and
Gnmparvy with the Hughes- Tool ^Company. - JMs-do cnm en t-is found at
Tab lb. Supplemental CIA Material, Volume IL
^-ExecutiveSesaionJTestimony of E. Howard Hunt, December 18,
1 973, . at 69-70; .Executive .SessionlIiestimonyTQf.Robert TVB ennett,
supra note 2 , at 6Z-.65.
^ * Executive Session Testimony of Robert F. Bennett, supra
note 2, at 93-94.
A^Executive^easioiL Testimony of _E,. Howard Hunt, supra note IQ,
at 6- 8;~But see Executive Session Testimony of Robert F. Bennett,-- supra
note 2, at 79-84. Bennett indicates that Hunt suggested Bennett coordi-
nation with Hughes.
I
1123
from Hunt a price estimate for bugging Clifford Irving for Hughes;^
Bennett coordinated the employment of political spy Tom Gregory
by Hunt and discussed with Gregory the latter's refusal to proceed
with bugging"plans on or about June 16, 1972 . ^ Bennett received a
scrambler from Hughes personnel for use on Mullen telephones;
Bennett and Liddy set up dummy committees as a conduit for Hughes
campaign contributions;^ and Bennett served as the point of contact
between Hunt and Liddy during the two weeks following the Watergate
break-in. * / Furthermore, Robert Oliver, Mullen's Washington
lobbyist for Hughes Tool, is the father of R. Spencer Oliver, Jr.,
whose telephone was tapped at the Democratic National Committee.
Bennett met with the Olivers after the break-in to discuss the bugging.
The true nature of Bennett's relationship to the CIA was not known to
us until late November of 1973 when, at Senator Baker's request,
the CIA produced another volume of CIA documents (Volume. IV). The
following information was adduced from this volume.
^Executive Session Testimony -of E. Howard Hunt, supra note
10, at 72-73; Executive Session Testimony of Robert F. Bennett, supra
note 2, at 121-124.
l^staff Interview of Thomas J. Gregory, September 1, 1973,
at 5; Executive Session Testimony of E. Howard Hunt, supra note 10,
at 17; Executive Session Testimony of Robert F. Bennett, supra note 2,
at 69-75.
^Staff Interview of Linda Jones, September 6, 1973, at 3;
Executive -Session Testimony of Robert F. Bennett, supra note, 2 at 140.
*^Staff Interview of Linda Jones, supra note 15, at 9; See
Summarized Highlights of Linda Jones Interview, dated September 10,
1973.
1 7
Staff Interview of Linda Jones, supra note 15, at 8; Executive
Session Testimony of Robert F. -Bennett, supra note 2, -at 153-157.
io
Executive Session Testimony of Robert F. Bennett, supra
note 2, at 100-101.
1124
On July 10, 1972, Bennett reported detailed knowledge of the
Watergate incident to his CIA case officer. The case officer's
report of this meeting was handwritten^ and carried to Director
Helms on or before July 14, 1972, in this form because of the
sensitivity of the information.^® It revealed that Bennett had
established a "back door entry" to E. B. Williams, the attorney
for the DNC, in order to "kill off" revelations of the Agency's
relationship with the Mullen and Company in the course of the
DNC lawsuit. He agreed to check with the CIA prior to contacting
Williams. Our staff has confirmed that Bennett did funnel
information to Williams via attorney Hobart Taylor and that this'
information was more extensive than the information Bennett had
previously provided the Grand Jury. ^ The CIA has acknowledged
paying one-half of Bennett's attorney fee for his Grand Jury
appearance .
Although Bennett was supplying information to the CIA about many
aspects of the Watergate incident and was at that time nerving as
liaison between Hunt and Liddy, there is no indication that these
facts were disclosed to the FBI.
(Mullen and Company Case OfficerJ Memorandum for Record,
July 10, 1972, Subject: Meeting with Robert Foster Bennett and his com-
ments concerning E. Howard Hunt, Douglas Caddy, and the "Watergate
Five" Incident {sic), found-in CIA Supplemental Material, Volume IV.
^Executive Session Testimony of [Mullen and Company Case
OfficerJ , supra note 2, at 20-21, 28-29.
” * [Mullen and Company Case Office r] MemorandumfoivRe cord,
supra note 19, at 11-12.
22
Robert F. Bennett, Memorandum for Record, dated
January 18, 1973, at 17; Executive Session Testimony of Robert F.
Bennett, supra note 2, at 129. See also Hobart Taylor Interview
Report, dated February 11, 1974.
23
CIA Memorandum, undated. Subject: Wrap-Up of Agency's
Association with Robert R. Mullen and Company, supra note 3, at 5.
1125
The aforementioned July 10 report contains mysterious reference
to a "WH flap" 2 ^. .The report states that if the Mullen covg£ is
terminated, the Watergate could not be used as an excuse. It
suggests that the Agency might have to level with Mullen about the
"WH flap. "26 Nonetheless, a July 24, 1972 contact report shows
that the CIA convinced Robert Mullen of the need to withdraw its
Far East cover through an "agreed upon scenario" which included
a' falsified Watergate publicity crisis. 27 The Agency advises that
the "WH flap" has reference to a [deletion at Agency request) that
threatened to comDromise Western Hemisphere operations, 28 but has
not explained sufficient reason to withhold such information from Mullen
nor explained the significance of same to Watergate developments.
This Agency explanation is clouded by conflicting evidence. The
Assistant Deputy Director of Plans has testified that he is very
familiar with the matter and that it had no unique effect on Mullen's
cover. 29 The Mullen case officer testified that the flap concerned
24 [Mullen and Company Case Officer] Memorandum for
Record, supra note 19, at 13-14.
25 Ifl. at 12-13.
26 Id- at 13.
27 [jMullen and Company Case Officer] Memorandum for
Record, July 24, 1972, Subject: Withdrawal [Far Easi^ Cover,
found in CIA Supplemental Material, Volume V, at -1-2,.
^Executive. Session' Testimony of [DDp],supra note 6,
at 39: Executive Session Testimony of [Mullen and Company Case
Officer), supra note 2, at 43.
29 r
Executive Session Testimony of [Former Assistant
Deputy- Director of Plans] , February 28, 1974, transcript not
presently available.
1126
30
cover. Bennett, who thought the reference concerned a "White
House flap, " did advise of information received from the European
cover that a CcompromiseJ adversely affected a former Mullen cover
{deleted at Agency requestj.
A memorandum drafted by the Chief of the Central Cover Staff,
CIA, on March 1, 1973, notes that Bennett felt he c,quld handle the
Ervin Committee if the Agency could handle Hunt . Bennett even
stated that he had a friend who had intervened with Ervin on the
matter. 33 The same memorandum suggests that Bennett took relish
in implicating Colson in Hunt's activities in the press while protecting
the Agency at the same time. 34 It is further noted that Bennett was
feeding stories to Bob Woodward who was "suitably grateful"; that
he was making no attribution to Bennett; and that he was protecting
Bennett and Mullen and Company. 35
3®Executive Session Testimony of {Mullen and Company
Case Officer^, supra note 2, at 43. '
31
Executive Session Testimony of Robert F. Bennett,
supra note 2, at 17-24.
3 2 f ^Memorandum for Deputy Director for Plans,
March 1, 1973, Subject: Current Time Magazine Investigation
of Robert R. Mullen & Company Connection with the Watergate
Incident, found in CIA Supplemental Material, Volume IV, at 4.
33 Id.
34
Id.
35 .
Id.
1127
PENNINGTON MATTER
The results of our investigation clearly show that the CIA had in its
possession, as early as June of 1972, information that one of their
paid operatives, Lee R. Pennington, Jr. , had entered the James
McCord residence shortly after the Watergate break-in and destroyed
documents which might show a lin k between McCord and the CIA.
This information was not made available to this Committee or anyone
else outside the CIA until February 22, 1974, when a memorandum by
the then Director of Security was furnished to this Committee.'
The evidence further shows that in August of 1972, when the FBI made
inquiry about a "Pennington, " the Agency response was to furnish
information about a former employee, [with a similar name!, who
was obviously not the man the FBI was interested in. and to withhold t he
name of Lee R. Pennington, Jr . e -
The Pennington information was known within the CIA at least at a
level as high as the Director of Security,' according to the [former
Chief of the Security Research Staff, hereinafter referred to as Chief,
Security Research Staff^, by whoin Pennington was retained at $250
per month until December of 1973. 3 In January of this year, [Director
of Security ordered that the Pennington materials be removed from
the CIA Watergate files when those files were about to be reviewed by
the CIA's Inspector General's office in connection; with the CIA furnishing
this and other Congressional committees certain information on the
*See "Memorandum for Directoi'-of- Intelligence, " February 22,
1974, Exhibit 1 to the Executive Session Testimony of Lee R. Pennington,
February 23, 1974.
^Executive Session Testimony of [Personnel Security Officer #l"T)
February 25, 1974 at 11-14, 15, 17-18; Executive Session Testimony of
[Assistant Deputy Director of Personnel Security^* March 2, 1974
(transcription not presently available. )
^Executive Session Testimony of [Chief, Security Research Staff 77 >
February 24, 1974, at 25-26; Executive Session Testimony of Lee R.
Pennington, supra note 1, at 29. (Note: The Chief, Security Research
Staff, was the recipient of certain of the McCord letters.)
1128
taping capacity at the CIA'! Our information is that, since the
revelation of the Pennington matter in February of this year, [Director
of Security's^ early retirement has been "accepted."®
It seems that the Pennington matter was extremely sensitive not only
because of the above-mentioned facts, but because Pennington may
have been a "domestic agent, " possibly in violation of the CIA 's
charter. ® The Agency has advised that the Security Research Staff
was abolished in August of 1973. 1
All of the above information was produced by the CIA only as a result
of the position taken by a staff employee of the Personnel Security
Division, [Personnel Security Officer #l[] , Because of the Senator's
and the staff's request for documentation and information relating to
the destruction of CIA tapes and other matters. Deputy Legislative
Counsel prepared a statement for Director Colby's signature on
February 19, 1974. In it was the blanket assertion that the CIA had
produced all Watergate- related^information for this Committee as
^Executive Session Testimony of [personnel Security Office r # 3~] ,
supra note^at 46-49, 50-51, 52-54, 57-59, 69-72.
^The CIA, through its legislative liaison, has informed this
Committee that [Director of Security "retired" on or about February 26,
1974, Shortly after his Executive Session Testimony before this
Committee on February 25, 1974.
®See Executive Session Testimony of [Chief, Security Research
StaffJ, supra note 3, at 25-26, 30; Executive Session Testimony of Lee R.
Pennington, supra note 1, at 4-7, 10, 29. In this regard. Volume VIII
CIA Supplemental Materials references an apparent CIA file on a United
States citizen. Jack Anderson (#349691). This reference is contained in
CIA memoranda in November and December of 1972 which discuss
Pennington's providing his CIA case officer with a memorandum allegedly
written by McCord about Jack Anderson and others. It should be noted
that the CIA file on Mr. Pennington was not provided to this Committee
and also apparently has portions "missing" from it, see Action Required
section of this memorandum, infra, at Miscellaneous, No. 9.
^Executive Session Testimony of [^Director of Security^],
February 25, 1974, at 17-18.
1129
well as its Congressional oversight committees. Because he was
aware of many of the above facts, ^Personnel Security Officer #lj
made it clear that he could not and would not subscribe to such a
statement. ^ CPersonnel Security Officer #l] was so concerned that
the documentary evidence of the Pennington information would be
destroyed by others in the CIA that he and a co-employee copied the
relevant memoranda and placed them in their respective personal
safes . ^ This matter was subsequently brought to the Inspector
General's attention and the ^Director of Security' s3 memorandum
of February 22 was drafted and made available to this CommitJ^e,
the oversight committees, and the Special Prosector's office.
4
Our investigation in this area also produced the fact that, contrary
to previous CIA assertions, the CIA conducted a vigorous in-house
investigation of the Watergate matter, starting almost immediately
after the break-in. ^ As one member of the Security Research Staff
O
“Supplemental CIA. Materials, Volume VIII; see also Executive
Session Testimony of [personnel Security Officer # lj , supra note 2,
at 61-63.
^Executive Session Testimony of (^Personnel. Security Officer # lj ,
supra note 2. at 45-52. In his Executive Session Testimony, [personnel
Security Officer # lj states that, at a meeting on January 22, 1974, to
discuss whether the "Pennington matter" should be withheld from or
disclosed to the appropriate authorities and Congressional committees,
he informed his supervisory CIA personnel that (tr. 52):
"Up to this time we have never removed, tampered with,
obliterated, destroyed, or done anything to any Watergate
documents, and we can't- be caught in that- Kind' of '"bind new.
We. will not.do it. " personnel Security Officer #l] added
that he "didn't cross the Potomac on (his) way to work in the
morning, and that the Agency could do without its own L,.
Patrick Gray" (tr. 53). Subsequently, Qpersonnel Security
Officer # lj prevailed and the information was made available
to this and other appropriate Congressional Committees.
^Executive Session Testimony of ^Personnel Security Officer
#1], supra note 2, at 49, 45-52.
USee "Memorandum for Director of Central Intelligence, "
supra , note 1.
^Executive Session Testimony of ^Personnel Security Officer
#1^, supra note 2, at 1-4; Executive Session Testimony of [^Security
Research Staff Officer] , February 25, 1974, at 5, 31-32, 42, 49.
1130
13
stated they were in a state of "panic . " In November and
December of 1972, (Executive Officer to Director of Security]
was specially assigned to then Executive Director/Comptroller
Colby to conduct a very secretive investigation of several Water-
gate-related matters. [Executive Officer to Director of Security "]
was instructed to keep no copies of his findings and to make no
records. He did his own typing and utilized no secretaries .
Less clear than the aforementioned efforts to suppress
the Pennington information, is an understanding of Pennington's
actual role or non-role in the destruction of documents at the
McCord home shortly after the Watergate break-in. Pennington
has testified that he did not go to the McCord home for the purpose
of searching for or destroying CIA-related documents, but does
acknowledge witnessing the destruction of documents by Mrs, ^
McCord and others. ^ ® It is clear from the testimony of others
that the GIA- received information, evidentlyfrom Pennington,
indicating more active participation by operative Pennington.
^Executive Session Testimony of [Security Research
Staff Officer], supra note 12, at 5.
^Executive Session Testimony of [Executive Officer to
Director of Security], March 3, 1974 (transcription not presently
available).
^Executive Session Testimony. ofJiee-R. Pennington,.
supra note 1.
^Executive Session Testimony of [security Research Staff
Officer], supra note 12;
Executive Session Testimony of [personnel Security
Officer #j], supra note 2.
Executive Session Testimony of [chief. Security Research
Staff], supra note 3.
1131
TAPES
In a meeting in Senator Baker's office with Director Colby and George
Murphy, following a discussion of the Cushman tape, Murphy asked
Colby if there were other tapes, and he replied in the affirmative. In
response to a question from Senator Baker, Colby further acknowledged
the prior existence of a central taping capability at the CIA. Senator
Baker then requested that relevant tapes be reviewed and delivered to
the Committee, to which Colby agreed. Shortly thereafter, Colby con-
firmed to Senator Baker recent press accounts that the tapes had been
destroyed. In that same connection it should be pointed out that the staff
had previously interviewed Victor Marchetti, who stated upon questioning
that he suspected that there was a central taping system at the CIA. When
the staff broached this subject with the Agency's jjleputy Legislative
Counsel]) he stated that if there had been such a system;, it was no longer
in existence.
Shortly before Director Helms left office, and approximately one week
after Senator Mansfield's letter requesting that evidentiary materials
be retained, 1 Helms ordered that the tapes be destroyed. Although the
CIA is apparently unable to state with any degree of precision the date
on which the tapes were actually destroyed, testimony indicates that
it was during the week of January 22, 1973. ^ While the CIA claims that
the destruction was not unusual and was one of several periodic
destructions, two facts seem clear. First, the only other destruction
for which the CIA has any record was on January 21, 1972, when tapes
* Letter from Senator Mansfield to DCI Helms, dated January 16,
1973.
^Executive Session Testimony of ^Director Helms' Secretary] ,
February 6, 1974, at 14. See also CIA memorandum for Director of
Security, dated January 31, 1974, at 3. She states that she told the
technicians to destroy only Helms' tapes and not all of the tapes (Execu-
tive Session Testimony at 34-35). However, there seems to have been
no doubt in the minds of the technicians that they were to destroy all of
the tapes on hand. Executive Session Testimony of [^Office of Security
Technician #Q , February 6, 1974, at 23. Executive Session Testimony
of ^Office of Security Technician #2], February 6, 1974, at 53.
3 Executive Session Testimony of (Office of Sgcurity Technician
#2]), supra note 2, at 36. See also CIA memorandum for Director of
Security, supra note 2.
1132
for 1964 and 1965 were destroyed (there are no records of periodic
destructions)^; and secondly, never before had there been a destruction
of all existing tapes. ® It should be noted that there exists a separate
taping system for the Office of Security. 6 That system is still operative,
and the O/S tapes presumably are still in existence. The Agency has
advised that it has reviewed all Office of Security tapes, watch office
tapes, and duty office tapes to determine the relevancy of same but has
not provided these tapes to the Select Committee, despite the Committee's
request. The Agency has provided the Committee with two selected tran-
scripts which purport to constitute, in the opinion of the Agency, the only
Watergate related material contained on any tapes.
The January, . 1973, destruction pertained only to recordings of room
conversations. However, on Helms' instruction, his secretary destroyed
his transcriptions of both telephone and room conversations. The evidence
indicates that among those telephone transcriptions were conversations
with the President, Haldeman, Ehrlichman, and other White House
officials .** Helms and [Director Helms' Secretary! have testified that such
conversations were non- Watergate related..^ Unfortunately, any means of
corroboration is no longer available; We have examined - summaries* of
logs made available by the CIA, but it is impossible to determine who
was taped in many of the room conversations.. In this regard, even the
CIA’s analysis does not pr ovide this vital information. There are several
references to a "Mr. X. " The CIA has not produced the a c t u al logs for
our examination. However, we were informed that there are "gaps" in
the logs.
The circumstances surrounding the transcriptions of room and telephone
conversations of former Deputy Director Cushman are bizarre to
say the least. When Cushman testified before the Watergate Committee
on August 2, 1973, he presented a transcription of the
^Executive Session Testimony of (Office of Security Technician #lj ,
supra note 2 at 10. Executive Session Testimony ofjjbffice of Security
Technician #2^, supra note 2 at 36-37.
^Executive Session Testimony of (office of. Security Technician #2^ ,
supra note 2 at 20.
^CIA memorandum for Director of Security, supra note 2 at 4.
^Executive Session Testimony of [Director Helmtf SecretaryJ,
supTa note 2 at 14, 17, 19. Executive Session Testimony of Riehard Helms,
March 8, 1974 (transcription not yet available).
^Executive Session Testimony of (Director Helens' Secretar^,
— - Pra n ‘Executive Session Testimony of Helms , supra note 7; Executive
Session Testimony of [Director Helms' ’Secretary^ supra note 2 at 23.
1133
Cushman/Hunt conversation of July 22, 1971. We recently
discovered that there exists an original, more complete transcrip-
tion; that the original transcription contained an insignificant but
uncomplimentary reference to the President; and, that the original
was available to the CIA at the time of the Committee's hearings
in August of 1973. In fact, the original transcript was not produced
until February of this year, the day before Senator Baker was to
listen to the Cushman/Hunt tape, per his request .
The Cushman/Hunt conversation and one other were the only two
room transcriptions saved by Cushman's secretary, ^presently
Director Colby's Secretary, hereinafter referred to as Cushman/
Colby's Secretary^ and his assistant ^Executive Assistant to Deputy -
Director of CIA, hereinafter referred to as Exec. Asst, to DDCl],
when Cushman's safe was cleaned out in December of 1971. ^ They
claimed that they made a search for the original transcription shortly
after the Watergate break-in but that it was not found, and therefore
an abbreviated transcription was typed. ^ Therefore, we have a
search by £ Exec. Asst, to DDClJ shortly after the Watergate break-
in in June of 1972 and another search imMay of 1973, the original
transcript not having been found until May of 1973.
In February of this year ^Deputy Legislative Counsel] hand-delivered-
to Senator Baker a very significant document. It was the transcription
of a portion of the Ehrlichman/Cushman telephone conversation.
(.Deputy Legislative Counsel] stated it had been recently discovered
by^Exec. Asst, to DDClJ. It was discovered during LExec, Asst.
to DDGI's] third search for Watergate-related materials, and it was
located in the same file as the-Ciishman/Hunt transcript.
10
Public Testimony of General Robert E. Cushman at 3291.
11
Executive Session Testimony of [jbushman/ Colby Secretary],
February 21, 1974.
*^Id. at 64; see also memorandum of [Exec. Asst, to DDCl],
July 23, 1973, Supplemental CIA Materials, Volume IV.
13
See Ehrlichman/Cushman tape transcription, CIA memorandum
"For All Employees" dated January 31, 1974, at Tab B.
14 Affidavit ofjExec. Asst, to DDCtl, February 5, 1974, and
Executive Session Testimony of [jExec. Asst, to DDCIJ, March 6,
1974 (transcription not yet available).
1134
The document is especially significant in that it quotes Ehrlichman
as saying that Hunt was working for the President and that the CIA 1-
was to give Hunt "carte blanche." This, of course, substantiates the
CIA's claim that Ehrlichman made the original call with regard to
the CIA's assistance to Hunt. Surprisingly, we learned that [Cushman /
Colby Secretary^ , although she says she was told that Mr. Cushman
did not have his calls monitored, did, in fact, monitor certain of his
calls anyway, especially with people at the White House, without
Cushman's knowledge . The Cushman/Ehrlichman transcript was
a result of the shorthand notes she took of a monitored call. * " <
There are two interesting aspects to this transcription. First, only
the Ehrlichman por^ipn of the conversation was transcribed, contrary
to normal practice; and secondly, Cushman does not recall any 1
reference to the President or to "carte blanche."*®
* ^Executive Session Testimony.of j”Gushman/,Golby Secretary^, .
supra note IT at 12il3.
16
Id. at 17, 18.
17
Id. at 80-81.
18
Executive Session Testimony of General Robert E. Cushman,
March 7, 1974 (transcription not yet avai lable).
1135
HUNT--TSD SUPPORT--ELLSBERG PROFILE
The Committee has received much testimony over the past several
months detailing the extensive support of Howard Hunt by CIA personnel
with CIA materials and the CIA's role in the preparation of the
psychological profiles of Daniel Ellsberg. Howard Hunt was involved
in a wide variety of domestic undertakings with the use of CIA equip-
ment and the assistance of CIA personnel, e.g. , the burglaries of
Dr. Fielding's office and the DNC, the preparation of psychological
prefiles on Daniel Ellsberg and the investigation of the Chappaquidick
incident. In light of the facts and circumstances developed through the
documents and conflicting testimony of CIA personnel adduced by this
Committee, which are summarized below, the question arises as to
whether the CIA had advance knowledge of the Fielding break-in . The
Fielding burglary was not made public until May of 1973.
While the CIA has previously belatedly acknowledged some of the tech-
nical support it provided to Hunt and Liddy prior to the Fielding break-
in, the GIA has continually downplayed the extent of that technical
support as well as the specific approval and detailed knowledge of such
support by high level CIA officials. * The scenario of events culminating
in the Fielding break-in caused a wealth of conflicting testimony among
CIA officials as referred to hereinafter.
The CIA's assistance to Hunt began on July 22, 1971, when Hunt met
with General Cushman, then Deputy Director of the CIA, in Cushman's
office to request physical disguise and phony identification to effect a
"one time operation, in and out. ”2 This meeting was tape recorded by
Cushman. Thereafter, pursuant to the specific approval of both
^ See affidavits of Cushman, j^Exec. Asst, to DDClJ, and
[Deputy Chief, TSdJ , Original CIA Materials, Volume n, Tab D.
2
Partial tape transcript of July 22 meeting. Original CIA
Materials, Volume II, Tab K, at 1; see also Cushman's affidavit,
id. , and complete unabridged tape transcript of July 22 meeting,
CIA Supplemental Materials, Volume II, Tab 4.
1136
Cushman and then Director of the CIA Richard Helms, a member of
the CIA's Technical ServicesDivision was assigned to provide Hunt
with the assistance and materials he requested. ^ During the next
thirty days, the CIA technical staff met with Hunt on four separate
occasions. Most meetings were held at CIA "safe houses" (dwellings
owned or leased by the CIA for clandestine meetings).^ At those
meetings Hunt was provided with the CIA equipment and assistance
described in earlier Committee testimony, i.e., a wig, voice altera-
tion devices, heel lift to cause a limp, ® fake glasses, phony driver's
licenses and identification cards, a Uher 5000 tape recorder disguised
in a typewriter case, a camera hidden in a tobacco pouch, prelijminary
steps toward a phony New York telephone answering device, and the
developing of the film of Hunt and Liddy's reconnaissance trip to Los
Angeles to "case” Dr. Fielding's office.^ 1 This assistance was abruptly
terminated on August 27, 1971--one week before the Fielding burglary
of September 3, 1971. 7
Recent testimony and documents have-developed several matters of
cons ide rable impo rt with re gardto the a s si stance - provided Hunt and
Liddy. The technician who dealt with Hunt has testified that he received
approval for each and every request of Hunt from his supervisory
3 See Executive Session Testimony of General Robert E. Cushman,
March 7, 1974, at 10, 12; contra. Executive Session Testimony of
Richard Helms, March 8, 1974, and Testimony of Richard Helms
before the Senate Committee on Appropriations, May 16, 1973, at
195-196.
^ See Executive Session-Testimony of jjTSD Technician #lj ,
February 5 and 6, 1974, at 3-25 -(February 5 tr. ), and Exhibit 1 to
thatitestimony (notos-of jTSD“Technician compiled icontemporaneo-usly ,
with the support of Hunt) also found in CIA Supplemental Materials,
Volume VH, Tab 8.
5
Staff interview with Howard Hunt, February 4, 1974.
^Public Testimony of Richard Helms and General Robert E .
Cushman, August 2, 1973; affidavits of [tSD Technician #1, TSD
Technician #2, Deputy Chief, TSD, and Exec. AssttoDDClJ, Original
CIA Materials, Volume II, Tab D.
1137
o
officials at the CIA. He also testified that, contrary to earlier and
other CIA testimony, Hunt informed him early in August that he
would be introducing a second man (Liddy) to the technician for the
provision of disguise and false identification. 9 CIA officials hereto-
fore had. claimed that Hunt introduced Liddy unannounced late in
August and that this introduction had been one of the leading causes
for the CIA's ultimate termination of its support for Hunt. *0
Testimony and documents have also revealed, again contrary to the
testimony of high CIA officials, that Hunt's request for a New York
"backstopped" telephone (a telephone with a New York number which
would in reality be answered by a Washington CIA switchboard)
answering service was well on its way to completion. ^ A detailed
memorandum of the TSD technician, dated August 27, 1971, reveals ^
that the backstopped telephone request was about to be implemented.
This memorandum includes the actual relay number to be called.
Previous CIA testimony had- always been to the effect that this telephone
^Executive Session Testimony of [TSD Technician ,
supra note 4 at 10 (February 6 tr. ), at 57 (February 5 tr. ).
9
Id. at 55-57 (February 5 tr. ); see also notes referred to
in note 4, supra .
^Affidavits of {Exec. Asst. to DDcg (Deputy Chief, TSd},
Cushman, supra note 1; memoranda [of Exec. Asst, to DDClJ dated
^August 23, _26, and 30, Original CIA Materials, Volume H, Tab K;
compare Executive Session Testimony of (tSD Technician # lj, supra
note 4 at 55-56 (February 5 tr. ) with Executive Session Testimony
of [^Deputy Chief, TSDj , February 5, 1974, at 24.
^Executive Session Testimony of [TSD Technician #lj , supra
note 4 at 8-10, 12 (February 6), and Exhibit 1 to C tSD T e chnic ian #lj's
testimony at 5, which details the steps taken by the CIA to implement
Hunt's request.
1138
request was so unreasonable that it was immediately disapproved
and that it was also a leading cause of the ultimate termination of
Hunt's support. ^
Recent testimony also established that the CIA created a file on
Hunt's activities entitled the "Mr. Edward" file. This file was
maintained outside the normal CIA filing system, and this Com-
mittee's requests to obtain this file have not been granted, despite
the fact that testimony has established that this file was turned over
to Director Colby after the Watergate break-in. ^ Moreover, recent
testimony also indicates that a "bigot list" (CIA term for treatment
of especially sensitive case restricting access to a limited number
of persons) was created for Hunt's activities. 15
* 3 See affidavits of^Exec. Asst, to DDcJ, ^Deputy Chief,
TSD] , Cushman, and memoranda of ^Exec. Asst, to DDcFJ ,
supra note 10; Executive Session Testimony of Cushman, March 7,
1974, at 19-21. Moreover, Executive Session Testimony of Richard
Helms, supra note 3, indicates that it was Hunt's request for a
secretary which caused him to order the cut-off of support. This
request, however, occurred on August 18 and was denied the same
err next day, see Executive Session Testimo n y ofjExec. Asst, to DOCIj
March 6, 1974 (transcription not pre sently available)', contra,
testimony of Richard Helms before the Senate Committee on Appro-
priations, supra note 3, at 197.
^Executive Session Testimony of [Deputy Chief, TSd] ,
February 5, 1974, at 14-15; Executive Session Testimony of Tchief,
TSDj, February 5, 1974, at 29-30.
^Executive Session Testimony of £tSD Technician #lj, supra
note 4, at 2-4 (February 6 tr.)
1139
Testimony has indicated that the film developed for Hunt and Liddy
was, in fact, of Dr. Fielding's office. Not only was the film devel-
oped, however, but it was reviewed by CIA supervisory officials
before it was returned to Hunt. ^ One CIA official who reviewed the
film admitted that he found the photographs "intriguing" and recog-
nized them to be of "southern California. "18 He then ordered one of
the photographs to be blown up. The blow-up revealed Dr. Fielding's
name in the parking lot next to his office. ^ Another CIA official has
testified that he speculated that they were "casing" photographs.^®
Recent testimony has shown that the CIA official who reviewed these
photographs immediately reported their content to Cushman and his
assistant in the office of the De put y Director of the CIA. ^ 1 With* a
degree of incredulity, however, he denies telling his superiors that
he blew up one of the photographs and that it revealed the name of
Dr. Fielding. ^ Moreover, both Cushman and his assistant denied ever
Executive Session Testimony of Executive Officer to
Director of Security^], March 3, 1974 (transcription not presently
available); Staff interview of Howard Hunt, supra note 5 (wherein Hunt
indicates that the film the CIA developed included shots of a "close-
up of-(Fieiding's office) -door, a -close-up of the directory of {Fielding's)
building, photographs of the ingress and egress of the parking lot . . . "
as well as shots of the inside of Fielding's office, including the top
of Fielding's desk.
^Executive Session Testimony of ^TSD Technical #lj , supra
note 4 at 20-24, 52-53 (February 5 tr.); Executive Session Testimony
of {Deputy Chief, TSDj , supra note 14 at 43-47.
^Executive Session Testimony ofjpeputy Chief, TSD J , supra
note 14 at 44.
!9ld. at 45-46.
^Executive Session Testimony of Jchief, TSD^ , February 5,
1974, at 19-20.
^ ‘Executive Session Testimony of {Deputy Chief, TSdJ , supra
note 14 at 47-49.
1140
having been told about the content of the photographs by [Deputy
Chief, TSD] or anyone else.^ 3 In any event, recent testimony shows
that it was only after these photographs were developed and examined
that the CIA technician dealing with Hunt was ordered to cut off
all support for Hunt. This decision was made by the Deputy
Director of the CIA (Cushman) and/or the Director of the CIA
(Helms). 5
Finally, while previous public CIA testimony claimed that the CIA
"had no contact whatsoever with Mr. Hunt subsequent to 31 August,
1971, " recent testimony and secret documents indicate that Hunt
had extensive contact with the CIA after that date. Not only did Hunt
play a large role in the CIA's development of psychological profiles
on Daniel Ellsberg (not completed until November of 1971), but he
actually contacted the CIA's External Employment Assistance Branch
(EEAB) and approached active CIA personnel regarding several
23
Executive Session Testimony of General Robert E. Cushman,
March 7, 1974, at 22-23; Executive Session Testimony of {.Exec. Asst,
to DDClJ , March 6, 1974 (transcription not presently available).
‘^Executive-Session-Testimonyiof {TSD'Technicial-# 1 sapra ^
note 4, 1 -at 59- 60;' and Exhibit 1 to that -testimony.
25
Executive Session Testimony of General Robert E. Cushman,
March 7, 1974, at 21-22, 16-20; Executive Session Testimony of
Richard Helms, March 8, 1974, contra (transcription not presently
available).
26
Lieutenant General Vernon A. Walters Memorandum for
Record, July 28, 1972, Original CIA Materials, Volume I, Tab S.
1141
operations, including, e.g. , Hunt's requests to the CIA for person(s)
skilled in lockpicking, electronic sweeping, and entry operations. ^7
It.is significant that during the same time period as the ongoing- sup-
port of Hunt by the CIA, August of 1971, the CIA was also compiling
a psychological profile on Daniel Ellsberg. Recent testimony has
revealed that. Hunt was deeply involved in that project as well.
27
Contacts after August 31, 1971, indicated in the Secret
Supplemental CIA Materials, include the following:
*
a. Hunt was referred tof Former CIA employe^ byjchief, EEAbJ
of the CIA's EEAB, ( (thief, EEAB] retired on June 19, 1972)
when Hunt requested a "retired lockpicker" and entry man in
the time period of March-May, 1972. CIA. Supplemental Materials,
Volume I, Tab 4, Memorandum of June 19, 1973.
t '
b. Hunt, in latel971, requested some "'security types' to check
physical security and monitor telephones in Las Vegas, " in
connection with Hunt's work on the Hughes account with Mullen
and Company. Hunt .was ref erred.by fChief , . EEAfiJto an ^gency
proprietary (name-deleted at Agency; request)]] (CIA Supplemental
Materials, Volume I, Tab 4. )
c. Hunt contacted [deleted at Agency request} (an active CIA employee
until November TO, 1972) sometime in-late 1971 regarding a weekend
entry operation. ~ ’
d. Hunt contacted CIA employee ^deleted at Agency request^
GeEbbexmf 1971 coneemingce rtain Indo- China lffarT^ocuments
( Original CIA' Materials , Volume H, Tab’ D).
e. On December 8, 1971, Hunt requested and received a CIA computer
name trace, by CIA employees, on a person who had allegedly
formed the ^deleted name of Latin American country at Agency
request] National Independent* Party in Decemberr of 1971 (Original
CIA Materials, Volume II, Tab D).
f. The CIA acknowledges that the Deputy Director of Plans of the
CIA didmeetwith Hunt on*October*15, 1971 to discuss Mullen*
and Company problems.
1142
The preparation of this profile was specifically approved by then
Director Helms in late July of 1971. ° The actual compiling of the
profile was done by the CIA's medical services staff and, in parti-
cular, its chief psychiatrist. ^ Testimony has indicated that
a meeting was held on August 12, 1971, in which both Howard Hunt
and Gordon Liddy participated. They told the CIA psychiatrist that
Ellsberg had been undergoing psychiatric analysis. Hunt and Liddy
discussed with him their desire to "try Ellsberg in public, " render
him "the object of pity as a broken man, " and be able to refer to
Ellsberg's "Oedipal complex." At the close of the meeting, Hunt
asked the psychiatrist not to reveal his presence in the profile dis-
cussions to anyone at the CIA, stating that he already had been in
contact with General Cushman and was on good terms with Director
Helms. The psychiatrist has testified recently that he was extremely
concerned about Hunt's presence and remarks. He so reported this
to his CIA superiors, both in memoranda and in a meeting on August
20, 1971. Access to the memoranda of both the psychiatrist and his
superiors has been refused- to thia Committee . 33
The CIA psychiatrist also was given the name of Dr. Fielding as
Ellsberg's psychiatrist and numerous FBI reports of interviews with
EUsb e r g ' s associates, . as weiV: as a memorandum of a reported tele -
phone conve r sat ion between Ellsberg and another, party. . And
recent testimony has revealed that it was reported back to the psy-
chiatrist that Director Helms was advised of his concerns regarding
Hunt's participation and comments. ^ While Director Helms has
^Affidavit of ^Deputy, Director of Support, , hereafter referred
to as the DDsJl and (Director of Medical Services Staff, hereinafter
referred to as the DMSS^ and (jShief of Psychiatric Staff on Medical
Services Staff, hereinafter referred to as Chief Psychiatrist J ,
Original CIA Materials, Volume I, Tab U; Volume II, Tab D.
29ld.
■^Executive Session Testimony of [chief Psychiatrist^, March 6,
1974 (transcription not presently available).
31
Id. , see also Colby letter refusing access, infra .
32.
Id.
33 Id.
1143
denied that he was ever told that Hunt was involved in the CIA's
Ellsberg profile project, ^ it is not without significance that the
time period during which the CIA psychiatrist was briefing his
superiors of his concerns regarding Hunt was circa August 20,
1.971- -a week prior to the developing of Hunt's film of "intriguing"
photographs of medical offices in southern California which
impressed at least one CIA official as "casing" photographs.
With the aforementioned background, we are reminded that when
the second profile on Ellsberg was completed (completion was
delayed until November of 1971), Director Helms took pains to *
inform the White House that:
I
I do wish to underline the point that our involvement in
this matter should not be revealed in any context, formal
or informal (emphasis added). ^6
la his recent testimony before this. Committee, Director Helms,
stated that the above quoted language represented his concern only
for the professional reputations of the- CIA psychiatrists and not
anyconcern over 'the possible illegality of the profile.- 37 It. should
benoted, however, that in a. memorandum from the psychiatrists'
CIA supervisor to Helms in November of 1971, which accompanied
the completed profile, their concern is expressed as follows:
f DMSS^and fchief Psychiatrist] . . . confirmed that
their worries did not . . . involve professional ethics
or credibility. Instead, they are-concerned lest the
Agency's involvement. . . become known and
particularly that : it might -come to. light during any-
34
Executive Session Testimony of Richard Helms, supra
note 3; Testimony of Richard Helms before the Senate Armed
Services Committee, May 17, 1973, at 17.
^See Executive Session Testimony of {Chief, TSdJ , supra
note 20.
36
"Memorandum from Richard Helms to David Young,
November 9, 1971, Original CIA Materials, Volume IE, Tab J.
37
Executive Session Testimony of Richard Helms, supra
note 3.
1144
proceeding. * * * We will be guided by your determina-
tion after you have had an opportunity to read the new
paper. (Emphasis supplied.
The facts and circumstances related above, as derived from the
recently curtailed investigation of this Committee, would appear
to raise many unanswered questions as to the involvement of the
CIA in matters outside its legislative parameters.
38 r” 1
Memorandum from ^DDS j , CIA Deputy Director of
Support, to Richard Helms, Director of Central Intelligence,
November 9, 1971, Original CIA Materials, Volume II, Tab J
1145
HUNT - -MARTINE Z —CIA
Director Helms, upon being questioned about Martinez, has con-
sistently testified to little more than the fact that Eugenio Martinez
was on a $100 per month retainer with the CIA as an informant on
Cubans of interest to the Agency. * Our investigation has revealed
relevant information concerning Martinez' CIA relationship, as set
out below, not previously brought forward in testimony by CIA
officials.
Because of Hunt's close relationship with Martinez at a time when
Martinez was a paid CIA operative, the basic question arises as to
whether the CIA was aware of Hunt's activities early in 1972 when
he was recruiting Cubans to assist in the Watergate break-in.
Prior to assuming a retainer status in the summer of 1971,_ Martinez had
been a full-salaried operative involved in AgencyJdeleted at Agency requestj
endeavors. ^ In November- of’ 1971, a_ month after: his participation hr
the Fieldingbreak-in, Martinez mentioned his contact with Hunt in an
allegedly innocuous fashion to his case officer and the Miami Chief of
Station. ^ There is also evidence that Martinez had mentioned Hunt
even earlier to his case officer. 4 In March of 1972, Martinez advised
^Senate Foreign Relations Committee Report of Richard Helms
Testimony,, February 7, 1973, at 24', 50; Senate Select Committee
Transcript of. Richard Helms Testimony-, August 2, 1973, at 6733-
6734- 6814-6815.
^Executive Session Testimony of j^Miami Chief of Station, herein-
after COsQ , February 7, 1974, at 5-9.
3 ^Martinez' Case Officer (1971- 1972), hereinafter referred to
as Case Officer # Q Memorandum for the Record (excerpt), November 19,
1971, Agent; [*Martinez' Code Name] , found at Tab 1, CIA Supplemental
Materials, Volume H; Executive Session Testimony of £pOS] , sugra
note 2, at 14-18.
4 [Case Officer #lj Memorandum for the Record: (excerpt), supra
note 3; Executive Session Testimony of [COSj, supra note 2, at 13.
1146
the Miami Chief of Station that Hunt was employed by the White
House and asked the Chief of Station if he was sure that he had been
— - f
apprised of all Agency activities in the Miami area. D This con-
cerned the Chief of Station who sent a letter to CIA headquarters
requesting information on Hunt's White House status. ^ On March 27,
1972, the Chief of Station received a cryptic response at the direction
of the Assistant Deputy Director of Plans advising the Chief of Station
not to concern himself with the travels of Hunt in Miami, that Hunt
was on domestic White House' business of an unknown nature and
that the Chief of Station should "cool it. (It should be remembered
that this was after ’he Agency provided Hunt with TSD support in July
and August of 1971. It is not explained why Hunt, who had "used" the
CIA, was not of more interest to the Agency, especially when he was
contacting a current operative, Martinez. ) The tone of this letter
infuriated the Chief of Station and left him uneasy about the matter. ®
Accordingly, the Chief of Station requested that Martinez prepare in
Spanish a report on the Hunt information provided the Chief of Station
in March. ^ Martinez compiled >a "cover story"^® on April 5, 1972,
^Executive Session Testimony of fCQS*| , supra note 2, at 23—27.
^ Id. at 25-27; See([cOi0 Memorandum for Chief, [[deleted at Agency
requestj, March 17, 1972, Subject: Miscellaneous Information from
[Martinez 1 Code Name] , found at Tab 1, CIA Supplemental Materials,
Volume H; [COSJ [sensitive] letter, March 17, 1972, found at Tab 1,
CIA Supplemental Materials, Volume II.
^Executive Session Testimony of[^30s[], supra note 2, at 31-34;
[[chief, Cuban Operations Branch, Western Hemisphere Division, herein-
after referred to as-Chief, COB^letter to[COS[) , March 27, 1972,
found at Tab 1, CIA Supplemental Materials, Volume H.
^Executive Session Testimony of [COS^, supra note 2, at 32, 80.
9 ld. at 33-34, 38-40; [Case Officer #1] Cable deleted at Agency .
request]], December 15, 1973, found at Tab 2, CIA Supplemental
Materials, Volume II; Executive Session Testimony of Eugenio Martinez,
December 10, 1973, at 45-47.
^Executive Session Testimony of[cOS[], supra note 2, at 91;
see Executive Session Testimony of Eugenio Martinez, supra note 9,
at 1 1 .
1147
after being told by his case officer not to put anything in the report
which might come back to haunt him. H The Spanish report, which
did not contain any of the alarming innuendos suggested earlier by
Martinez, was maintained in the Chief of Station's file until after
the Watergate break-in. ^
It is known that Martinez had two case officers during 1971 and 1972.
There is conflicting evidence concerning the precise date of the
spring, 1972 case officer change-over. “ It is known that Martinez
met with his last case officer on June 6, 1972, and at that time had
at least two reporting requirements, i. e. , maritime operation
information and information pertaining to possible demonstrations (
at the Miami conventions^ ’contrary to earlier testimony by CIA
officials. The Agency has not afforded this Committee an unabridged
examination of the case officer contact reports, despite requests for
same.
The Agency has advised that Martinez' first case officer was on an
"African safari" throughout Juae of 1972. ^ The second case officer
1 1 Executive Session Testimony of Eugenio Martinez, -supra note
9, at 53, 58-59. f~Carse: Officer fl\ Cab 1 efd eleted at Agency requesQ ,
supra note 9.
^Executive Session Testimony of {COS^, supra note 2, at 33-34.
See also Original Spanish Report and Translated Spanish Report, found
at Tab 1, CIA Supplemental Materials, Volume I (attention to discre-
panGie s). «.
13 Tab:Z,; CIA Supplemental Materials, Volume VII (indicating
April 14, 1972 change-over); Tab' 10, Original CIA Materials,. Volume
HI (indicating a. March, 1972 change-over);: Executive Session Testimony
of ^COS^ , supra note 2, at 36 (indicating April 23-30, 1972 change-over).
^Executive Session Testimony of (Case Officer #iT\ , February 4,
1974, at 25-26, 41-42.
3 3 Supra note 1 .
l^CIA Deputy Legislative Counsel showed this staff a printed
itinerary for the first case officer which contained the referenced
entry. Legislative Counsel has not made that itinerary a part of the
supplemental materials furnished the staff.
1148
has testified that the former case officer was in Miami on June 19,
1972. 1^ The first case officer has been transferred to Qndo china]
and was not made available for interview by our Committee. The
second case officer stated in his interview that he was rushed to CIA
headquarters the week following Watergate and told that he would be
required to stay there until September for reasons related to his
involvement with Martinez. 18 This case officer remains assigned to
CIA headquarters.
On the morning of June 18, 1972, the Miami Chief of Station dis-
patched a cable to CIA headquarters regarding the activities of
Martinez but deliberately omitting Martinez 1 prior reference to Hunt's
activities. ^ On June 19, 1972, the Chief of Station received corres-
pondence from CIA headquarters advising him to keep in better touch
with his operatives in Miami. This prompted the Chief of Station
to forward a copy of the Martinez report in Spanish to headquarters. 8 ^
The Chief of Station was confounded as to why he was not told to
terminate the Martinez relationship if the CIA headquarters suspected
the involvement of Hunt in political activities. 22 He later brought
this matter up with the Assistant Deputy Director of Plans, who told
him that the Agency was uneasy about Hunt's activities for the White
House in "March or May" of 1972. 23 The Assistant Deputy Director
^Executive Session Testimony of [Case Officer # 2 ], supra note
14, at 73.
l8 Id. at 49-50.
!9ld. at 36-3.7, 78.
[Chief, W estem Hemisphe re Division] "Dear F riend" letter,
June 20, 1972, found at Tab 2, CIA Supplemental Materials, Volume IL
2 l^COs]"Dear Friend", letter, June 20, 1972, found at Tab 2,
CIA Supplemental Materials, Volume II; Executive Session Testimony
of [COS], supra note 2, at 73-75.
^Executive Session Testimony of [COS^ , supra note 2, at 80-82.
23 Id. at 82-83.
1149
of Plans testified that he assumed in March of 1972 that Hunt was
involved in partisan political work for the White House and that
this assumption formed the basis for his guidance to the Miami
Chief of Station at that time. 24 jje further testified that the Miami
Chief of Station wanted to check on Hunt's activities domestically, 25
an allegation denied by the Chief of Station2& and not reflected in
any of the CIA correspondence made available to us.
Despite conflicting evidence from the FBI and the CIA, ^ it is
known that the Agency received information on June 19, 1972, from
an operative that Martinez 1 vehicle was at the Miami airport and
contained compromising documents. 28 The Agency contacted tlie
FBI with this information on June 21, 1972. ^ Our staff has yet to
receive a satisfactory explanation regarding the aforementioned time
lag and an accounting of Agency actions during the interim.
2^Executive Session Testimony of ADDP , February 28, 1974,
transcript not presently available.
25jd.
o /
^Executive Session. Testimony of COS: , supr a note 2, at 84.
Z7 ia~ at6Zt65; Report of: Interview, off Agent Robert Ii.. Wilson,
dated. January I I, 1974, at 4v A comparison reveals a discrepancy
as to 1 manner in which FBI was notified and raises questions concerning
what the FBI found.
28Executive Session Testimony of COS , supra note 2, at 58-60;
Executive Session Testimony of Case Officer §2 , supra note 14, at
15-17.
2‘^Report of Interview of Agent Robert L. Wilson, supra note 27,
at 3.
1150
ACTION REQUIRED
The following is a breakdown by area of interest of action desirable
to complete the Watergate -related CIA investigation commenced by
this staff.
MARTINEZ RELATIONSHIP
1. Interviews **
a. Chief, Western Hemisphere Division (1971-April, 1972).
b. Chief, Western Hemisphere Division (April, 1972-1973).
c. Chief, Cuban Operations Branch, Western Hemisphere Division
(1971-1972).
d. Martinez' case officer (1971-March, April, 1972). Prior efforts
to dnterview this-indi vidua! .havebeen frustrated. by. virtuevof his .
present assignment in[lhidochina~J .
e. Executive Assistant to the ADDP (1971-1973).
f. Executive Assistant to the DDP (1971-1973).
The aforegoing interviews are necessary.in order to determine the.
extent of the CIA 1 s knowledge of "Hunt? s activities. .
g. Chief, Miami Office- of Security v (!une-, 1972).
h. Miami Chief of Station's informant with regard to Martinez' car.
i. Above informant's source with regard to Martinez' car.
These interviews are necessary to explain the time lag in giving
notice to the FBI; to identify-CIA actions (particularly the Miami
Office. of Security) regarding.this.information; and to determine the
scope of information received by the Agency and transmitted to the
FBI.
1151
2. Documents
a. All Martinez case officer contact reports (1971-July, 1972).
We have repeatedly requested access to unabridged reports, but
the Agency has made available only an abridged version of early
reports. Access is necessary to determine the scope of Martinez'
•relationship in the relevant time frame and whether he provided
any Watergate -related information to his case officer.
b. All CIA correspondence re: Martinez car (cables, etc. ). This
information, although not previously requested per se, is critical
to the documentation of Agency action on this issue and, to resolve
conflicting evidence supplied by the FBI.
c. All reports or memoranda relating to the debriefing of Martinez'
last case officer upon his return to Washington, D. C. , after the
Watergate break-in. This information has been previously
requested but not provided to this staff.
MULLEN AND COMPANY RELATIONSHIP
1. Interviews
a. Mullen and Company secretaries (1971-1972). This is needed to
confirm or deny suspicions relevant to the indicated Agency/
Bennett/Hughes link.
b. Far east cover (June, 1972),
cs. European cover.
The aforegoing interviews- are necessary toameaningful under —
standing of the "WH flap" and to gauge any relationship of same to
the Watergate break-in.
d. Chief, Central Cover Staff (1971-1972). This interview is
necessary to clarify the "WH.flap" and to ascertain the Agency's
response to the Bennett information contained in the summer,
1972 memoranda.
35-687 0 - 74 - 74
1152
2. Documents
Any and all reports of contacts between ^Mullen and Company
Case Officer] and Mullen, Bennett, Hunt and anyone else at
Mullen and Company from April 30, 1970 to January 1, 1974,
including but not limited to logs, records, or memoranda
reflecting such contact or the content of that contact.
This information was requested during the February 4,
1974 Executive Session of (Mullen and Company Case Officer]
along with data reflecting changes in the procedure for
maintaining and/or making reports of contacts outside the
Agency.
TSD SUPPORT OF HUNT
1 . Interviews
a. (tSD Technician #3] -- TSD technicial who
developed the photographs for Hunt and blew
up a particular photograph for ^Deputy Chief,
TSD^j .. Determination needed as to what was
done with blow-up and whether it was subse-
quently used for briefing others at CIA.
b. £tSD Technician #z] -- TSD technician who
purchased the Uher 5000 tape recorder and
equipped it for Hunt's purposes.
c. ^Executive Assistant to DDp)-- Consulted during
initial stages of TSD support and relayed the
TSD requirement to the DDP.
1153
2. Documents
a. "Mr. Edward" file -- The file containing all memoranda
and other materials relating to the CIA's TSD support of
Hunt. This file has been requested, hut has not been
.produced, despite the fact that the file was given to Director
Colby after the Watergate break-in.
b. All memoranda prepared by ^Executive Officer to Director
of Security^], or any other CIA employee, regarding the TSD
of Hunfj, including but not limited to all internal memoranda
concerning the TSD support which is not contained in the
"Mr. Edward" file.
PSYCHOLOGICAL PROFILE OF DANIEL ELLSBERG
1154
b. All documents, reports, or memoranda relating in any way
to the psychological profiles, including but not limited to the
internal memoranda prepared by j^Chief Psychiatrist], (JDMSSJ , and
VdPSI regarding the two psychological profiles. Testimony has
established that memoranda for the record were written
detailing the concerns about Hunt. Director Helms has testified
that he has no knowledge of same.
c. The so-called "psychological profile file", presently located in
the office of the Director of Medical Services, CIA, containing
all materials regarding the preparation of the psychological
profiles,. Note: This file was previously requested, as well
as the materials described in parts (a. ) and (b. ) above. By
letter dated March 8, 1974, Director Colby indicated that he
would release this information to the oversight committees only.
TAPES
1. Log maintained by the Office of Security wilh reference to known
tapings of which transcripts are thought to be available. This has
been previously requested, but not furnished.
2. All logs, memoranda, or_notat±ons reflecting communicatinns into
or out of the Office of Security for the time period from June 16,
1972 to June 22, 1972. This information has been requested but it
is available to the Senate Armed Services Committee only. Such
information is critical to any determination as to the chronology of
Watergate notification and related actions.
3. Access to the five inch reel of tape labeled, "McCord Incident/ 18- 19
June 1972, " which was found in the Office ofSecurity.on March 1 ,
1974.' It Is not ; khownxwhafci s xontaine&rihrthis-tape-- but its impor t
tanceis ob viou s .
MISCELLANEOUS
1. Access to the special Watergate file formerly- maintained in the
Office of Security. This file was requested as early as mid-January,
1974,. and its existence at that time was denied by legislative liaison.
Sworn testimony has since confirmed existence of such a file ; now
under control of the Inspector General.
1155
2. Any and all CIA files relating to the activities of E. Howard Hunt.
This was requested in January of 1974 and was ignored by the Agency.
We are aware of at least an executive registry file in which information
on Hunt was placed in 1971 and suggest that this would be a good
starting point for compliance with this request.
3. Any and all CIA files relating to G. Gordon Liddy during the time
frame of January, 1970, to the present. When this request was made
in January of 1974, the staff was advised that CIA information on
Liddy was limited to sensitive briefings, the subject matter of which
was beyond the purview of this Committee. 2 Files relative to these
briefings need-to be examined, particularly in light of the time period
of same, i. e. , August and September, 1971.
4. Any and all CIA files pertaining to attorney [^ame deleted at Agency
reque st] and /or his law firm from the period January 1971 to the
present. While the CIA has confirmed that [attorney] is a former
case officer and that [potentially significant information deleted at
agency reque st] during the period of time that [attorney] served as
counsel for the Committee to Re-Elect the President, 3 - contact
reports and memoranda must be reviewed in raw form before a
determination can be made as to the impact of the aforementioned
facts.
5. Office calendars for Director Helms, General Cushman, and the
Deputy Director of Plans for the time frame from January of 1971
through June of 1973. These calendars have been previously requested
and are critical to a thorough investigative analysis of knowledge
available to these respective officials at the critical times. These
calendars have not been made available to this staffffor review.
All: recordsj pertaining; to: Agency financing of Egil Krogh's activities,
are evidenced by sworn testimony before this Committee. Also,,
interviews of superiors of [Secretary to Chief, CIA Narcotic s
Control GroupQ . **
2 See CIA' s response to this inquiry regarding Liddy, Supplemental
Materials, Volume II , Tab 13.
3 See CIA's response to this inquiry regarding ^.ttorney^ , CIA
Supplemental Materials, Volume II , Tab 14; Volume IV (CIA Memorandum,
June 28, 1973).
*^ See Executive Session Testimony ofjsecretary to Chief, CIA
Narcotics Control Grouj^ , March 2, 1974, (transcription not presently
available).
1156
7. Interviews of [chief, EEAb] , (former outplacement director),
[Agency employee] , [Agency employee], ^former Agency employe^ ,
(former Agency employee} and attorney [former Agency employee^,
all of whom were either in the employ or were former employees
of the Agency at the time they discussed Hunt operation activities
(including entry operations) during 1971 and 1972.
8. A review of all CIA activities (regardless of nature or degree of
support) in Mexico during the calendar year, 1971-1972. This
information, which is relevant to an objective assessment of CIA's
post-Watergate posture and pre -Watergate potential involvement, has
been requested (to an extent consistent with national security) since
February 1, 1974. ^
9. The "Pennington File," which was previously requested and made
available only to the House Armed Services Oversight Committee.
This file contains memoranda and other documents dealing with the
activities of the CIA operative-, Pennington, who was alleged to have
participated in the burning of documents in the McCord home after
the Watergate break-in. This file also contains data regarding the
"domestic activities" of Pennington, and the CIA has made it known
that there are "gaps" in this file during certain relevant time periods.
10. At the conclusion of his Executive Session on Friday, March 8,
1974, Ambassador Helms testified concerning an individual in a
peculiar position to know the activities of both the Agency and the FBI.
While Helms knew of: no Watergate information in this individual's
possession, other evidence suggests the contrary. Consideration should
be given to interviewing this individual who has already commenced
preparation of a Watergate-related memorandum in response to a
previous request by the staff. ^
^The CIA, through its legislative liaison, has confirmed that
Mexico is an "important country" to the CIA, but has refused to provide
any other information regarding CIA Mexican activities during the
1971-72 time period.
^ See C IA Supplemental Material, Volume II, Tab 18.
1157
11. Michael Mastrovito of the Secret Service should be interviewed
concerning his Agency communications on June 17, 1972. Agency
documents indicate that Mastrovito agreed to downplay McCord's
Agency employment; that Mastrovito was being pressured for
information by a Democratic state chairman; and that Mastrovito
was advised by the CIA that the Agency was concerned with McCord's
emotional stability prior to his retirement. ?
^See CIA cable traffic shortly after the Watergate break-in,
CIA Supplemental Material, Volume VI.
1158
CENTRAL INTELLIGENCE AGENCY
Washington, D.C. 20505
28 June 1974
Honorable Howard H. Baker, Vice Chairman
Select Committee on Presidential Campaign Activities
United States Senate
Washington, D. C. 20510
Dear Senator Baker:
My staff has advised me of the rather extensive discussions
they have had with your staff with respect to the staff report which is
to be released on your "CIA Investigation. " This report presumably
encapsulates the results of the process we started last January when
I assured you of our complete cooperation. In subsequent meetings,
we provided information, some of extreme sensitivity, so that you
could evaluate data from other- sources.. There-, then ensued an almost
continuous exchange of information between our respective staffs.
Eventually, in this spirit of cooperation, 24 Agency witnesses appeared
before your staff on a voluntary basis to answer questions under oath.
Our contribution consisted of over 700 CIA documents and 2, 000 pages
of testimony.
We have received a revision of the staff report with a request
that it be. sanitized- by bracketing material to be- deleted on security
gmunds.- I unde r stand: that, your staff is- preparing supplements: to the
report which are to be submitted: to us for sanitization and comment,
and that the report and the supplements will be made a part of the
Committee's open record although they will not be included in the
Committee's formal report. It is my further understanding that the
transcripts and ten volumes of Agency material will not be released
but will be removed from Committee records and placed under seal
in an appropriate repository and will not be released without CIA
approval.
1159
It bad been my hope that sufficient concrete evidence would have
been produced to assure you that CIA had no prior knowledge of the
Watergate or Ellsberg break-ins or coverups. However, when I reviewed
the summary staff report submitted to me on 1 April, I realized that you
had not been so assured. In some 160 comments we attempted, by citation
to the evidence available to us, to communicate our thoughts in this respect.
I have now been advised that practically none of our comments which we
prepared on 3 April have been reflected in the revision of the staff report.
If the revised report is released with its present thrust it implies that there
is reason to believe that the Agency and its officers and employees had
prior knowledge of and were wittingly involved in the break-ins and the
coverup.
I recognize that you have every right to subscribe to conclusions
in the staff report which are at variance with those I have drawn from
the evidence presented during your investigation, which I have developed
as a result of my own intensive internal investigations and which has been
reviewed independently by other investigative bodies within both Houses of
the Congress, and by the Special Prosecutor and the Federal Bureau of
Investigation.
It thus appears we have come to differing views on this subject.
If the report is made available to the public in the form proposed, I am
concerned that the Agency can be the subject of what I deem to be unjusti-
fiable conclusions that Agency officers or employees were knowingly
involved in the break-ins in the Watergate or Dr. Fielding's office'or
subsequent coverups- In such case, I may feel it necessary to take an
appropriate public position to assure that the conclusions from my investi-
gation and the results of other investigations are also known.
I am returning herewith the revised' report "CIA Investigation"
which was given a member of my staff by Mr. Liebengood in the late
afternoon of 27 June 1 974 without repeating our substantive comments
but with security deletion
Enclosure
cc: Chairman Sam Ervin
1160
SAM J. BRVIN, JR., N.C-, CHAIRMAN
HOWARD H. BAKER. JR., TKNN., VICE CHAIRMAN
HERMAN E, TALMADOE, OA. EDWARD J. SURNEY . FLA.
DANIEL K. 1NOUYE. HAWAII LOWELL P. WE1CKER, JR., CONN.
JOSEPH M. MONTOYA, N. MEX.
SAMUEL DASH
CHIEF COUNSEL AND STAFF DIRECTOR
FRED D. THOMPSON
MINORITY COUNSEL
RUFUS 1— ED Ml ST EN
DEPUTY COUNSEL
'jilCmleb Ubieties Senate
SELECT COMMITTEE ON
PRESIDENTIAL CAMPAIGN ACTIVITIES
(PURSUANT TO 8. RES. W. ISO CONOR ESS)
WASHINGTON, D.C. 20510
July 1, 1974
Mr. W. E. Colby
Director
Central Intelligence Agency
Washington, D.C. 20505
Dear Bill:
I appreciate your letter of June 28 and the accompanying
staff report with security deletions. AL1 Agency security deletions
have been complied with and your recommended language has been
substituted where appropriate.
Neither the Select Committee's decision to make this
report a part of our public record nor the contents of the report
should be viewed as any indication that either the Committee or
I have reached conclusions in this area of investigation. On the
contrary, the seventh section of the report suggests several areas
of further inquiry that we recommend be carefully undertaken by
the appropriate oversight committees or by the joint committee
for the oversight of intelligence activities, which I plan to recommend
as part of my contribution to the Committee's report.
With regard to the transcripts and ten volumes of Agency
materials, it is my desire that the Agency sanitize these materials
in order that the 'Committee can make a determination as to how
the materials can be used. I am sure we can reach a satisfactory
resolution of this question.
Howard H, Baker, Jr.
1161
PRELIMINARY
CIA COMMENTS ON SENATOR BAKERS
REVISED STAFF REPORT U CIA INVESTIGATION ' !
Footnote 18
Robert Bennett and the Mullen Company
The testimony of Agency witnesses indicates that the Agency had
no interest or involvement in any of the aforementioned activities of
Mr. Bennett and no evidence to the contrary has been made available
to the Agency.-
Footnote 23
Bennett initially requested full reimbursement. The CIA's decision
for payment of half the fee was predicated on the fact that cover
placements had complicated matters for the Mullen Company. The
fact that Bennett was serving as liaison between Hunt and Liddy was
not disclosed to CIA.
Footnote 28
CIA has explained that efforts to terminate projects and move
assets subject to compromise as a result were closely held
even within the Agency in order to protect these efforts. The
"Western Hemisphere flap, " of course, had no relationship to
Watergate.
Pennington Matter
Footnote 5
The next morning the Director of Security reversed this decision and
the Security Watergate files were made available for review,. He has
testified that he was first aware of the reports concerning the burning
of documents at Mr. McCord's home on 20 February 1974 and caused
a memorandum about the incidents to be drafted for reporting to the
Director. This memorandum was made available to the Director
on 22 February and v/as immediately made available to this and
other appropriate Committees.
1162
Footnote 6
The CIA never directed Pennington to engage in activities in
violation of the CIA’s charter.
Footnote 14
This arrangement was established to assure that sensitive
and classified information concerning operations and personnel
would be held at the top level of the Agency and discussed with
only the top levels of Justice and the FBI. The Agency was
aware that there were leaks in the FBI field office which was
the routine contact point for the Office of Security.
Tapes
Footnote 8
The CIA undertook a massive effort to reconstruct the record,
and among other things reviewed in excess of 700, 000 visitor
passes to the Agency's Headquarters Building, reviewed the
appointment calendars of the officers involved and the admittedly
inconclusive tape logs themselves, and no evidence conflicting
with the testimony of Ambassador Helms and his secretary was
discovered. CIA has reviewed with Senator Baker and two of
his designees the information produced as a result of this
reconstruction, including the actual logs.
Hunt-TSD Support-Ellsberg Profile
End of first paragraph
There is no Agency record or testimony indicating any prior
Agency awareness of the Fielding or the DNC breakins or the
Chappaquiddick investigation.
1163
Footnote 1
Immediately following the Watergate breakin the Agency reported
to the FBI on the provisioning of Hunt and a then unknown associate,
later identified as Biddy.
Footnote 14
"Mr. Edward file" material has been made available for the
Committee's review, and the Committee already possesses the
relevant material.
Footnote 22
At that time, the name Dr. Fielding had no meaning to the Agency
personnel involved.
Footnote 24
The decision to cut off support to Hiint was made in the face of
escalating demands and was not based upon the development of
the photographs.
Immediately following Footnote 26
The "recent testimony and secret documents" referred to were made
available to congressional committees as far back as May ofT973.
Footnote 31
The basic memoranda of the psychiatrist’s superiors are contained in
CIA materials originally provided to the Committee in the summer of 1973.
Footnote 34
Ambassador Helms has testified that he had no knowledge of E. Howard
Hunt's role in the profiles. The former Director of Security for CIA
has testified that he was never advised of Hunt's role in the profiles.
Further, there is no other Agency official who had knowledge of both
the provisioning of Hunt and Hunt's involvement in the preparation of
the Ellsberg profile. .
1164
Hunt - Martinez - CIA
First paragraph after Footnote 1
There is no evidence within CIA that the Agency possessed any
knowledge of Hunt’s recruitment of individuals to assist in the
Watergate or any other breakin.
Footnotes 14 and 15
During this period of Martinez’ service with the CIA, he was a
casual informant. Testimony shows that the Agency's general
interest was to assist him in his efforts to obtain private
employment at which time his relationship would be completely
severed. Martinez' general reporting requirement involved
Cuban exile maritime activities. In addition, in support of
requirements of the Secret Service, he, along with other local
informants were to be alert to information relating to activities
of Cuban exile groups as they might affect the Miami political
conventions.
Immediately following Footnote 29
CIA has supplied information that there was an error in the
original report received by the Agency on the description of the
car. That error was subsequently corrected and immediately
reported to the FBI at the Headquarters level in Washington.
Action Required
Tapes
Number 3
The transcripts of the only relevant Watergate-related material
on this tape have been made available to the Committee, and the
Committee has been advised that no other relevant data exists
on this tape.
1165
Mis c e ilarie ou s
Number 4 - Footnote 3
CIA did not have any contact with Mr. Paul O'Brien after he
left its employ in 1952.
Number 6 - Footnote 4
As a member of the Cabinet Committee for International Narcotics
Control (CCINC), CIA was asked to assist in supporting the
foreign travel of the staff of the Executive Secretary who, at that
time, was Egil Krogh. Thus, as has been testified to earlier,
the only support provided to Mr. Krogh, in his capacity as
Executive Secretary of the CCINC, was for the purpose of foreign
travel and the funds were accounted for in the proper manner.
MR. DANIEL K. INOIJYE
U.S. Senator From the State of Hawaii
and
MR. JOSEPH M. MONTOYA
IT.S. Senator From the State of New Mexico
Despite the fact there is no unanimity among the members of the
committee as to the constitutionality, advisability and practicality of
providing public financing of Presidential and other Federal cam-
paigns, there is a consensus in the U.S. Senate and among the public
at large in favor of such reform of our electoral system. We count our-
selves part of that consensus.
The testimony and evidence made public during our hearings docu-
ment the inherent potential for abuse- and corruption in any campaign
financing system that is dependent upon a small number of large pri-
vate contributors. Unfortunately, a cure for these abuses which would
place strict limitations upon campaign contributions and expenditures
would produce an equally unfair system. Such limitations have the in-
evitable effect of increasing the existing advantages of the major
political parties and well-known individuals — that is, incumbent
officeholders — who have greater access and appeal to donors, over
minor parties and unknown individuals who wish to enter the political
arena.
An open, fair and honest campaign financing system must com-
bine effective and timely public disclosure of the sources of campaign
dollars, realistic limitations upon contributions and expenditures in
campaigns and an efficient method for increasing citizen participa-
tion in the financing of campaigns.
In his State of the Congress Address of February 6, 1974, Major-
ity Leader Mansfield stated, “We shall not finally come to grips with
the problems (of our campaign methods) except as we are prepared
to pay for the public business of elections with public funds.” The
Senate Committee on Rules and Administration, in its favorable re-
port on S. 3044 — the Federal Election Campaign Act Amendments of
1974 — which passed the Senate on April 11, 1974 by a 53 to 32 vote,
stated : “The election of Federal officials is not a private affair. It is the
foundation of our Government.” Senate approval of a comprehensive
system of public financing of Federal elections as shown in the vote
for S. 3044 is but the latest in a number of successful legislative
measures designed to bring public dollars into the electoral arena in
order to offset the corrupting reliance on large private contributors.
For public financing of campaigns is not a new idea. In fact, it is
not new law. Public financing measures are now on the books at the
national level — in the form of the dollar tax checkoff and tax credits
( 1167 )
1168
and deductions for small political contributions — and in many States.
The constitutionality of these measures st ands unchallenged.
Congress adopted both the checkoff and the tax incentive in 1971.
It is important to look at the actual results since then, for critics of
public financing have sometimes attempted to interpret the early re-
sponse as demonstrating lack of popular support for the idea. We
believe that the opposite is in fact true : in 2 short years the American
people have shown that, given the chance, they are very willing to
support this important innovation.
In 1972, the first year it was in effect, 3.1 percent of all tax returns
filed were “checked off,” producing the first $3 million to $4 million
for the new Presidential election campaign fund. Anyone who says this
was an inauspicious beginning must be reminded that the checkoff was
in effect hidden on a separate tax form, was unseen by most taxpayers,
and that virtually no public education was undertaken to explain the
new system and how it worked.
As a result of congressional pressure, the IRS remedied this major
flaw last summer, requiring that the checkoff be placed visibly on
page 1 of the IRS form 1040 for 1973 and thereafter. In addition, after
a court challenge, citizens who failed to use the checkoff in 1972 were
given a second chance. As a result, a special makeup checkoff box was
placed on the 1973 returns.
The response? More than 15 percent of the 1973 returns used the
checkoff designating $17,575,054 for the Presidential fund. This 15 per-
cent, equals over one-quarter of those who actually voted in the 1972
Presidential election. The current IRS projections indicate that there
will ultimately lie at least $29 million in the fund by the end of the year.
And, if taxpayers continue to check off at a rate no higher than this
year, it will mean at least $64 million in the fund in time for the 1976
Presidential election. Moreover, taxpayers are rapidly becoming aware
that dollars checked off do not mean additional taxes. Instead they
represent an authorization for Congress to appropriate for the Presi-
dential election campaign fund the amount checked off.
Given the degree of public cynicism about all politics this spring, a
15 percent checkoff rate may well represent the bottom rather than the
top line of public support. If the number of those checking off increases,
as we are convinced it will, with greater citizen education and under-
standing, so will the amount of money appropriated bv the people to
promote open, honest elections. The voluntary fund is clearly an excel-
lent way to provide a broader system of public financing for qualified
Federal candidates.
Tax incentives and, if necessary, general revenues are additional and
legitimate sources for public campaign funding. We do not share the
concern expressed by the majority of the committee over using Treas-
ury funds for public elections. Tax credits and deductions are methods
of public financing of campaigns that merely bypass tax collection.
We are not adverse to continued or expanded use of tax incentives to
aid in paying for national campaigns, and after further study the
Congress may well wish to change the Internal Revenue Code to
strengthen inducements for campaign contributions.
We do believe that any candidate or party which receives public
funds should be required to manifiest significant public support. A
system of matching private contributions with public money, such as
1169
provided in S. 3044 meets this requirement. It also maintains the ele-
ment of individual initiative that is so essential to the democratic
process.
We have only to look around us to see that, public financing is a
major new political issue, that it may become the most important new
aspect of our continuing experiment in democracy. The current activity
of many public officials and citizen organizations in debating methods
and mechanism of public financing indicates a realization that not all,
or even most, of the: problems of our current election system can be
solved by more criminal laws, more controls and limits on political
activity.
We are faced with a need to change not just, the rules but the frame-
work within which our elections and campaigns are conducted. Public
financing is no panacea itself, of course, and its staunchest advocates
are the first to note that it raises its own new and different questions.
What public financing can do, however, is move us one step closer to-
ward that goal which we must always and continually pursue — open,
fair, honest, elections in which the ideas of citizens and candidates com-
pete regardless of the size of their pocketbooks. With the energy and
good faith this country brings to its biggest, problems, we can devise
an equitable system of public financing that will help treat an illness,
evident in the Watergate tragedy, that goes to the heart of this
democracy.
MR. EDWARD J. GURNEY
U.S. Senator From the State oe Florida
I am in basic agreement with the thrust of the report. However, I do
point out that because the bulk of the report came in during the
July 4th recess of the Senate, and the last portions within hours of
the deadline time of submission of these views, there has not been
sufficient time to review the report thoroughly.
There are observations and judgments in the report with which I
disagree and I feel sure that there would be other points of disagree-
ment had there been time to go over this voluminous 3,000 page report.
The investigation clearly reveals that there was a scheme and an
organized effort, participated in by persons in high official places in
this administration, to obtain political intelligence by breaking and
entering into Democratic National Committee headquarters. There is,
however, a dispute in the evidence as to who was responsible for
putting this plan into operation and who knew about the Watergate
break-in and when. This is a matter that should be determined by
the judicial branch of our Government.
The testimony and documents presented to the committee also clearly
shows that there was a conspiracy to coverup the Watergate break-in
and that certain persons at the White House were involved in that
conspiracy.
The evidence is clear as to the part played by some characters in
this tragedy and unclear as to what others may have done. It was
not the mission of the Select Committee, pursuant to Senate Joint
Resolution 60, to place responsibility for individual criminal acts.
The committee had an important responsibility in its efforts to un-
cover the salient facts surrounding the Watergate break-in and cover-
up and other improper activities occurring in the 1972 election cam-
paign. By exposing these unethical, improper and illegal political
campaign practices to the American electorate, we have provided the
necessary groundwork to bring about a strong demand for needed
political campaign reform. As a consequence, the Senate has already
enacted a far reaching campaign reform bill which is now under con-
sideration in the House.
Despite reservations which many of us held at the outset and the
possibilities of prejudicial effect upon subsequent criminal actions, I
believe that the televising of the hearings served a very useful pur-
pose. Overnight the whole country became jurors as well as spectators
in the unfolding drama. The American people were permitted to ob-
serve everything which transpired — the questions and answers, the
witnesses’ responses, the actions and attitudes of the panel of Senators
and their staffs. I think, too, that by televising our proceedings we
counteracted prejudicial selectivity by the media of the material pre-
sented to the committee.
I do believe, however, that we spent too much time on the hearings,
especially on testimony from witnesses of minor importance to the
investigation, and on certain matters, like the burglary of the office
( 1171 )
1172
of Ellsberg’s psychiatrist, which were not germane to our inquiry.
It is obvious that, while it could not confine itself to strict evidentiary
rules, the committee did permit too much unsubstantiated evidence
to enter the record. Because of the impact of the hearings upon mil-
lions of Americans, who watched their progress on television or read
newspaper accounts of what was happening, I believe that we should
have exercised greater discretion in handling hearsay testimony.
I was also troubled by the continual leaking of information from
the committee. It was not unusual to find that matters which tran-
spired in executive session appeared in the headlines the next morning.
Permitting highly prejudicial matters to be disclosed to the media
reflected badly upon the manner in which the United States Senate
conducted this important and highly sensitive investigation.
I agree emphatically that political spying should be purged from
the American political scene. I consider that the committee’s exposure
of the machinations involved in the Watergate affair will help to
eliminate “dirty tricks” as an accepted political campaign practice.
It must be emphasized that, from our own political experience and
from the evidence we have received concerning this one notorious
political affair, we know that this administration or the Republican
Party does not have a monopoly on “dirty tricks” or other illegal
campaign activities. It should be pointed out and it is clear from the
evidence that the abuses of 1972 were committed by a few misguided
individuals, overambitious and overzealous in their efforts on behalf
of certain candidates and causes. The wrong-doing was not the work
of the Republican Party or its professional campaign staff. The vast
majority of people who worked in the 1972 Presidential campaigns,
Republican or Democrat, worked in honorable fashion for their candi-
dates with no knowledge nor use of any Watergate type activities.
I have strongly supported efforts to reform the campaign laws, and
the experience of the recent Presidential campaign demonstrates the
need to enforce these laws consistently and strenuously. The most per-
vasive abuse of 1972 was the careless handling of cash contributions,
which should be barred from future elections. This matter was common
to both political parties, but it was to a lesser extent a problem for the
Democrats since the Republican Party held the White House and was
heavily favored to win reelection, and so inevitably attracted more
money.
I favor a simplified codification of Federal and State election
statutes to which the candidates and the public can readily refer. We
have enough laws on the books to deal with illegal campaign practices,
but we desperately need a handy guidebook for campaign staff mem-
bers of candidates for public office.
I am totally opposed to the committee’s recommendation for a Public
Attorney with prosecutorial powers outside of the executive branch
of the Government. The President of the United States must be held
responsible for the business of the executive branch, including prose-
cution of criminals. It is his constitutional duty — and his alone — to
faithfully execute the laws of the land. I oppose the creation of a czar
who could literally hound and intimidate governmental officials in the
proper exercise of their responsibilities. Criticisms directed at certain
officials for their handling of the Watergate investigations reflect dis-
satisfaction with individuals rather than with institutions. I do favor,
however, the establishment of an office within the Department of Jus-
1173
tice charged with investigating alleged campaign law violations and
prosecuting wrongdoers. (See Attachment A for legal argument.)
Finally, I must add that I was utterly appalled by the revelations
of Watergate, and I deplore the performance of individuals employed
by or connected with the Committee To Re-Elect the President which
the committee’s hearings has brought to light. Of course, we cannot
legislate goodness, reform, mankind or alter the ethical standards of
individuals. But I believe that the Select Committee’s findings relative
to the 1972 Presidential campaign will profoundly affect the actions
and attitudes of political partisans in future campaigns. I hope that a
genuine “post Watergate morality” will prevail in the political life
of our country. I hope, too, that the committee’s investigations of the
Watergate break-in and coverup and the prosecutions that have been
generated by our inquiry will deter future administrations, Republican
or Democrat, from indulging in illegal practices and improper conduct
in their quest for victory and political power.
I wish to express my personal appreciation to my colleagues on the
committee with whom I have been fortunate to labor in this important
task and to whom I have been able to express freely my views over
the past 16 months.
ATTACHMENT A
Legal Argument Against the Establishment of an Independent
Public Attorney
The recommendation for a Public Attorney with prosecutorial
powers outside of the executive branch is unprecedented in our consti-
tutional history. Its unprecedented nature is a forceful reminder of
the constitutional problems inherent in such a blend of the traditional
separate roles of the prosecutor and the judiciary. It violates the prin-
ciple of separation of powers. It is at odds with the judicial function
of the Federal courts as provided in Article III and it does not com-
port. with due process.
The Constitution provides in Article II, Section 3 that the Pres-
ident. is charged with the responsibility of insuring that the laws of
the United States are faithfully executed. Thus the function of con-
ducting legal proceedings on behalf of the United States cannot be
transferred to a prosecutor who is wholly independent of the execu-
tive branch. Professor Paul Bator of the Harvard Law School has
written :
The Constitution vests executive power in the President
and commands him to take “care that, the laws be faithfully
executed.” The enforcement of the Federal criminal law is a
central part of the function of executing the laws. For the
Congress or anyone else to purport to create an agency wholly
independent from the executive branch with power to enforce
the criminal law would probably be unconstitutional. N.Y.
Times, May 5, 1973.
In Ponzi v. Fessenden , 258 US. 254, 262 (1922), the Supreme
Court rules that the prosecution of offenses against the United States
is an executive function stemming from the power vested in the
President by Article II of the Constitution, the discharge of which is
committed to the Attorney General :
1174
The Attorney General is the head of the Department of J us-
tice ... He is the hand of the President in taking care that
the laws of the United States in protection of the interests
of the United States in legal proceedings and in the prosecu-
tion of offenses be faithfully executed.
Similarly, in Springer v. Philippine Islands , 277 U.S. 189, 202
(1928), the Supreme Court declared that “the authority to enforce
laws or to appoint the agents charged with the duty of enforcing
them” are executive functions. See also 2 Op. A. G. 482, 487-493
(1831).
In United States v. Cox, 342 F. 2d 167 (5th Cir.) cert, denied, 85
S. Ct. 1767 (1965), the Court of Appeals held that a United States
Attorney could not be required by a court to sign an indictment ini-
tiating the prosecution of offenses against the United States. In ad-
dressing the constitutional authority of the executive branch in the
enforcement of criminal laws, the court reiterated the principle of
Ponzi, supra , that “the Attorney General is the hand of the President
in taking care that the laws of the United States in legal proceedings
and in the prosecution of offenses, be faithfully executed.” 342 F. 2d
at 171. It then considered the role of the U.S. Attorney in discharg-
ing this executive power :
The U.S. Attorney is an executive official of the Govern-
ment, and it is as an officer of the executive department that he
exercises a discretion as to whether or not there shall be a
prosecution in a particular case. It follows, as an incident of
the constitutional separation of powers, that the courts are
not to interfere with the free exercise of the discretionary
powers of the attorneys of the United States in their control
over criminal prosecutions.
Thus, the court ruled that to transfer the power which is committed
to the executive to determine whether to prosecute to another body
(the grand jury) would be in derogation of Article II which grants
to the President all “executive power” and vests in him the respon-
sibility to take care that the laws be faithfully executed. Similarly in
Newman v. United States , 382 F. 2d 479 (D.C-. Cir. 1967) , the court
held that the lower court had no authority to review decisions of the
prosecutor and that “it is not the function of the judiciary to review
the exercise of executive discretion” 382 F. 2d at 487. Rejecting the
suggestion in a concurring opinion that “irrational” decisions might
be reviewable, the court said :
The Constitution places on the executive the duty to see that
the “laws are faithfully executed” and the responsibility must
reside with that power. Id. n. 9.
The same principle applies with equal force to prohibit transfer
of the power to prosecute offenses to an independent prosecutor or
commission outside the executive branch.
Finally, it should also be noted that the resolution authorizing the
appointment of a Special Prosecutor during the Teapot Dome scandal
provides no precedent for the appointment of Public Attorney. Prior
to the introduction of the resolution in that instance, President
Coolidge had suggested the appointment of special counsel, B. Naggel,
Teapot Dome, p. 92, and the language of the resolution itself recog-
nized the authority of the President to make the appointment. S.J.
Res. 54, February 8, 1924.
ME. LOWELL P. WEICKER, JR,
TJ.S. Senator From the State of Connectictit
A STILLNESS
In the early 1970’s, several independent events took place in the
United States of America. On the surface they appeared to lack a
common bond.
In June of 1969, a Louis Harris poll found that 25 percent of
all Americans felt they had a moral right to disregard a victim’s
cry for help. Over the next several years, this mood took the form
of countless incidents of looking the other way when men and
women were assaulted and murdered in full view of entire
neighborhoods.
On May 4, 1970, at Kent State University in Ohio, a group of
students who refused an order to disperse were fired upon by the
National Guard, killing William Schroeder, Sandy Scheuer, Jef-
frey Miller, and Allison Krause, and wounding nine others. Ten
days later, at Jackson State University in Mississippi, police who
had been called in to protect firemen from violence, opened a 28-
second fusillade into and around a dormitory, killing Phillip Gibbs
and J arnes Earl Green, and wounding 12 others.
During 1971, a decision was reached by the administration to
conduct the President’s reelection campaign with a special com-
mittee totally separate and insulated from the political party
which would renominate that President.
In early 1972, a young radio reporter in Miami stood outside a
supermarket trying to get people to sign a copy of the bill of
Rights. Seventy-five percent refused, many saying it was Com-
munist propaganda.
In February of 1972, it was revealed that International Tele-
phone & Telegraph had allegedly offered a campaign contribution
of $400,000 in return for the Justice Department dropping an
antitrust suit against ITT. The suit was dropped on Presidential
order, but when the Attorney General was questioned about the
President’s role by a Senate committee in March, he lied.
On June 17, 1972, burglars employed by the Committee to
Re-Elect the President were arrested inside the headquarters of
the Democratic National Committee with bugging equipment and
large sums of cash.
In December of 1972, having failed to obtain congressional ap-
proval for a reorganization of the Cabinet, the administration
moved autonomously to establish three or four “supersecretaries”
and to place various executive office employees in key sub-Cabinet
posts. The obvious goal was to create a White House -directed net-
work of decisionmaking and reporting quite apart from the formal
Cabinet structure which remained subject to congressional
scrutiny.
( 1175 )
1176
In February of 1973, the White House held a peace- with-honor
reception to celebrate the end of the Vietnam war. Only those
Congressmen who had supported the President’s Vietnam policies
were invited, implying that those who had questioned our involve-
ment in Vietnam were either against peace or w T ere dishonorable.
Some of these incidents were matters of life and death and were
well publicized. Others were matters of principle and were little noticed
at the time.
In each instance a significant outrage had taken place.
What was common to all ?
In each instance no one complained.
A constitutional stillness was over the land.
THE UPROAR
American decency, idealism, honesty and reverence for the Consti-
tution that some had thought bought off has been stirring and reassert-
ing itself for many months now.
Yes, a few still cry treason when questions are asked.
A few still espouse the end as j ustif y ing the means.
A few still goggle at an American title rather than the title of
American.
. But it was only yesterday, June 17, 1972 to be specific, that today’s
few were part of a large American majority.
Why the turnaround ?
The truth !
Because Frank WTlls discovered taped doors at the Watergate,
America’s doors didn’t close in all our faces.
CONSTITUTIONAL DEMOCRACY IN THE ERA
OF WATERGATE
For this Senator, Watergate is not a whodunit.
It is a documented, proven attack on laws, institutions, and prin-
ciples.
The response to that attack was and is a Nation of laws at work,
determining whether men shall prevail over the principles of a con-
stitutional democracy. It has been and will be the testing of a great
experiment in government begun some 200 years ago.
Laws, institutions, and principles were squarely before this com-
mittee, to be debated, probed and documented, in order to assert
remedies and reassert time-honored concepts. Guilt or innocence was
not an issue. This was a fact-finding body ; it was a legislative body ;
and those duties go to the heart of what Watergate was all about.
In keeping with the committee’s duties, this is a report of facts
and evidence, leading to legislative recommendations. To document the
abuse of laws, institutions, and principles, the facts and evidence are
presented, first, as they bear on the basis of our laws, the Constitution ;
second, as they relate to the institutions of our Government; and
third, as they affect the principles of our political system.
1177
I. THE CONSTITUTION
One of the most disturbing facts about the testimony presented to
this committee is that so much of it went relentlessly to the heart of
oyr Constitution.
To appreciate what happened to the Constitution, it is useful to
.divide the seven articles and 26 amendments into substantive versus
procedural provisions. The substantive sections lay out rights, pow-
ers, and duties. The procedural areas address somewhat more techni-
cal and administrative matters. The important point is that the es-
sence and strength of the Constitution springs from its substantive
areas, primarily the first three articles, the first 10 amendments and
the 14th amendment.
Evidence presented to this committee can and will demonstrate that
every major substantive part- of the Constitution was violated, abused,
and undermined during the Watergate period.
It is a record built entirely on the words of the participants them-
selves. Tragically, it focuses on the most prodigious article of the
Constitution, article II, which sets out the powers and duties of the-
Executive. It includes the most significant individual rights guaran-
teed by the first 10 amendments, our Bill of Bights. And it encom-
passes the Fifth and 14th amendments’ guarantees of due process of
law, the foundation of our system of justice.
A. The Executive
Of all the issues confronting the Constitutional Convention at Phila-
delphia, the nature of the Presidency ranked as one of the most im-
portant. Indeed, the resolution of that issue is often cited as one of the
most significant actions taken. 1
Most State constitutions prior to that time had weak executives and
strong legislatures. 2 The decision to create a President, as opposed to
plural administrators, 3 was a reluctant recognition of the advantages
of a strong executive.
Nevertheless, the convention took steps to contain presidential power.
Only after deciding the method of selecting a President, his term,
mode of removal, and powers and duties did the convention agree
to the concept of a strong President. 4
Congressional Research Service, Library of Congress, “The Constitution of the United
States of America” (1973), n. 429. Background on the Convention from C. Thach. “The
Creation of the Presidency, 1775-89” (Baltimore : 1923).
* As a result of experience with the royal governors, not only did most States have weak
executives, but the Articles of Confederation (which was the agreement by which the
National Government was functioning at the time of the Constitutional Convention)
vested all powers in a one-body Congress. C. Thach, chs. 1-3. The Virginia Plan, which was
the basis of discussion, offered a weak executive, with only power to “execute the national
law and to enjoy the Executive rights vested in Congress.” Id., ch. 4; Congressional
Research Service, p. 430.
3 It was not until the^ closing days of the Convention that there was any assurance the
executive would not be tied to the legislature, devoid of power, or headed by plural adminis-
trators. Alim ough the discussion about the executive opened on June 1, 1787, as late as
September 7, 1787, 8 days before the final Constitution was ordered printed, the Conven-
® ow ?. a proposal for an executive council that would participate in the exercise
^New Haven 6,0 l^S?) 8 SJl^d “The Records of the Federal Convention of 1787”
4 The eventual basis of article’ll was the New York Constitution. On June 1, 1787, James
mison moved that the Executive should be one person. A vote on the Wilson motion was put
untli * e other attributes of the office had been decided. The decision resulted largely
from experience with the Articles of Confederation “that harm was to be feared as much
u hfettered legislature as from an uncurbed Executive and that many advantages of
strong Executive could not be conferred on the legislative body.” Congres-
sional Research Service, p. 430.
1178
This bit of history, indicating- that the delineation of the Presi-
dent’s office and powers preceded the creation of his position in the
constitutional scheme, is quite important. It demonstrates that Execu-
tive power is to be exercised within the framework of the Constitution,
and particularly, within the guidelines of article II, which lays
out the powers and duties of that office.
This is much of what Watergate is all about, and it bears a close
look at article II.
The issue at stake is the exercise of potentially awesome Presidential
power. As to that issue, article II contains two points of significance . 5
First, its opening words state: “The executive Power shall be vested
in a President of the United States of America.” 0 This grant of Exec-
utive authority, with no words of limitation, has, from the time of
Jefferson, been the basis for expanding the Presidential office and
activities . 7
However, the initial broad authority is offset by a second significant
factor, the enumeration of Executive powers later in article II . 8 These
declare in part that the President is to be Commander-in-Chief, make
treaties, appoint ambassadors and other officers, grant pardons, and
take care that the laws are faithfully executed.
It is worth noting that experience has eventually placed limits on
the general powers. The President has been allowed, as a practical
matter, to exercise those additional powers that fall naturally within
his range of activities . 9
The important point, however, is that no President has been, or can
be, allowed to conduct the executive branch in conflict with the Con-
stitution taken as a whole, and certainly not in conflict with express
sections of the Constitution, such as the Bill of Rights, or article I (the
legislature) , or article III (the judiciary) . This then is the proper con-
text for examining facts.
Article II of the Constitution, by which the Presidency was created,
was violated from beginning to end by Watergate.
There is massive evidence of misuse of the awesome general powers
that reside in the executive department.
There is equal evidence documenting abuses of the enumerated
duties.
1. GENERAL POWERS AND DUTIES
The facts show an executive office that approved a master intelli-
gence plan containing proposals that were specifically identified as
illegal , 10 that proposed setting up a private intelligence firm with a
5 According to Alexander Hamilton, “The second article of the Constitution of the
United States, section first, establishes this general proposition that ‘the Executive power
shall he vested in a President of the United States of America.’ That same article in a
succeeding section, proceeds to delineate particular cases of executive power.” 32 “Writings
of George Washington.” J. Fitzpatrick ed. (Washington : 1939) 430 ; 7 “Works of Alexander
Hamilton,” ,T. C. Hamilton ed. (New York : 1851) 76.
8 U.S. Constitution, art. II, sec. 1.
7 The practice of expanding Presidential powers has continued steadily, but was
irrevocably set when the “Strict constructionists” came to power in 1801 and did not curb
Executive power, but rather enlarged it. The modern theory of Presidential power was
conceived by Hamilton, but it is interesting to note his qualification “that the executive
power of the Nation is vested in the President ; subject only to the exceptions and
qualifications, which are expressed in the instrument.” 7 “Works of Alexander Hamilton,”
80-81 : see Congressional Research Service, 433 and 437.
8 TJ.S. Constitution, art. II, secs. 2-4.
0 See note 7. supra.
w See exhibit 35, 3 Hearings 1319. This is a plan submitted by Tom Charles Huston to
the President and approved in July 1970. Presidential statement, May 22, 1973. Pt. D,
entitled “Surreptitious Entry,” reads : “Use of this technique is clearly illegal : It amounts
to burglary.” Id. at 1321.
1179
“black bag” or breaking and entering capability as secret investigative
support for the White House, 11 that set up its own secret police, 12
that used its clandestine police force to violate the rights of American
citizens, 13 that hired a private eye to spy on its enemies, including their
personal lives, domestic problems, drinking habits, social activities
and sexual habits. 14
That circulated an enemies list, 15 that developed plans to “use the
available Federal machinery to screw our political enemies, 16 that
knew of an illegal break-in connected with the Ellsberg case and con-
cealed that fact rather than report it to appropriate authorities, 17
that used a Presidential increase in milk support prices to get $5,000
from the milk producers to pay for the Ellsberg break-in, 18 that
recruited persons for that break-in on the false pretense of national
security, 19 that offered the presiding judge in the Ellsberg trial the
FBI Directorship at a clandestine meeting in the midst of the trial, 20
that ordered a warrantless wiretap on a news columnist’s telephone, 21
that wiretapped 17 newsmen and government officials in an operation
that was outside proper investigative channels. 22
That suggested firebombing the Brookings Institute, 23 that, set up
an Intelligence Evaluation Committee outside the legitimate intelli-
gence community to disseminate information that should have been
restricted to individual agencies, 24 that used the Secret Service to
wiretap the President’s brother, 25 that kept $350,000 in left-over 1968
campaign funds in a safe in the Chief of Staff’s office, 26 that used most
of those funds as hush money for the Watergate burglars, 27 that ap-
proved a large contribution from the milk producers association after
being told it was meant to gain access to and favors from the White
House. 28
11 Operation Sandwedge, drawn up by John Caulfield in late 1971, to infiltrate campaign
organizations, with a “black bag” capability, “surveillance of Democratic primaries, and
“derogatory information investigative capability, worldwide.” See exhibit 7. p. 240, Cam-
paign Practices, supra.
. 12 See “The Intelligence Community,” infra (discussion of the establishment and func-
tions of the secret so-called Plumbers unit in the White House).
13 On June 21. 1974. Mr. Charles Colson was sentenced to 1 to 3 years in iail for. among
other things, activities of the Plumbers “to influence, obstruct, and impede the conduct and
outcome of the criminal prosecution of Daniel Ellsberg.”
34 See the list of investigations by Anthony Ulasewicz, “The Intelligence Community,”
infra ; see also Ulasewicz testimony, 6 Hearings 2219-2277.
15 See exhibits 44, 43-65, 4 Hearings 1682, 1689-1734.
See exhibit 48. 4 Hearings 1689.
17 When the prosecutors finally learned of the break-in 18 months after it occurred, they
were told by the President, “you stay out of that,” even though it was a crime for which at
least one defendant has been convicted, 9 Hearings 3631.
18 Ellsberg Break-in Grand Jury Proceedings, 652-656.
19 Testimony of Bernard Barker, 1 Hearings 358.
20 Testimony of John Ehrlichman, 6 Hearings 2617-19.
21 At Ehrlichman’s instructions. Caulfield had John Regan tap columnist Joseph Kraft’s
home telephone. John Caulfield executive session, Mar. 16. 1974.
See testimony of Robert Mardian, 6 Hearings 2392-93; John Ehrlichman, 6 Hearings
2529 : and John Dean. 3 Hearings 920.
Caulfield executive session, Mar. 23, 1974; testimony of John Dean, 3 Hearings
24 Notwithstanding the fact that the statutes prohibit the CIA from participating in
any domestic intelligence function, they were called upon to evaluate domestic intelligence-
gathering by other agencies, when the Intelligence Evaluation Committee was set up.
Testimony of John Dean, 4 Hearings 1457.
2 5 In a press conference on Nov. 17, 1973, the President stated: “The Secret Service did
maintain a surveillance. They did so for security reasons, and I will not go beyond that.
They were very good reasons, and my brother was aware of it,”
3 Testimony °*- Haldeman, 7 Hearing s 2879 ; Gordon Strachan, 6 Hearings 2442,
2461 .
27 Testimony of Fred LaRue. 6 Hearings 2343.
28 Mr. Kalmbaeh testified that he reported the original milk producers’ contribution, and
their request in return for 90 percent parity, a Presidential address at their Convention,
and a I residential audience, to Messrs. Ehrlichman, Flanigan, Gleason, and Dent. Herbert
Kalmbaeh, executive session.
1180
That received and passed on information about an IRS audit of
one of the President’s friends , 29 that arranged for a tax attorney for the
friend , 30 that contacted the IRS as well as the J ustice Department in
a number of other tax cases involving friends of the President , 31 that
planned and possibly carried out a break-in at the office of a Las
Vegas publisher , 32 that suggested a break-in at the apartment of the
man who attempted to assassinate Governor Wallace , 33 that contem-
plated a break-in at the Potomac Associates offices , 34 that tried to
rewrite history by making up bogus State Department cables to falsely
connect the Kennedy administration with the assassination of Presi-
dent Diem , 35 that attempted to get reporter William Lambert to use
the phony cables in a story , 36 that tried to plant false stories con-
necting the President’s opponent with communist money and the
crimes alleged in the Ellsberg case . 37
That installed an elaborate system of taping conversations between
the President and his staff or visitors , 38 that told Federal investigators
to stay out of the Ellsberg matter , 39 that undertook a clandestine op-
eration to hide a key witness in the ITT case in a Denver hospital
where she was interrogated by Howard Hunt in disguise . 40 that au-
thorized and funded from within the White House a dirty tricks
operation including scurrilous literature, late night telephone cam-
paigns and advertising designed to offend local interests, seemingly
sponsored by Democratic candidates, and physical disruptions di-
rected against, Presidential opponents . 41 that planted spies, hecklers,
and pickets in the Muskie and Humphrey campaigns , 42 that partici-
pated in discussions of a campaign against Democrats to include pros-
titutes, mugging, kidnapping, bugging, and burglary . 43
That pressed for adoption of Liddy’s Watergate plan , 44 that was told
of the authorization and budget for Liddy’s plan , 45 that believed it
had received transcripts of illegal wiretaps and never reported that
29 Gen Alexander Hals White House Chief of Staff, was called by William Simon of the
Treasury Department and told that Mr. Rebozo was to be audited. General Haig met with
White House attorneys on the matter, resulting In a decision to tell the President and
volunteer to use the White House attorneys to find a tax lawyer for Mr. Rebozo. Gen.
Alexander Haig, executive session.
30 Id.
ai This help was extended to Dr. Kenneth Riland, testimony of John Dean, 4 Hearings
1530 1559 It also went to the Rev. Billy Graham and actor John Wayne. Id., at 1529-1530.
32 Testimony of Howard Hunt, 9 Hearings 3687. See also, transcripts of Presidential
conversations. 00
33 Testimonv of Howard Hunt, executive session. July 25, 1973. pp. 129-33.
84 A White House memo, dated July 6, 1971. from John Caulfield to John Dean, stated :
“Building appears to have good security with guard present in lobby during day and
evening hours. However, a penetration is deemed possible if required.”
^Testimony of Howard Hunt, 9 Hearings 3732.
38 Id., at. 3672. , ' ., iu
37 Exhibit 194, 10 Hearings 4259 (a memo from Pat Buchanan recommending, the Ells-
berg connection, tying McGovern to him and his crime — as soon as the indictment comes
down.”) A Dean to Haldeman memo stated, “We need to get our people to put out the
story on the foreign or Communist money that was used in support of demonstrations
against the President in 1972. We should tie all 1972 demonstrations to McGovern. . .
See 8 Hearings 3171.
38 Testimony of Alexander Butterfield, 5 Hearings 2074.
39 Testimony of Henry Petersen, 9 Hearings 3631.
40 Testimony of Robert Mardian, 6 Hearings. 2359 ; testimony of Howard Hunt, 9 Hearings
3752—53.
41 See the Electoral Process, infra (description of the Segretti operation).
43 See executive session, Herbert Porter, Apr. 2, 1973 (the activities of Sedan Chair I
and Sedan Chair II).
43 Testimony of John Mitchell. 5 Hearings 1610.
44 Testimony of Jeb Magruder, 2 Hearings 835. (Phone call by Mr. Colson to Mr.
Magruder, to “get on the stick and get the Biddy project approved so we can get the
information from O’Brien.”)
45 For example, on Mar. 30. 1972, a few days after the Biddy plan was allegedly approved,
a memo from Straehnn to Haldeman reported, “Magruder reports that 1701 (CRP) now has
a sophisticated political intelligence gathering system with a budget of 300.” Testimony of
Gordon Strachan, 6 Hearings 2441. An Apr. 4, 1972. talking paper for a meeting between
Mitchell and Haldeman included the intelligence plan and its $300,000 budget. Id., at
2454.
1181
crime, 46 that was warned of the planned break-in at the Watergate and
did nothing to stop it, 47 that knew the full scope of Liddy’s activities
shortly after the Watergate arrests and kept those facts from proper
authorities, 48 that shredded Watergate evidence in the Chief of Staff’s
files, 49 that tried to use one of its executive branch agencies as a “cover”
for the Watergate operation. 50
That was the scene of meetings at which high officials plotted to use
the power and influence of the Presidency to cover up crimes and ob-
struct justice, 51 that saw advisers invoke the power of the Presidency
to use an FBI Director in ways that would eventually cause him to
resign, 52 that used the President’s fundraising powers to collect illegal
corporate contributions, 53 to raise funds to finance a crime, 54 and to col-
lect bribes for a criminal case. 55
That discussed using the President’s clemency prerogatives as early
as July 1972, to keep the lid on Watergate and other crimes, while mis-
leading the American people by calling Watergate a third-rate bur-
glary, 56 that made offers of clemency for improper purposes, 57 that
announced, in a Presidential statement, a Dean investigation clearing
the White House, when there had in fact been a coverup not an investi-
gation and the President had never, ever talked to Dean about Water-
gate, 58 that discussed, in the oval office, unethical out-of-court contacts
with the presiding judge in one of the Watergate civil suits, 59 that
purposely lied to the FBI and a Federal grand jury, 60 that encouraged
46 Mr. Strachan testified, “I did not tell Mr. Dean that I had, in fact, destroyed wiretap
logs, because I was not then sure what they were, I only had suspicions.” Testimony of
Gordon Strachan, 6 Hearings 2442. Mr. Strachan also had access to all the Watergate wire-
tap transcripts. Testimony of Jeb Magruder, 2 Hearings 827.
47 Mr. Strachan, according to Mr. Magruder, was as -well briefed, on the evening of
.Tune 16, 1972, on the intelligence operation (including the plan for a second break-in on
June 17) as anybody at the Committee To Re-Elect. Testimony of Jeb Magruder, 2 Hearings
827.
48 The White House counsel, among others, was fully briefed by Liddy himself 3 days
after the break-in, and given the full story of Liddy’s Plumbers’ activities as well. Testi-
mony of John Dean, 3 Hearings 933.
40 Testimony of Gordon Strachan, 6 Hearings 2458.
50 Both Mr. Helms and General Walters of the CIA testified that at a meeting on
June 23, 1972, with Mr. Haldeman and Mr. Elirlichman, they were instructed to use the
CIA to interfere with the FBI investigation of Watergate. Testimony of Richard Helms,
8 Hearings 3238 ; testimony of General Vernon Walters, 9 Hearings 3405.
51 As soon as Mr. Dean returned to Washington after the break-in, he began meeting with
White House officials, such as his meetings on .Tune 19. 1972, with Messrs. Ehrlichman,
Colson, and others to discuss how to handle Liddy and the contents of Hunt’s safe. Testi-
mony of John Dean, 3 Hearings 934.
52 Patrick Gray testified that he took the Hunt files and destroyed them because the
order came from “the counsel to the President of the United States issued in the presence
of one of the two top assistants to the President of the United States.” Testimony of
Patrick Gray, 9 Hearings 3467.
53 See testimony of eight corporate executives convicted of illegal corporate contribu-
tions. Nov. 13-15, 1973 : 13 Hearings.
34 Not only was the Ellsberg break-in financed by milk producers’ money {see note 18,
supra), but the Watergate break-in was financed by money from the Committee To
Re-Elect. Testimony of Hugh Sloan, 2 Hearings 539 ; testimony of Maurice Stans, 2 Hear-
ings 795.
55 Mr. Kalmbach was asked to raise funds for the Watergate burglars. Testimony of
John Dean, 3 Hearings 950 ; confirmed by Transcripts of Presidential Conversations,
4pr. 14. 1973, p. 494.
50 Presidential statement of Aug. 15, 1973, p. 3 ; testimony of John Ehrlichman, 7 Hear-
ings 2848—49.
57 On at least three occasions Watergate defendant James McCord received offers of
executive clemency if he would remain silent and plead guilty. Testimony of James McCord,
1 Hearings 131, 132, 135, 139-141.
f 8 Testimony of John Dean, 3 Hearings 955.
39 Testimony of John Dean, 3 Hearings 958. “He (Judge Ritchie) has made several
entrees off the bench — one to Kleindienst and one to Roemer McPhee to keep Roemer
abreast of what his thinking is. He told Roemer that he thought Maury (Maurice Stans)
ought to file a libel action.” Transcripts of Presidential Conversations, Sept. 15, 1972, p. 60.
00 Herbert L. Porter pleaded guilty, on Jan. 28, 1974, to one count of making false state-
ments to FBI agents. Gordon Strachan testified that he was expressly asked to do some-
thing he knew 7 was improper related to his grand jury testimony of Apr. 1973. Testimony of
Gordon Strachan, 6 Hearings 2443. See also testimony of Jeb Stuart Magruder, 2 Hearings
801, 802, 804, 831-832.
1182
campaign officials to commit perjury and plead the fifth amendment to
obstruct justice . 61
That used the President’s personal attorney and White House staff
to pay criminal hush money , 62 and to pay for a private eye operating
out of the White House , 63 that used its influence to get raw FBI files
for improper purposes , 64 that prevailed upon the FBI not to interview
certain witnesses , 65 that used patriotic concern for the Presidency to
pressure defendants to plead guilty in a criminal case . 66
That used its influence to get special treatment for high officials
before a Federal grand jury , 67 that plotted to cover up the Segretti
story and denounced in the harshest terms those who uncovered the
story , 68 that noted “it would assuredly be psychologically satisfying
to cut the innards from Ellsberg and his clique,” 69 that obstructed
congressional investigations of Watergate and related matters , 70 that
filed Watergate countersuits for the distorted purposes of using sub-
pena powers to delve into the financial and sexual activities of political
opponents , 71 that made numerous misleading or false statements about
Watergate to the American people . 72
That failed to promptly inform proper authorities about knowl-
edge of crimes involving White House officials , 73 that forced the
resignation of a Special Prosecutor, Attorney General, and Deputy
Attorney General when their Watergate prosecution took an inde-
pendent position , 74 that suggested using the Attorney General’s
powers to keep a Republican opponent off the primary ballot in
81 Dean attempted to get Sloan’s lawyers to have Sloan take the fifth amendment. Testi-
mony of Hugh Sloan. 2 Hearings 585. 586. Herbert Porter testified that he was asked to
perjure himself by Magruder concerning the amount given Liddy — asked to say he gave
$100,000 to nay surrogates. Porter* subsequently, perjured himself to the grand jury and
in the trial. Testimony of Herbert L. Porter, 2 Hearings 635-637.
63 Testimony of John Dean, 3 Hearings 950. Kalmbach recollected that Dean stressed
secreev with respect to raising funds for the defendants, that he made a very strong point
that there was absolute secrecy required, confidentiality, indicating that if this became
known, it might jeopardize the campaign and cause misinterpretation. Testimony of
Herbert Kalmbach, 5 Hearings 2098. t ,,
03 Mr. Caulfield worked on his intelligence project with Mr. Ehrlichman and Mr.
Kalmbach. He hired Mr. Ulasewicz on July 9. 1969, who was paid on a monthly basis
through the Kalmbach law firm. Testimony of John Caulfield. 1 Hearings 251.
64 Testimony of John Dean, 3 Hearings 944-945. Testimony of L. Patrick Gray, 9 Hear-
ings 3479. ... ... . . , .
as At the request of Mr. Dean. Mr. Gray held up FBI interviews with such valuable
witnesses as Mr. Dahlber. Mr. Ogarrio. and Kathleen Chenow. On June 28, Dean requested
Gray to hold up an interview with Kathleen Chenow on grounds of national security. Testi-
mony of L. Patrick Gray, 9 Hearings 3455.
00 Testimony of Bernard L. Barker, 1 Hearings 358. .
67 Petersen testified that he received a telephone call from Ehrlichman asking that Mr.
Stans be excused from going to the grand iur.v and telling Petersen to stop harassing Stans.
Testimony of Henry Petersen. 9 Hearings 3618.
08 Testimony of Clark MacGregor, 12 Hearings 5019. „ .
89 Memorandum of Julv 8. 1971. from Patrick L. Buchanan to John Ehrlichman.
70 Mr. Mitchell testified that there were many discussions of preventing the House Bank-
ing and Currency Committee hearings from getting off the ground, including possible use of
assistance from the Justice Department. Testimony of John Mitchell, 5 Hearings 1897. The
Lacosta meetings, which discussed the use of executive privilege to prevent testimony of
people from the White House, could well be concluded to evidence an intention to prevent
the facts from becoming known, according to Mr. Dean. Testimony of John Dean, 4 Hear-
ings 1460.
71 Testimony of John Dean, 3 Hearings 957.
73 For example, a meeting on Oct. 15, 1972. at the White House, with Ehrlichman, Ziegler.
Buchanan, Moore, Chapin, and Dean was held to prepare a press response to Segretti
stories. It was decided to attack and deny the stories, even though an intense investigation
within the White House had already established the basic truth of the stories. The same
denial was issued again in succeeding months. Testimony of John Dean, 3 Hearings 1202,
1206. and 1209 ; notes of the meetings, 3 Hearings 1200.
73 Aside from the coverup in general, the President claims to have learned of crimes
on Mar. 21, 1973, but did not tell the prosecutors about this evidence until they came to him
on Apr. 15, 1973. Testimony of Richard Kleindienst, 9 Hearings 3579-80 ; testimony of
Henrv Petersen, 9 Hearings 3628. _ _ ,
74 On Oct. 20, 1973, Attorney General Richardson and Assistant Attorney General Ruckels-
haus resigned in response to the President’s demand that they fire Special Prosecutor Cox,
who wanted to appeal a court decision involving Watergate evidence to the Supreme Court.
See also executive session of Gen. Alexander Haig.
1183
Florida, 75 that used the Executive’s authority over the media’s regu-
latory agencies to intimidate the media, 76 that ordered a personal tax
audit, surveillance by an FBI agent and Secret Service agents, and
an antitrust action, all in response to a newspaper article about one
of the President’s friends. 77
That tried to punish foundations with views different than White
House policy by pressuring the IRS to review' their tax-exempt sta-
tus, 78 that set up a program to insure that Government contracts,
grants, and loans would, as a matter of Government policy, be political
rewards, 79 that treated the Presidential pardon as a political tool, 80
that used its power over the tax-collection agency to gather intelli-
gence on and harass political opponents, 81 that issued instructions to
hire a shaggy person with a McGovern button, to sit in front of the
White House, and counter demonstrators at the funeral of J. Edgar
Hoover, 82 that infiltrated a Quaker vigil in front of the White House, 83
that used the agency that is supposed to guard the President to spy on
the President’s political opponent, 84 that ordered 24-hour surveillance
of a political opponent, 85 that used the departments to dredge up
potentially embarrassing information on Presidential contenders, and
then leaked it to the press, 86 that used White House influence to obtain
CIA equipment for the Ellsberg break-in, 87 that used its entrustment
with our national security to convince four Cubans to burglarize a
political party. 88
That ordered an FBI investigation of an unfriendly newsman to
harass him, 89 that proposed leaking confidential FBI files to embarrass
the producer of a satirical movie, 00 that used its control of important
70 Memo to the Attorney General from Mr. Magruder, Aug. 11, 1971 : “Pat Buchanan
suggested that maybe we could have the Florida State chairman do whatever he can
under this law to keep McCloskey (Representative McCloskey, Republican-California) off
the ballot.” Exhibit 177, 10 Hearings 4194.
70 Memo from Charles Colson to H. R. Haldeman, Sept. 25, 1970, recommending that he
pursue with Dean Burch the possibility of an interpretive ruling by the FCC . . . this
point could be very favorably clarified and it would, of course, have an inhibiting impact
on the networks. . . .”
77 When the newspaper Newsday decided to run an in-depth article on Mr. Rebozo, the
reporter writing the story was audited at White House request, an FBI agent investigated
the newspaper’s offices, an antitrust suit was recommended, and the Secret Service inves-
tigated the reporters’ activities while they w r ere waiting the story. Testimony of Senator
Lowell P. Weicker, hearings on “Warrantless Wiretapping and Electronic Surveillance,”
Apr. 8. 1974 (exhibit 7).
7 ® Memo to the President from Patrick Buchanan, Mar. 3, 1970. 10 Hearings 4114.
7 Memo from Fred Malek to H. R. Haldeman, Mar. 17, 1972, entitled “Increasing the Re-
sponsiveness of the Executive Branch.”
For example, a request that a prominent Jewish figure in Florida be pardoned for
political benefit. In a memo to John Dean, Charles Colson recommends, “If there is any-
thing we can do properly. w r e should . . . this has to be handled with extreme care.” Testi-
mony of Senator Lowell P. Weicker, hearings on “Warrantless Wiretapping and Electronic
Surveillance,” Apr. 8. 1974. The pardon was granted and a $30,000 contribution followed.
Interview' with Calvin Kovens, Oct. 25. 1973.
81 See exhibit 44, 4 Hearings 1682, 1694, 1695.
82 Testimony of Robert Reisner, 2 Hearings 500. 512.
83 Interview with .Teb Magruder, Aug. 8, 1973.
®*- White House memo from Steve Karalekas to Charles Colson, Aug. 16, 1972,
r^ferrins: to the activities of agent Bolton. See also testimony of John Dean. 3 Hearings
as w r as my understanding based on my discussion w T ith John Dean, that there was to
c? 4 ~* 10lir on Senator Kennedy.” Testimony of Gordon Strachan, 6 Hearings 2492.
80 See memo from Fred Malek to H. R. Haldeman, entitled “Increasing the Responsive-
ness of the Executive Branch.” dated Mar. 17, 1972.
, July 7, 1971, John Ehrlichman called General Cushman. Deputy Director of the
+7T'7’ 1° nsr ° assistance to Howard Hunt for disguise purposes. Hunt told Cushman
tnat he (Hunt) had beeen charged with a “sensitive mission” bv the White House to
interview a person whose ideology he w 7 as not certain of.” Testimony off Gen. Robert
Cushman, Jr., 8 Hearings 3290-92.
88 Testimony of Bernard Barker. 1 Hearings 358.
JJMr. Haldeman ordered an investigation of newsman Daniel Schorr. 4 Hearings 1490.
"Memo from John Caulfield to John Dean, dated June 25, 1971. subject: Emile de
£ n J 0 S!°l P r< ]du ce r of “Millhouse” ; New Yorker Films, Inc. : and Daniel Talbot, film
aistriDutor. I recommend that it is time to move on the above firm and individuals,
as follows: (A) Release of de Antonio’s FBI derogatory background to friendly media
and (B) discreet IRS audits of New Yorker Films, Inc., de Antonio and Talbot.”
35-fiR7 O - 74 - 7fi
1184
Watergate evidence and the privilege known as executive privilege
to aid those supporting the President and to deprive or delay those
in opposition, 91 that made plans to eliminate professionals in gov-
ernment service who placed their professional responsibilities above
questionable White House political demands, 92 that participated ac-
tively and formally in a campaign organization while drawing White
House stalf salaries, 93 that ran secret letter-writing campaigns
against Republican Senators, and that generally emasculated the Re-
publican Party. 94
That ... all of that . . . violated the concept of executive power
in article II of the Constitution. Extensive as the record is, it repre-
sents only selected examples.
The important point is that it is certainly not what our Founding
Fathers had in mind when they envisioned the Presidency.
2. ENUMERATED POWERS AND DUTIES
The enumerated powers and duties of the President’s office are set
forth beginning with section 2 of article II. That section grants the
President direct power over Cabinet officers. 95 Much testimony before
this committee demonstrated how those officers were used on behalf of
the President’s office.
For example, an Attorney General, for a significant period of time,
ran the President’s reelection campaign while still in office at the
Justice Department. 96 His reason for this role was that, “it is very,
very difficult to turn down a request by the President of the United
States,” 97 even though the Attorney General himself later testified
that, he felt such a role in politics while still in office was wrong. 98
As an illustration of the extent of that role, memos from CRP, such as
one entitled “Grantsmanship,” suggesting an effective method of “in-
suring that political considerations” be used in Federal programs,” 99
were sent to the Attorney General from May 1, 1971, onward." 6 At
one point, it was even suggested that the Attorney General wield the
power of his office to keep a Republican contender off the primary
ballot in Florida. 1 That campaign role also included an extraordinary
meeting in the Attorney General’s very office, to review plans for
bugging, mugging, burglary, prostitution, and kidnaping. 2
Another Attorney General was placed in the awkward position of
being asked immediately after the Watergate break-in to help get Mr.
McCord out of jail before he was identified. He was soon thereafter
warned of White House concern with a too aggressive FBI investi-
gation. 3 He was then asked to provide raw FBI Watergate files, im-
01 Mr. Haldeman testified that he had access to various tapes of Presidential conversa-
tions. (See 8 Hearings 3050-51) : compare with testimony of John Dean, 4 Hearings 1503.
93 See exhibit 44, 4 Hearings 1682.
93 Testimony of Robert Odle ; “those people who were at the White House had in-
fluence over the (Committee for the Re-Election of the President), they gave it direc-
tion. they assisted it.” See 1 Hearings 23.
94 See the Party Process, supra.
95 IJ.S. Constitution, art. II, sec. 2.
oa Mr. Mitchell testified that he “had frequent meetings with individuals (from CRP)
dealing with matters of policy,” before he resigned as Attorney General. Testimony of
John Mitchell, 5 Hearings 1653.
97 Testimony of John Mitchell, 5 Hearings 1859.
99 Id.
99 Exhibit 1, 1 Hearings 449.
" a See testimony of Robert C. Odle, 1 Hearings 40-41.
1 See note 75, p. 1183.
2 Testimony of John Mitchell. 5 Hearings. 1610.
3 Testimony of John Dean, 3 Hearings 936.
1185
properly, to the White House. That same Attorney General was later
used as a secret contact with this committee’s investigation of Water-
gate, and was then removed from office in an apparent connection with
the Watergate affair. 4 He eventually became the first Attorney General
in history convicted of a crime, for his testimony about Presidential
interference in an antitrust case involving a major contributor. 5
A third Attorney General was forced to resign his office when he
backed the special prosecutor’s procedure for obtaining Watergate
evidence from the White House. 6
An Assistant Attorney General was also asked to provide raw FBI
Watergate files, again improperly, to the White House, 7 and was later
told by the President not to investigate the Ellsberg break-in. 8 A
Deputy Attorney General was forced to resign when he backed the
special prosecutor’s decisions in the Watergate case. 9 An Assistant
Attorney General gave confidential Justice Department and FBI intel-
ligence information to the President’s reelection campaign, at the
direction of the White House. 10
Three Attorneys General, a Deputy Attorney General, and two As-
sistant Attorneys General. And all this was done on behalf of the
Presidency, which has a constitutional responsibility to “take Care
that the Laws be faithfully executed.” 11
With respect to other Cabinet officers, a Secretary of Commerce with
all the authority as to corporate affairs that goes with that- position,
was placed in charge of raising funds for the President’s reelection,
including, as it turns out, a number of illegal corporate contributions. 12
A Secretary of Treasury met with a milk producers association and
supported their request for higher price supports. After the President
granted higher support prices, the milk producers arranged for him to
be offered at least $10,000 in cash for his personal use, a transaction
for which he has been criminally indicted. He later aided them in tax
and antitrust matters at a time when a large contribution to the Presi-
dent from the milk producers was being arranged. 13
The Commissioner of the Internal Revenue Service was criticized
because “practically every effort to proceed in sensitive areas is met
with resistance, delay, and the threat of derogatory exposure.” 14 The
Director of the CIA, according to his own testimony and that of his
assistant, was called to the White House and asked to use the CIA to
cover up Watergate. 15 The Acting Director of the FBI was brought
to the White House and given material from the safe of one of the
Watergate burglars, to keep it hidden, an act which resulted in his
4 See testimony of Richard G. Kleindienst, 9 Hearings 3597.
5 Richard G. Kleindienst pleaded guilty, on May 16, 1974, to one count of refusing to
testify about ITT ; sentenced June 7, 1974 to 1 month unsupervised' probation.
0 On Oct. 20, 1973. Attorney General Richardson resigned in a dispute with the President
over the firing of special prosecutor, Archibald Cox.
7 Testimony of John Dean, 3 Hearings 944-45.
8 Testimony of Henry Petersen, 9 Hearings 3631.
9 On Oct. 20, 1973, Assistant Attorney General William Ruckelshaus resigned in re-
sponse to the President’s request to fire special prosecutor Archibald Cox.
10 With the approval of the Attorney General John Mitchell. Mr. McCord testified that
he received information, on a daily basis, from the Internal Security Division of the Justice
Department, which information included FBI data and data on individuals of both a
political and nonpolitical nature. Testimony of James McCord, 1 Hearings 178-83.
11 TJ.S. Constitution, art. II, sec. 3.
12 Testimony of Maurice H. Stans, 2 Hearings 734.
13 See Milk Fund Investigation, supra.
14 Transcripts of Presidential Conversations, Sept. 15, 1972.
15 Testimony of Richard Helms, 8 Hearings 3238. Testimony of Lt. Gen. Yernon Walters,
9 Hearings 3405.
1186
eventual resignation. 16 That same Acting Director turned over raw
FBI files on Watergate to the White House, 17 perhaps illegally, 18 when
assured it was at the President’s request, 19 which request the Presi-
dent has confirmed in public statements. 20 He was rewarded by being
left to “twist slowly, slowly in the wind” 21 while his nomination to
permanent Director was pending before the Senate, even though the
President had reportedly already abandoned him. 22
This is how the officers in the departments and agencies were used
by the White House, and it is clear that those activities did not pertain
to “any subject relating to the Duties of their respective offices,” 23 as
the Constitution requires in its grant of Presidential authority in this
area.
Immediately following the section in article II granting authority
over departments and agencies, is a section giving the President the
“power to grant Reprieves and Pardons for Offenses against the
United States.” 24
There is undisputed testimony that defendants in the Watergate
criminal case were offered clemency in exchange for their silence. 25
Aside from the issue as to who authorized the officers, they were par-
ticularly firm in the case of one defendant who was apparently ignor-
ing the game plan. 26 It must be recalled that only the President can
grant clemency, and that by his own admission he discussed clemency
as early as July 1972, when Watergate was being described as only a
“third-rate burglary.”
There is the well-documented case of a request from a former Sena-
tor, and close friend of the President, for a pardon on behalf of a
prominent Jewish figure in Florida, because of the political advantage
that would follow. 27 That pardon was granted. The beneficiary then
gave the President’s campaign $30,000. 28
Article II also gives the Executive the power to appoint ambassa-
dors. Whereas this has often been a source of political reward, there
is substantial evidence of an unusually well-organized and enforced
program of ambassadorships for sale, in return for specific support
in the 1972 Presidential campaign. 29
Along with appointive power for ambassadors, the Executive has
appointive power over lesser “Officers of the United States.” 30 This
power was used, for example, as a reward for at least one participant
in Watergate, who received a prominent position in the Department of
16 Testimony of L. Patrick Gray, 9 Hearings 3467. Testimony of John Ehrlichman,
7 Hearings 2674.
17 Testimony of John Dean, 3 Hearings 945.
18 John Dean pleaded guilty to an “information” charge that included a conspiracy to
obtain FBI Watergate files. ( United States v. Dean, D.D.C., No. 886-73).
19 See testimony of L. Patrick Gray. 9 Hearings 3479-81.
20 Presidential statements of Mar. 2, 1973, Apr. 5. 1973, and Oct. 19, 1973.
21 Testimony of John Ehrlichman, 7 Hearings 2679.
23 See Exhibit 102, 7 Hearings 2950.
23 TJ.S. Constitution, art. II, sec. 2.
24 ibid.
25 McCord testified that Mr. Caulfield assured him of executive clemency, support for the
family and rehabilitation after prison on numerous occasions. Testimony of James McCord,
1 Hearings 131.
26 On Jan. 13, 1973, Mr. McCord met Mr. Caulfield and another message was con-
veyed as to clemency, along with statements that the President’s ability to govern was at
stake, another Teapot Dome scandal was possible, the government may fall, and everybody
else was on the track but McCord, who was following the game plan, and who should get
“closer to your attorney” and keep silent. Testimony of James McCord. 1 Hearings 139-40.
27 See testimony of Senator Lowell P. Weiclcer, Jr. Hearings on Warrantless Wiretapping
and Electronic Surveillance, pp. 151-55.
28 Interview with Calvin Kovens. Oct. 2i5. 1973.
29 See, use of the incumbency — -Responsiveness Program, supra.
30 U.S. Constitution, art. II, sec. 2.
1187
Commerce, 31 Another CRP official in charge of certain spy activities
pointedly reminded the White House of the work he had done when
he applied for employment after the election. 32 Plans were also drawn
up to use this appointive power in the President’s second term to get
rid of officials, across the board, who rightfully placed their profes-
sional responsibilities in the way of White House political demands. 33
These enumerated powers and duties of the executive are followed
with the duty to “take Care that the Laws be faithfully executed.” 34
Evidence was presented to this committee of a break-in by a White
House unit, which break-in contributed to a mistrial in a major national
security case, the Ellsberg case. Illegal use of wiretaps and agent pro-
vocateurs by the administration was the direct cause of mistrials or
dismissals in most major conspiracy cases brought by the Federal Gov-
ernment during this same period. 35
This was an executive branch that conspired to present perjury, lie
to the FBI, and pay for the silence of key witnesses in the Watergate
case. This was the Executive that knew of a break-in related to the
Ellsberg case and failed to take any action or report that fact. 36 This
was the Executive that told an Assistant Attorney General not to in-
vestigate the Ellsberg matter. 37 This was the administration that
learned of the Watergate planning sessions, budget approval, that
received illegal wiretap transcripts, and covered up or failed to
promptly report White House involvement in Watergate as those facts
became known.
This is the White House that pressured the IRS, the Antitrust Divi-
sion of Justice, the CIA, the FBI, the Secret Service, and the FCC to
enforce laws not “faithfully,” but “selectively.” 38
This is the same White House in which the President said in a
conversation with John Dean on September 15, 1972, “We have not
used the power in this first 4 years as you know. We have never used it.
We have not used the Bureau (FBI) and we have not used the Justice
Department but things are going to change now.” The following
months may or may not have been a change from what had been going
on in 1970, 1971, and 1972, but they certainly were a sad chapter for
our system of laws.
B. Separation of Powers
The separation of powers between three constitutionally equal and
mutually independent branches of government is a fundamental con-
stitutional doctrine. 39 It is often referred to as the concept of “checks
and balances.” Its success depends on self-adherence and restraint by
those in a position to upset the balance.
31 Jeb S. Magruder was appointed to the office of Deputy Director of Communications in
the Department of Commerce after numerous discussions with H. R. Haldeman and
John Mitchell among others, as to the sensitivity of the administration and its need to take
care of Magruder. Testimony of Jeb Magruder, 2 Hearings 806.
32 Testimony of Herbert Porter, 2 Hearings 653 ; see also testimony of Jeb Magruder,
2 Hearings 806.
33 Exhibit 44, 4 Hearings 1682.
3 * U.S. Constitution, art. II, sec. 3.
35 On May 13, 1974. in a unanimous ruling, the Supreme Court affirmed a decision
prohibiting the use, against more than 600 defendants in Federal criminal cases of evi-
dence obtained under wiretapping applications that were improperly signed by executive
assistant rather than the Attorney General. (No. 72—1057, United States v. Giorando) .
36 Testimony of Henry Petersen, 9 Hearings 3630—31; see also, testimony of Richard
Kleindienst, p. 3574.
37 Testimony of Henry Petersen, 9. Hearings 3631.
33 See note 77, p. 1183; testimony of Howard Hunt, 9 Hearings 3752-53; testimony of
Patrick Gray. Id. at 3467 ; and note 84 supra.
39 It is an historic concept of government derived from Aristotle and Montesquieu, based
°P tS e con tention that “men entrusted with power tend to abuse it.” For a good discussion
L^ s . conce Pt» 8ee Locke. “The Second Treatise on Civil Government,” sec. 141 ; Duff and
Whiteside, 4 “Selected Essays on Constitutional Law,” 291-316 (1938).
1188
Tragically, the record of Watergate reflects a conscious attempt by
the Executive to undermine the responsibilities of the other two
branches, as set forth in article I, which established the legislature,
and article III, which established the judiciary.
Activities with respect to the legislature began with the first con-
gressional body to take an interest in the Watergate matter, the House
Banking and Currency Committee. Every attempt was made to use
Executive power and influence, not to legitimately respond to that
committee’s investigation, but rather to obstruct, block, and actively
mislead it . 40 The executive branch had sole possession of critical evi-
dence necessary to that investigation. Its overt attempts to undermine
the committee’s work were therefore significant.
A different type of obstacle to the exercise of congressional powers
occurred when nominees for high executive branch positions were sent
before Senate committees for confirmation. In a number of instances,
those nominees consciously misled committee inquiries and prepared
testimony in such a way that relevant facts would be concealed . 41 To
the extent that the nomination process was subverted, those who partic-
ipated or were responsible deprived the Congress of a fundamental
constitutional duty, the duty to advise and consent.
Discussions by senior White House officials of what were termed
Watergate tactics, and meetings at LaCosta, Calif., focused on ways of
obstructing an investigation of Watergate by the Senate. This in-
cluded tactics such as the use of Executive privilege to prevent the
testimony of people from the White House, efforts to influence mem-
bers of the Senate committee conducting the investigation, and the
compiling of campaign financing data from those Members’ past cam-
paigns in an effort to embarrass them . 42 The “attack group,” a media-
oriented White House group, arranged to meet with people from
North Carolina thought to have embarrassing information about the
chairman of this committee . 43 Members of the administration were
used as clandestine contacts with the Republicans on the committee to
either give “guidance” or gather intelligence on what facts the com-
mittee possessed . 44 John Dean was suggested as a liaison with the com-
mittee after he had admitted wrongdoing in the coverup , 45 and efforts
toward having a “White House” minority counsel were put forward . 46
40 Testimony of John Dean, 3 Hearings 961. 1575.
41 Testimony of John Dean. 3 Hearings 1007-8.
42 Testimony of John Dean, 3 Hearings 984. “The White House will take a public posture
of full cooperation, but privately will attempt to restrain the investigation and make it as
difficult as possible to get information and witnesses." Id.
43 Dean testified that there was a discussion that one of the ways of pressuring the
Ervin committee was to review contributions made by the White House to members of the
committee in the 1970 election, and that with this in mind records of those contributions
were placed by Mr. Colson in Mr. Dean’s safe so they could be looked into. Testimony of
John Dean, 4 Hearings 1501-02. Dean recalled a conversation with Mr. Baroody, of the
attack group (media-oriented White House group), in which Baroody told Dean that either
that night or the next night he was meeting with some people from North Carolina who
thought they might have some interesting information on Senator Ervin. Testimony of
John Dean. 4 Hearings 1534.
44 Attorney General Kleindienst was directed to meet with Senator Baker and provide
guidance. Transcripts of Presidential conversations. Mar. 22, 1973.
P. John, you would have no problems to talk with Pat Gray and ask him what
the hell Weicker is up to. Do you mind ?
E. Not at all.
Transcripts of Presidential conversations, Mar. 27, 1973 (discussion between the Presi-
dent and Mr. Ehrlichman).
43 “Mitchell. I think it would be appropriate for your counsel to be present.
“Dean. That's right.
“President. Alright. Now that that is done let’s get down to the questions ’’
Transcript of Presidential conversations, Mar. 22, 1973.
40 Testimony of John Dean, 3 Hearings 984.
1189
Separation of powers also encompasses article III, the judiciary.
Here again, the executive subverted the constitutional balance. As an
example, on September 15, 1972, in a conversation in the Oval Office,
the President was told by Mr. Dean that ex farte (out-of-court) con-
tacts had been made with the judge in one of the Watergate-related
civil suits. 47 These contacts were for the purpose of obtaining an ad-
vantage in the case by keeping apprised of inside information, and
they could well be unethical. 48 There was no evidence that the White
House took any steps to stop that activity.
Still another abuse of the separation between the executive and judi-
cial branches, w T as a contact made with the presiding judge in the
Ellsberg case. That judge was asked if he would be interested in be-
coming Director of the FBI. Significantly, the offer was made in
rather clandestine circumstances, at the very time the Ellsberg case
was being tried, and at a time when it was becoming ever more possible
that the break-in at Ellsberg’s psychiatrist might become known to the
judge and jeopardize the case against Ellsberg. 49 A contact under such
circumstances, 'by one of the top White House officials and briefly by
the President himself, 60 once again threatened the concept of mutual
independence intended by the separation of powers.
C. The Bill of Rights
Unlike other amendments to the Constitution, the Bill of Rights
was drawn up as something of a cohesive declaration of rights. It
comprises the first 10 amendments, and represents a guarantee of indi-
vidual freedoms that are fundamental to democracy.
The first, fourth, fifth, and sixth amendments are the bulwark of the
substantive guarantees in our Bill of Rights. They were, without
exception, attacked and violated by Watergate and related events.
That attack focused on the first amendment, which by its very
words, as well as the prominent role it has taken in our history, mark
it as a profoundly important statement of individual rights. Specifi-
cally, it protects freedom of expression in four forms — freedom of
speech, press, assembly, and petition.
Those who spoke out against the administration, whether it was the
chairman of the Democratic Party or Senators expressing their opposi-
tion, whether it was a prominent or unknown citizen, or whether a
member of the administration itself, often found themselves the target
of official retaliation for having exercised their freedom of speech.
“People who were most vocal and could command some audience
were considered enemies or opponents.” 51
One witness testified that the White House was continually seeking
intelligence information about demonstration leaders and their sup-
porters that would either discredit them personally or indicate that
the demonstration was in fact sponsored by some foreign enemy. There
were also White House requests for information regarding ties
between major political figures (specifically Members of the U.S.
Senate) who opposed the President’s war policies and the
demonstration leaders. 62
47 See note 59, p. 1181.
48 Canon 7 of the Code of Professional Responsibility, Ethical Considerations, pp. 7-35.
49 Testimony of John Ehrliehman, 6 Hearings 2617-19.
50 Ibid.
51 Testimony of John Dean, 4 Hearings 1459.
52 Testimony of John Dean, 3 Hearings 915.
1190
Interference with the freedom of speech of such opponents took a
wide variety of forms. It included a program run by Donald Segretti,
in which his operatives were asked to “obtain hecklers,” to be used to
disrupt the speeches of Democratic Presidential candidates. 53
According to Mr. Haldeman, the “enemies list” was drawn up to
deprive those “who were expressing vocal opposition” to the White
House of any “platform for getting extraordinary publicity for their
expression of opposition.” 54 Thus, they were labeled as “enemies,”
their names circulated through the Government, and as a group, identi-
fied for semiofficial executive branch action.
Aside from the enemies or opposing candidates, selected individuals
who expressed opposition were subjected to questionable tactics. As an
example, Alfred Baldwin conducted surveillance of various outspoken
Senators and Congressmen, including Representatives Abzug,
Chisholm, Koch, and McCloskey, and Senators Javits, Kennedy, and
Proxmire. 55
Senator Kennedy was not only subjected to the Baldwin surveil-
lance, he was also a target of Anthony Ulasewicz and John Caulfield,
who investigated his political contributors, his accident at
Chappaquiddick, and a trip to Hawaii on official business. 56 Howard
Hunt was asked by Mr. Colson to get information from a Kennedy
friend in Rhode Island, and was provided with a CIA disguise for
the operation. 57 Mr. Haldeman, according to multiple testimony,
asked that Senator Kennedy be subjected to 24-hour surveillance.
Literally dozens of citizens who spoke out in opposition were targets
of Ulasewicz investigations, which were paid for by the President’s
personal attorney, supervised by Mr. Ehrlichman, and conducted out-
side law enforcement channels, because legitimate law enforcement
was not involved.
The Watergate break-in itself, according to Jeb Magruder, was an
attempt to find embarrassing information about Lawrence O’Brien,
because “Mr. O’Brien had been a very effective spokesman against our
position on the ITT case.” 58 Magruder testified that because of
O’Brien’s effectiveness in speaking out, “we had hope that informa-
tion (from the illegal break-in and wiretap) might discredit him.” 59
This is an interesting use of the power and influence of the Presidency,
in light of the first amendment. It has what is often called, in Supreme
Court, first amendment cases, “a chilling effect.” To the extent Gov-
ernment actions intimidate free speech, they violate the Constitution.
Those who chose to exercise constitutionally recognized symbolic
speech, such as displaying a placard, were likew;se interfered with.
There was testimony that “during the late winter of 1971, when the
President happened to look out the windows of the residence of the
White House and saw a lone man with a large 10-foot sign stretched
out in front of Lafayette Park.” 60 Mr. Higby told Mr. Dean of the
President’s displeasure with the sign. Mr. Haldeman said the sign
had to come down, and when Dean came out of Higby’s office he “ran
53 Testimony of Robert M. Benz, 11 Hearings 4404.
64 Testimony of H. R. Haldeman, 8 Hearings 3155.
55 Testimony of Alfred Baldwin, 1 Hearings 396-97.
ne Testimony of John Dean, 3 Hearings 922-23 ; see also testimony of Howard Hunt,
9 Hearings 377-378. This resulted in a 'written report by Caulfield of Senator Kennedy’s
trip to Honolulu in August 1971. See exhibit 34-4, 3 Hearings 1117.
67 Executive session of John Caulfield, Mar. 16, 1974, p. 85.
58 Testimony of Jeb Magruder, 2 Hearings 790.
59 Ibid.
00 Testimony of John Dean, 3 Hearings 917.
1191
into Mr. Dwight Chapin who said that he was going to get some
‘thugs’ to remove that man from Lafayette Park. He said it would
take him a few hours to get them, but they could do the job.” 61
This was the White House, and its apparent version of first amend-
ment rights of free speech. It also is indicative of the White House
attitude to the first amendment’s “right of the people to peaceably
assemble, and to petition the Government for a redress of griev-
ances,” 62 an attitude that likewise runs through much of its attack
on the press.
The press, however, came in for especially intensive intimidation.
A memo from Mr. Magruder to Mr. Haldeman, entitled “The Shot-
gun versus the Rifle,” 63 set out a plan for influencing news coverage of
the White House. It gives some idea of the executive branch concept of
our free press.
Among its specific suggestions was a recommendation to “utilize
the antitrust division (of the Justice Department) to investigate
various media relating to antitrust violations. Even the possible threat
of antitrust action I think would be effective in changing their
views.” 64 Such a recommendation is clearly wrong, an abuse of Gov-
ernment, and an abuse of the first amendment. In at least one case,
involving an in-depth story on Charles G. Rebozo, an antitrust action
was recommended against the Los Angeles Times, which owned the
paper doing the story . 65
Another recommendation in “The Shotgun versus the Rifle” was
“utilizing the Internal Revenue Service as a method to look into the
various organizations that we are most concerned about. Just the
threat of an IRS investigation will probably turn their approach .” 66
It would again be illegal. And again in the Rebozo story, the news-
man in charge of the story was in fact audited, at the specific- request of
the White House . 67
Newscaster Chet Huntley wrote a piece in Life magazine, contain-
ing what were considered unfavorable remarks. The suggestions for
retaliation against Huntley, in a White House memo by Mr. Higby,
contained a telling statement of broad philosophy: “What we are
trying to do here is tear down the institution.” 68
The broader tactics used against the press included meetings be-
tween Mr. Charles Colson and media representatives . 60 In a summaiy
of his meetings with the three networks chief executives, he observed
that they were terribly nervous about the Federal Communications
Commission. He stated that, “although they tried to disguise this, it
was obvious. The harder I pressed them (CBS and NBC) the more
accommodating, cordial, and almost apologetic they became.” He con-
cluded by observing that “I think we can dampen their ardor for put-
ting on ‘loyal opposition’ type programs.” 70 One of the basic guaran-
« l IUd.
C3 TJ.S. Constitution. Amend. I.
63 Memo from Jeb Magruder to H. R. Haldeman, October 17, 1969.
64 Id., at 2.
65 Memo from David Wilson to John Dean, Dec. 1, 1971.
03 Memo from Jeb Magruder to H. R. Haldeman, Oct. 17, 1969.
67 'Testimony of Senator Dowell Weicker, hearings on Warrantless Wiretapping and
Electronic Surveillance. Apr. 8, 1974. (Exhibit 7).
os “The point behind this whole thing is that we don’t care about Huntley — he is going
te leave anyway. What we are trying to do here is tear down the institution. Huntley
will go out in a blaze of glory and we should attempt to pop his bubble.” Memo from
D. Higby to Jeb Magruder, July 16. 1970.
69 Memo from Charles Colson to H. R. Haldeman, Sept. 25, 1970.
70 IUd.
1192
tees of a free press is that Government power not be used as prior
restraint on the content of news.
Individual newsmen that were apparently critical of the administra-
tion were likewise intimidated. One such newsman, Daniel Schorr of
CBS, was investigated by the FBI. When the investigation became
known, the false story that he was being considered for a high admin-
istration position was put out, and Mr. Malek took the blame for the
investigation even though it had been ordered by Mr. Haldeman. 71
Newspapers and reporters that uncovered the Watergate story were
publicly attacked and ridiculed. In one case, 4 months after the
break-in, the “official White House position” was that stories about
Donald Segretti were “stories based on hearsay, character assassina-
tion, inneundo or guilt by association.” 72 That statement was later
called “inoperative,” after the White House had been unable to cover
up the truth in the story.
Newspapers were exploited, by using them to put out stories known
to be misleading, improper, and in some cases totally false. For exam-
ple, Mr. Hunt testified that he used confidential FBI files to prepare a
derogatory article on Mr. Leonard Boudin, an attorney in the Ells-
berg case," which information Mr. Colson passed on to the working
press. 73
A memo from Mr. Haldeman stated that “we need to get our people
to put out the story on the foreign or Communist money that was used
in support of demonstrations against the President in 1972. We should
tie al l 1972 demonstrations to McGovern and thus to the Democrats as
part of the peace movement.” 74 Even though there Avas no evidence
to support such stories, the memo went on to recommend, “we could
let (columnists) Evans and Novak put it out and then be asked about
it to make the point that we knew and the President said it was not to
be used under any circumstance.” 75
Falsely tying Senator McGovern to Communist money was not the
only false connection that was suggested. Mr. Patrick Buchanan rec-
ommended a number of campaign news strategies including, “The
Ellsberg connection, tying McGovern to him, Ellsberg, and his crime,”
because “if the country goes to the polls in November scared to death
of McGovern, thinking him vaguely anti-America and radical and
pro the leftwingers and militants then they will vote against him —
which means for us.” 76 This is a clear abuse of executive power as to
the press.
One of the most cold-blooded memos to come out of the White House
during this period was written by Patrick J. Buchanan. It analyzed
the pros and cons of a press attack on Dr. Ellsberg.
The memo begins, “having considered the matter until the early
hours, my view is that there are some dividends to be derived from
“Project Ellsberg.” Giving his personal view, Buchanan stated, “To me
it would assuredly be psychologically satisfying to cut the innards from
Ellsberg,” an attitude which has brought his fellow White House
staffer, Mr. Colson, a jail term.
71 Testimony of John Dean. 4 Hearings 1490.
72 Testimony of Clark MacGregor, 12 Hearings 5019.
73 Testimony of Howard Hunt, 9 Hearings 3673 ; see also , executive session of Howard
Hunt, pp. 121-122.
74 Memo from John Dean to H. R. Haldeman, 8 Hearings 3171.
75 Id., at 3172.
76 Exhibit 194, 10 Hearings 4259.
1193
Nevertheless, Buchanan concluded that the Ellsberg issue would not
“be turned around in the public mind by a few well-placed leaks.” Lest
there be any doubt about his position, he then stated, “This is not to
argue that the effort is not worthwhile — but that simply we ought
not now to start investing major personnel resources in the kind of
covert operation not likely to yield any major political dividends to
the President.” 77
No legal or moral problems for Buchanan; just an objection to the
management end of it.
Mr. Buchanan also testified, as to documents surreptitiously taken
from the Muskie campaign and photographed by “Fat Jack.” Bu-
chanan testified that he “did get the material on two occasions, and he
did recommend that it be sent to columnists Evans and Novak. Evans
and Novak did print, on two occasions, I believe, material from
Muskie's campaign.” 7S Here again was a high official, using the credi-
bility of the White House, to peddle wrongfully obtained confidential
information.
Material obtained secretly from the Commerce Department relative
to Senator Muskie’s apparently legitimate attempts to help the Maine
sugar beet industry as their Senator was leaked to the press, for politi-
cal purposes, when that industry began to fail. 79
Information from the Department of Defense as to Senator Mc-
Govern’s personal and confidential war records was recommended for
leak to press. 80
Testimony was received that Mr. Colson ordered the fabrication
of State Department cables relative to the Kennedy administration’s
handling of President Diem’s assassination, and recommended that
this false information be leaked to Mr. William Lambert of Life
magazine. 81 All this was a blatant attempt to improperly use Gov-
ernment power and responsibilities to distort the constitutional role
of the press.
Finally, the official press spokesman for the White House consist-
ently told the press and the American people versions of Watergate
that were not true, when he and those who prepared him were in a
position to know, or in fact knew, that his statements were untrue. The
President himself misled the press in news conferences and official
statements, as to the investigation, its results, and the substance of
evidence involving himself and the Watergate matter.
The fourth amendment fared no better.
It guarantees the “right of the people to be secure in their persons,
houses, papers, and effects, against unreasonable searches and seiz-
ures. . . .” 82 It was expressly violated by burglaries and warrantless
wiretaps.
As an example, this constitutional safeguard was at the center
of illegalities contained in the so-called 1970 intelligence plan. In a
colloquy during the course of this committee’s hearings, the chairman
and Mr. Dean discussed the elements of that intelligence plan. It was
77 White House memo from Patrick Buchanan to John Ehrlichman, July 8, 1971.
78 Testimony of Patrick Buchanan, 1.9 Hearings 3921.
79 Memo to Charles Colson from Thomas Thawley, Deputy Assistant Secretary of Com-
merce, Apr. 16, 1971.
80 Memo from Richard Howard to Fred Fielding, May 12, 1972 (this memo had an
unusual instruction at the top : ‘‘Please Burn Before Reading”).
81 Testimony of Howard Hunt, 9 Hearings 3672.
82 TJ.S. Constitution, amendment IV.
1194
described as recommending (1) techniques for removing limitations
on electronic surveillance and penetration, (2) the use of mail cov-
erage, (3) a technique designated as surreptitious entry, (4) develop-
ment of campus sources of information, and (5) the use of military
undercover agents. The chairman rightly noted, and the witness
concurred, that resort to burglary, electronic surveillance, and pene-
tration without a court order is a clear violation of the fourth amend-
ment. 83
Nevertheless, on July 5, 1970, a memo written by Mr. Haldeman
indicated that the President of the United States gave his approval
to the plan. 84 There is additional evidence that events took place which
closely parallel the recommendations in the 1970 plan. In contrast
with the evidence that the plan was approved, there is no documentary
evidence that the plan was at any time officially withdrawn, although
one witness claimed it was. 85
The instances of burglaries and wiretapping have been well docu-
mented. They include the break-in at Ellsberg’s psychiatrist’s office,
the possible break-in at publisher Hank Greenspun’s office, the four
attempts and two successful break-ins at the Democratic National
Committee headquarters, the plans to break in at McGovern’s cam-
paign headquarters, proposed penetrations of the Potomac Associates
and the Brookings Institution, questionable wiretaps of newsmen and
Government officials, wiretaps of Spencer Oliver, Lawrence O’Brien,
and columnist Joseph Kraft. This disregard for the fourth amend-
ment proceeded in spite of apparently severe warnings and objec-
tions by one of the most experienced figures in law enforcement in
this Nation’s history, J. Edgar Hoover. 86
The fifth amendment was likewise violated. However, it is more
appropriately discussed along with the 14th amendment in the next
section examining due process of law.
The sixth amendment guarantees the right to a speedy trial, the
right to the evidence of witnesses, and the right to subpena evidence
from witnesses, 87 an important principle in our system of justice.
While it may be temporarily obscured by the plight of high officials
in Watergate, history will record that seven men were brought to
trial in 1973 for the Watergate break-in. Six of those men spent con-
siderable time in jail. To date no persons have paid a higher price
for Watergate, through the justice system. When history judges our
system of laws, the fairness of the trial those men went through will
be at the fore.
Viewed in that light, the so-called coverup takes on a somewhat
different significance. It was nothing less than a massive interference
with the constitutional right of several American citizens to a fair trial.
They were categorically denied the testimony of witnesses who pos-
sessed evidence that was critical to their defense. Perjury was planned
and orchestrated from within the White House itself. Evidence was
83 4 Hearings 1455.
84 Memo to Mr. Huston from H. R. Haldeman, July 14, 1970. Exhibit 36, 3 Hearings
1324 : Presidential statement. May 22. 1973.
«Mr. Haldeman testified that the President approved the Huston plan, and that it was
rescinded 5 days later with notification of the agency heads. Testimony of H. R. Haldeman,
8 Hearings ■■ 3030.
86 Testimony of H. R. Haldeman. 7 Hearings 2874. Mitchell also expressed his disapproval
of the 1970 Domestic Intelligence Plan to Mr. Hoover and Mr. DeDoach of the FBI and he
“talked to both Mr. Haldeman and the President about the subject matter.” Testimony of
John Mitchell, 4 Hearings 1604.
87 U.S. Constitution, Amendment VI.
1195
destroyed. Key witnesses were excused from giving testimony before
the grand jury, avoiding their constitutional duty. A speedy trial was
opposed, not because it would result in greater justice, but because
it served the political ends of the White House. Even the defendants
themselves were paid to not give testimony, thereby denying any hope
to at least one of them who might have preferred a fair trial. Offers
of clemency, family support, and rehabilitation were used for the
same purpose. 88
In an opposite sense, the sixth amendment’s guarantees of a wit-
ness’ testimony were again subverted when counterlawsuits were
undertaken against Democratic officials partly to use the power of
taking witnesses’ depositions, to get at embarrassing information. 89
Here the tactic was to put political opponents under oath and use that
circumstance and power to elicit confidential information. Those who
denied witnesses to their own, could not apparently resist enforcing
and invoking the sixth amendment’s guarantees when it came to their
opponents.
D. Due Process of Law
The concept of due process put simply means the right to fair and
j ust treatment under the law.
It is rooted in chapter 39 of the Magna Carta, in which King John
declared that “no free man shall be taken or imprisoned . . . except
by the lawful judgment of his peers or by the law of the land.” 90
Recent Supreme Court cases have described due process, which is
guaranteed by the 5th and 14th amendments, as embodying “a
system of rights based on moral principles so deeply imbedded in the
traditions and feelings of our people as to be deemed fundamental
to a civilized society as conceived by our whole history.” 91
Due process has been even more succinctly described by the Supreme
Court as “that which comports with the deepest notions of what is
fair and right and just.” 92 It is the backbone of justice in America,
and it was dramatically missing in the evidence of not only the Water-
gate criminal proceedings, but in the Ellsberg case and countless other
cases with political overtones in the period directly leading to Water-
gate.
The particular phraseology associated with due process has been
generally used in close association with precise safeguards of accused
persons. Nevertheless, it is equally a restraint on action by the Govern-
ment that unfairly discriminates against our citizens or the exercise
of their rights. Those two guarantees have often been called proce-
dural and substantive due process. Both were violated by the events
leading to and including Watergate.
The obvious example of procedural abuses were the trials. In the
Ellsberg case, in form a ti on for use against the defendant was sought
by means of a warrantless break-in, an act that eventually contributed
to that case being dismissed. In addition, the presiding judge in that
case was offered an attractive job, as FBI Director, in the midst of the
88 Testimony of James McCord, 1 Hearings 131.
89 Dean testified that the conn ter suits against the Democrats in the fall of 19T2 demon-
strate “the willingness to commence counteractions to avoid further prying into the situa-
tion at the White House.” Testimony of John Dean, 4 Hearings 1473.
90 Text and commentary on this chapter may be found in W. McKechinie, “Magna Carta —
A Commentary on the Greater Charter of King John” (Glasgow : 1914).
91 Solesbee v. Balkcom , 339 U.S. 9, 16 (1950).
92 Ibid.
1196
trial. 93 The offer came from Mr. Ehrlichman, Avho was responsible for
supervision of the so-called Plumbers, at a time when Ehrlichman
knew about the break-in by the Plumbers, and presumably knew of
its potential consequences. Dr. Ellsberg’s right to a fair trial was also
jeopardized by tactics that attempted to destroy his public image, dis-
credit his associates, and attack publishers who printed the Pentagon
papers. One of the President’s closest advisers has been sentenced to
1 to 3 years in jail for that tactic.
The direct interference with a fair trial for the Watergate de-
fendants has already been documented. In addition, those defendants
were subjected to prejudicial public statements that they were “third-
rate burglars,” “blackmailers,” and even “double agents.” The im-
portant point is that the accusations came from the White House, and
that the White House was in a position to remove those labels by fol-
lowing its legal duty of providing all relevant evidence.
Perhaps of even greater significance is the vast number of cases in-
volving those accused of conspiracies against the United States. The
improper use of wiretaps, agent provocateurs, and informers re-
sulted in the dismissal of most of those cases. 94 While this was not
directly a focus of the Watergate investigation, it became relevant in
examining the climate and attitudes that led to the Watergate plan.
Criminal cases were not the only instances of due process violations.
The “fair and right and just” application of our laws suffered when
antitrust actions were generated on the basis of political considerations,
when income tax audits were ordered because a newsman wrote an
article the White House did not like, when an enemies list was com-
piled so that the laws could be applied more strictly or to the disad-
vantage of opponents, when White House staff members had access to
FBI files pertaining to their own investigation, when they were given
special treatment before a grand jury, when the intelligence gathered
by the various agencies of our Government was collected, evaluated,
and distributed in apparent violation of the agency statutes, when the
military was used to spy on American citizens working for the Demo-
cratic Party. 95 All of this violated the fifth amendment and, in some
cases, the 14th amendment. In the process, Watergate and its predeces-
sor activities violated one of the broadest principles of our system of
laws, a concept so fundamental that it is the basis of fully one-quarter
of all litigation that comes before the Supreme Court of the land.
This is apparently what happens when the witness who was the
Attorney General during most of that period can be asked whether
he “exaited the political fortunes of the President before the Presi-
dent’s responsibility to perform his constitutional duties to see that
the laws are faithfully executed,” and he responds, “I think that is a
reasonable interpretation.” 96
93 Testimony of John Ehrlichman, 6 Hearings 2617-19.
94 In the White Panthers case, it was illegal wiretaps. In the Camden 28 case, it was the
use of an agent provocateur ; and in the 11 gambling, narcotics, and bribery cases in Miami
it was illegal wiretaps.
95 See, “General Powers and Duties,” notes 10-94, pp. 1178-96 and accompanying text ; see
also, testimony of Senator Lowell Weicker, Jr., hearings on “Warrantless Wiretapping and
Electronic Surveillance,’' Apr. 8, 1974.
96 Testimony of John Mitchell, 5 Hearings 1895.
1197
II. THE GOVERNMENT
One of the significant patterns of evidence that emerged from this
committee’s investigation relates to the operation of government.
In the climate of Watergate there is a tendency to dismiss anything
short' of crimes. Bnt. there is great value to the facts that follow, not
because they contain sensational crimes, but because they confirm a
misuse of the intended functions of important institutions. It reflects
a departure from legitimate government that if allowed to persist
would be of far greater significance, over time, than any short-term
criminal event.
A. The Intelligence Community
The attitudes and policies that led to Watergate had a profound
impact on the intelligence community, from the FBI and the CIA to
the lesser intelligence sections of other agencies.
Soon after the new administration took office in 1968, there seems
to have been a basic dissatisfaction within the White House as to our
existing intelligence capabilities. They were variously considered too
timid, too bound by tradition, and generally incapable of acting ef-
fectively with respect to what the White House perceived as necessary
intelligence.
One of the responses by the White House was to set up a plan, an
intelligence plan, so that the objectives, methods, and results of the
intelligence community would coincide with the White House. This
plan was drafted by Tom Charles Huston in early 1970, 97 and came
to be known as the 1970 Domestic Intelligence Plan, or the Huston
plan.
Much of the plan, which has been described previously, 98 was illegal,
either in its objectives or in the methods it proposed. Nevertheless,
there are numerous indications, in evidence received by this commit-
tee, that the types of activities recommended in the plan were carried
out in the following years. The net effect was to subvert or distort
the legitimate intelligence functions of the Government.
The plan recommended an expanded use of electronic surveillance.
However, the expanded wiretapping that took place in succeeding
years was done outside legitimate channels, such as the 17 so-called
Kissinger taps, 99 the tap on Joseph Kraft, 99a the Watergate wiretaps,
and even the wiretap on the President’s brother. 1
97 According to Mr. Haldeman, “the President set up an interagency committee consisting
of the Directors of the FBI, the CIA, the Defense Intelligence Agency and the National
Security Agency,” and “Mr. Huston, the White House staff man for this project, was
notified by a memorandum from me of the approval of the President.” Testimony of H. R.
Haldeman, 7 Hearings 2875.
98 See, notes 83-86, p. 1194.
"Testimony of Robert Mardian. 6 Hearings 2392-93; John Ehrlichman, 6 Hearings
2529 : and John Dean. 3 Hearings 920.
Testimony of John Dean, 3 Hearings 919. In June 1969, Ehrlichman directed Caulfield
in lieu of the FBI to place a national security tap on Kraft’s home phone. Caulfield con-
tacted Jack Regan, former FBI agent, who ultimately installed the tap. Executive session of
John Caulfield, Mar. 23, 1974.
1 Presidential press conference, Nov. 17, 1973.
1198
The second element of the plan called for surreptitious entries.
Burglaries in fact took place at the office of Dr. Ellsberg’s psychi-
atrist, 2 at the Democratic National Committee, at the office of publisher
Hank Grcenspun, according to multiple evidence ; 3 and were sug-
gested or planned for the offices of the Potomac Associates, 4 The
Brookings Institution, 5 and Senator McGovern’s campaign head-
quarters. 6
Mail sent to an affiliate of the Democratic Party was opened and
photographed by the U.S. Army, in a well-documented and apparently
massive operation, 7 and military agents spied on the Concerned Amer-
icans in Berlin, a group of McGovern supporters who were officially
recognized by the Democratic Party. 8
The specific actions proposed by Huston are only one aspect of the
plan. Equally important are the policy recommendations. The heart
of this new policy was better coordination and use of existing intelli-
gence from all areas of the government. 9 The means of carrying it
out was to be a new intelligence “Committee” sitting above all the
agencies. Again, the plan was carried out.
On September 17, 1970, an Intelligence Evaluation Committee was
set up in the White House. 10 It was to receive information from the
CIA, the FBI, and the National Security Agency, and other intelli-
gence sections. Notwithstanding the fact that the statutes prohibit
the CIA from participating in any domestic intelligence function, it
was called upon to evaluate domestic intelligence gathering by the
other agencies when the Intelligence Evaluation Committee was set
up. This intelligence was to be, digested by the CIA experts and then
disseminated for use wherever useful, regardless of the statutory
limits placed on the agency that collected the information. 11
What was important about setting up that committee was not the
work it actually did, but rather the legitimization of a concept. That
concept was that intelligence functions of the various agencies were
there for whatever purpose the executive decided it wanted, not for
the purposes Congress decided by statute.
As an illustration, Mr. McCord testified that he eventually received
information for use by CRP from the Internal Security Division of
the Justice Department, on a daily basis. 12 It included information
from the FBI, pertained to individuals, and was of a political as well
as nonpolitical nature. 13 This arrangement was made pursuant to a
2 Testimony of Howard Hunt, 9 Hearings 3663.
3 Testimony of Howard Hunt, 9 Hearings 3687. See Transcripts of Presidential Con-
versations, Sept. 15, 1972.
4 White House memo, July 6, 1971, from John Caulfield to John Dean, stating in part,
“a penetration is deemed possible if required.”
5 Testimony of John Dean, 3 Hearings 920 ; executive session of John Caulfield, Mar. 23,
1974.
6 Testimony of Howard Hunt, 9 Hearings 3686.
7 See testimony of Senator Lowell P. Weicker, hearings on “Warrantless Wiretapping and
Electronic Surveillance,” relating to intelligence activities of the U.S. military directed
against “The Concerned Americans in Berlin,” an affiliate of the American Democratic
Party. (Exhibits.)
8 IUd.
9 This was the final section of the 1970 domestic intelligence plan, entitled “Measures to
Improve Domestic Intelligence Operations.” Exhibit 35, 3 Hearings 1323. See testimony
of John Dean, 4 Hearings 1457.
10 Th e memo to the Attorney General describing the setting up of the IEC was quoted
in full in the text of the hearines. 3 Hearings 1063.
11 Testimony of John Dean, 3 Hearings pp. 916-19. 1057-74. and 4 Hearings 1457.
12 McCord received information, including FBI data, from the Internal Security Division
of the Justice Department, upon his request to Attorney General Mitchell. Mitchell told
Mardian to direct McCord to I.S.D., where McCord’s contact was John Martin, Chief of the
Evaluation Section. Testimony of James McCord. 1 Hearings 178.
13 Id., at 181.
1199
request sent to Mr. Mitchell from Mr. McCord, which led to a call
from Assistant Attorney General Mardian in which he relayed the
Attorney General’s approval and told McCord to work through the
Internal Security Division. 14
The Internal Security Division of the Justice Department also
provided political legal assistance to the White House. For example,
it provided information regarding demonstrators, and information
that would embarrass individuals in connection with their relation-
ship with demonstrators and demonstration leaders. 15
Another illustration of misuse of intelligence was the request made
to the IRS, on July 1, 1969, by Mr. Huston, to set up a means of
“reviewing the operations of ideological organizations.” 16 Soon the
IRS had set up an “Activists Organizations Committee,” 17 collect-
ing intelligence to “find out generally about the funds of these orga-
nizations.” An internal memo pointed out that “its activities should be
disclosed generally only to those persons who need to know, because
of its semisecretive nature.” “We do not want the news media to be
alerted to what we are attempting to do or how we are operating
because the disclosure of such information might embarrass the
administration.” “The type of organization in which we are interested
may be ideological ... or other.” “In effect, what we will attempt
to do is to gather intelligence data on the organizations in w 7 hich we
are interested and to use a strike force concept.” 18 This was not tax
collection; it was the IRS being converted into an intelligence agency;
and it was stopped in the midst of this committee’s hearings in mid-
1913.
The next step was when the IRS began gathering intelligence from
other parts of the Government, with no attempt made to restrict this
to tax-related information. Arrangements were made with the military,
the Internal Security Division of the Justice Department, and the
Secret Service to turn over information on individuals or groups. 19
So long ias the IRS has the power to be a potential harassment for the
average citizen if audits are not conducted on an objective basis, this
procedure of developing files on dissenting citizens must be questioned.
The more important point is that IRS duties and responsibilities are
spelled out by the Congress, and such an intelligence operation is
not one of them.
The IRS and the Justice Department were not the only agencies
pressured into assisting White House intelligence demands. A Secret
Service agent spied on Senator McGovern, 20 when supposedly pro-
tecting him during the campaign. When the White House was inf ormed
of this, no objection was made.
14 Id., at 178.
15 Testimony of John Dean, 3 Hearings 916-19.
10 Memo from Tom Huston to Roger Barth, Assistant Commissioner of IRS, Aug. 14,
1970.
17 See testimony of Senator Lowell P. Weieker, hearings on Warrantless Wiretapping and
Electronic Surveillance, Apr. 8, 1974 (exhibit 1. memo by D. O. Virdin of the IRS ; report
of meeting to set up an “Activists Organizations Committee”).
18 Ibid.
19 For example, on Dec. 4, 1969, D. W. Bacon, Assistant Commissioner, IRS, contacted
Col. Heston C. Cole. Counterintelligence Division, Directorate Office of Special Investiga-
tions ; and on Jan. 26. 1970, the IRS contacted Director Rowely of the Secret Service, in
both cases to coordinate intelligence-gathering operations through the Activists Organi-
zations Committee. See testimony of Senator Lowell P. Weieker, hearings on Warrantless
Wiretapping and Electronic Surveillance. Apr. 8, 1974.
20 white House memo from Steve Karalekas to Charles Colson, Aug. 16, 1972, referring
to the activities of Agent Bolton. See also testimony of John Dean, 3 Hearings 923, 1071.
35-687 0 - 74 - 77
1200
An FBI agent was used by a White House staff member to spy on a
Long Island newspaper doing an article on one of the President’s
friends . 21 The Commerce Department was called on to provide com-
mercial information in a project that it was hoped would embarrass
Senator Muskie . 22 The Department of Defense was used to find out
information as to Senator McGovern’s war records, at a time when
there were public charges that he may have acted with cowardice.
There was testimony to the effect that there was nothing short of a
basic policy to use any governmental agencies to seek politically em-
barrassing information on individuals who were thought to be enemies
of the White House. The so-called enemies list was maintained
in the White House for tins purpose, and a memo was prepared to
implement a means of attacking these enemies . 23
Apparently it was not enough to maneuver the intelligence commu-
nity and related agency functions. Plans were made to take what is
clearly a function of Government outside the Government, to set up
an independent intelligence operation.
The first plan was put forth by Mr. Caulfield, in proposals to Messrs.
Dean, Mitchell and Ehrlichman. He suggested a private security
entity that would be available for White House special projects, thereby
insulating the White House from its deeds. It was called Operation
Sandwedge . 24
Mr. Caulfield rejected the Sandwedge plan, and it was apparently
replaced with an operation that came to be known as the “Plumbers.”
In the meantime, Caulfield began conducting intelligence functions
from a position on the White House counsel’s staff, functions that
properly belonged in the agencies, if anywhere.
Caulfield was instructed, for example, to develop political intelli-
gence on Senator Kennedy, including instructions from the Assistant
Attorney General to obtain certain information about the travels of
Mary Jo Kopechne . 26 When he took the job, he told Mr. Ehrlichman
that he would hire an ex-New York City policeman to do investigative
work . 26
Mr. Ulasewicz was then used to collect information on various
enemies, political, ideological, and personal. A sample of his activities
reveals not only why intelligence should not be outside the checks of a
21 John Caulfield testified that he requested a New York City FBI agent to go out to the
Newsday offices. This was done, and included a report of the newspaper’s confidential publi-
cation schedule. Executive session of John Caulfield, Mar. 23, 1974.
23 Memo to Charles Colson from Thomas Thawley, Deputy Assistant Secretary of Com-
merce, Apr. 16, 1971.
23 White House memo from John Dean. Aug. 16, 1971, entitled “Dealing With Our
Political Enemies.” Exhibit 48, 4 Hearings 1689.
24 Drafted in late summer 1971, Operation Sandwedge called for an offensive intelligence-
gathering operation for infiltration of campaign organizations and headquarters with
“undercover personnel, surveillance of Democratic conventions and meetings, derogatory
information-seeking investigations, and “black bag” activities. Though dropped from active
consideration by late 1971, Operation Sandwedge can be seen as a precursor of the Gemstone
Plan which achieved the capabilities championed by Caulfield. See Caulfield Executive
Session, Mar. 23, 1974 ; See also. Campaign Practices Section of Select Committee Report,
exhibit of memorandum of Caulfield to Dean entitled “Operation Sandwedge.” See also
2 Hearings 786 ; 3 Hearings 924-26 ; 6 Hearings 2i537.
25 In the summer of 1969, when Dean was working at the Justice Department, “then
Deputy Attorney General Kleindienst called (Dean) into his office and told (him) that the
White House wanted some very important information . . . regarding the foreign travels
of Mary Jo Kopechne.” Dean was directed to obtain the information from Mr. De Loach,
Deputy Director of the FBI, and give it to John Caulfield from the White House. 3 Hearings
922.
28 Ehrlichman appointed Caulfield to the White House staff on Apr. 8, 1969, as a liaison
with various law enforcement agencies, with the understanding that the services of Mr.
Ulasewicz, a retired New York detective, would be obtained. Commencing July 1969,
Ulasewicz reported on his investigatory activities to the White House through Caulfield,
on the orders of Mr. Ehrlichman and Mr. Dean. 1 Hearings 251.
1201
professional organization, but also the rather broad scope of what the
White House was in fact doing. His investigations included such
things as Richard Nixon's old apartment in New York, a Kennedy
official trip to Hawaii, name checks on White House visitors, the
President’s brother, political contributors to a dozen Senators who
opposed the administration, Jefferson Hospital in Philadelphia, Louis
Harris Polls, the Businessmen’s Education Fund, the House of Mercy
home for unwed mothers, the U.S. Conference of Mayors, a comedian
named Dixon, Mrs. Rose Kennedy’s secretary, and Birmingham, Ala.
city council, mayor, and executive staff. 27 , And that is just a sample
of the much larger number of his investigations. Many of them are
clearly the responsibility of established agencies, if they are anybody’s
responsibility at all.
Eventually, a semiofficial unit, the Plumbers, was established within
the White House, with a combination of police and intelligence du-
ties. It conducted what Mr. Mitchell referred to in his testimony as
the “White House horrors.” 28 According to Mitchell, these operations
were so wrong that if the President had heard about them he would
have lowered the boom, even though there is other evidence that the
President did know about them and didn’t lower any boom. 29
The legitimate intelligence agencies were used to support this opera-
tion, specifically by providing materials for their operations. General
Cushman of the CIA testified that after a personal request from Mr.
Ehrlichman, CIA technical services people provided Mr. Hunt with
a drivers license, social security card, wig, and speech altering device,
which were delivered to a “safe house” of CIA premises per Hunt’s
instructions. 80
Around August 1971, Hunt began to make additional demands on
the CIA : first, for a stenographer to be brought in from Paris, which
Cushman and Director Helms considered merely a face-saving move
and rejected. Later demands were made for a tape recorder in a type-
writer case, a camera in a tobacco pouch, for film development, and for
an additional alias and false papers for another man (“probably
Liddy”) , which requests came to Cushman’s attention after they had
been granted by the technical services people. 31
After Hunt’s additional demands and a subsequent request for a
New York address and phone services, Cushman and Helms decided
Hunt’s requests had exceeded his original authority. On August 31,
1971, Hunt made a final request, for a credit card, which was denied. 32
Mr. Young of the Plumbers unit asked the CIA to do a psychologi-
cal profile of Dr. Ellsberg. It was clearly a domestic project! the only
one of its type ever requested, according to General Cush rni i n of the
CIA, who also testified that such profiles are reserved fob foreign
leaders. Nevertheless, it was done, but Mr. Young considered it un-
satisfactory, so another profile was prepared and sent. 33 Other projects
27 See, committee interviews wth Mr. Ulasewicz, Mr. Dean, Mr. Caulfield, Anne Dawson,
Tony LaRoeco.
28 Mr. Mitchell described the Plumbers’ activities which he learned of from Mr. Mardian
and Mr. LaRue. as the “White House horror stories.” 4 Hearings 1624—25.
20 On Mar. 22, 197,3, the day after Mr. Dean told the President of the Watergate-related
White House horrors and other facts, the President, according to Mitchell, discussed the
possibility of using Dean as a liaison with the Ervin Committee, rather than lowering any
boom. 5 Hearings 1894.
30 8 Hearings 3292-93.
31 Ibid.
32 Ibid.
33 Id., at 3311.
1202
spanned a broad range, such as spiriting Dita Beard from the East
Coast to a Denver hospital, and a subsequent trip to Denver by Hunt in
disguise to question her about the ITT affair. 34 To bring the full
influence of the White House to bear on this extraordinary activity,
Mr. Elirlichman testified that he personally introduced Messrs.
Krogh and Young, who headed up the Plumbers to the heads of
various agencies, such as the Secretary of Defense, the Attorney
General, and the Director of the CIA. 35
Members of the Plumbers eventually went on to similar work for
the Committee To Re-Elect, Although they were clearly outside the
Government, they again used the legitimate agencies. Ex-CIA em-
ployees were recruited on the basis of their loyalty to the CIA. Ra-
tional security responsibilities were misused. Mr. Barker was even
told that the interests of national security he was serving were above
the FBI and the CIA. 36 To reinforce this position, classified and crit-
ical information about the mining of Haiphong harbor was relayed
to Barker the day before the President’s announcement. 37 This was
not only a misuse of secret Defense Department intelligence, but it
also furthered a misuse of national security entrustment in the execu-
tive branch.
In a different type of situation, Mr. Haldeman was appointed “the
Lord High Executioner of leaks.” This technique of attacking and
solving the leaks problem illustrates the contempt for normal Govern-
ment functions. It resulted in Mr. Caulfield, by his own testimony,
being directed by Ehrlichman to wiretap a newsman’s telephone
( Joseph Kraft) in pursuit of a leak, 38 outside the safeguards of Gov-
ernment, wiretap procedures and regulations. There are capabilities
within the legitimate operations of our Government for handling such
a problem. The attitude that these problems had to be treated inde-
pendently was the same attitude that led to the 17 Kissinger taps being
installed outside normal FBI channels and Mardian’s instructions
from the President regarding the disposition of those wiretap logs
“that related to newsmen and White House staff suspected of leak-
ing,” 39 and that led to unusual and perhaps illegal White House in-
volvement in the Ellsberg case, itself.
There is a reason for demanding that Government officials use only
the tested and accountable facilities of Government. It has been illus-
trated by the kind of projects undertaken independently by the White
House.
The final contempt for the intelligence community can be seen in
efforts to exploit them in the coverup. Mr. Ehrlichman said that he
and Mr. Haldeman had spoken to General Walters and Mr. Helms of
34 Shortly after the ITT memo was published in February 1972, Mr. Liddy transported
Dita Beard from Washington to a hospital in Denver. In his interview there, Mr. Hunt
elicited from Dita Beard a public statement that the memo was a fraud. Testimony of
Robert Mardian. 6 Hearings 2359 ; Howard Hunt, 9 Hearings 3752—53.
33 Mr. Ehrlichman testifies further that Mr. Krogh and Mr. Young “described the
function of the special unit" (the Plumbers) to the heads of the various agencies. 7 Hear-
ings 2691.
38 Testimony of Bernard Barker, 1 Hearings 360.
37 Mr. Hunt testified that he was “in very general terms aware of” the President’s speech
announcing the bombing of Haiphong harbor prior to the speech. Hunt requested that Mr.
Barker “attempt to have as many telegrams as possible sent to the White House . . .
manifesting approval of the President’s move.” Testimony of Howard Hunt, 9 Hearings
3745-46.
33 See note 21, p. 1179.
3& The President instructed Mr. Mardian in the fall of 1971 to transfer the logs from
Mr. Sullivan, Assistant Director of the FBI, to Mr. Ehrlichman, who kept them in his safe
for over a year. Testimony of John Dean, 3 Hearings 920-21.
1203
the CIA shortly after the Watergate break-in. 40 Ehrlichman further
said that Walters was a friend of the White House and was there to
give the White House influence over the CIA. 41 Dean testified that
Ehrlichman asked him to explore the possible use of the CIA with
regard to assisting the Watergate burglars. 42
On June 23, 1972, Mr. Haldeman and Mr. Ehrlichman met with
Director Helms and General Cushman of the CIA. According to
Director Helms, Haldeman said something to the effect that it had
been decided that General Walters was to go talk to FBI Director
Gray and inform him that “these investigations of the FBI might run
into CIA operations in Mexico” and that it might be best if they were
tapered off — or something like that. 43 According to General Walters,
Haldeman directed Helms to inhibit the FBI investigation on grounds
that it would uncover CIA assets in Mexico. Haldeman also indicated
he had information the CIA did not have, and that five suspects were
sufficient. 44 When Director Helms and Director Gray of the FBI
scheduled a meeting between themselves on June 28, 1972, Mr. Ehrlich-
man intervened and canceled the meeting, thus preventing any inde-
pendent contacts.
At a later time, Mr. Dean discussed with General Walters the pos-
sibility of using covert CIA funds to pay the Watergate defendants. 45
In February 1973, the CIA was asked by the White House to take
custody of Justice Department files on Watergate, but the request was
denied. 46
Mr. McCord testified that at the time of the Watergate trial, pressure
was brought on himself and other defendants to claim for purposes of
a defense that Watergate was a CIA operation . 47
The FBI was likewise abused in numerous ways. Some of these, such
as turning over Hunt’s files to Mr. Gray, have been well documented.
But there were other examples. The FBI set up the so-called Kissinger
wiretaps outside channels, effectively insulating them from routine
discovery and accountability, and at the President’s instructions, Mr.
William Sullivan (who had supervised the wiretaps) turned over all
evidence of them to the White House when it was reportedly related
to the President that Hoover might use them to preserve his job. 48 The
FBI ran an investigation of CBS newsman Daniel Schorr, in what was
a White House tactic to embarrass him, according to one witness. 40
40 Ehrlichman and Haldeman were instructed to insure that covert CIA activities were
not exposed by the Watergate investigation being conducted by the FBI. 6 Hearings 2557.
41 On June 26. 1972, Mr. Dean on Mr. Mitchell’s suggestion, sought through Mr. Ehrlich-
man to contact the CIA as to the Watergate break-in, 3 Hearings 946.
42 Mr. Dean indicated to General Walters that witnesses were wobbling and could cause
problems, and asked if the CIA could raise bail for some of these defendants. Testimony
of John Dean, 3 Hearings 1037 ; 4 Hearings 1461.
43 Testimony of Richard Helms, 8 Hearings 3238.
44 Memorandum of General Walters, exhibit 101, 7 Hearings 2948-49.
45 Testimony of John Dean, 3 Hearings 1037.
46 On February 9, 1973, Mr. Dean called the new Director of the CIA., Mr. Schlesinger,
and suggested that the Justice Department be required to return to the CIA a package of all
the materials turned over to Justice regarding Hunt and the break-in at Dr. Fielding’s
office. Mr. Schlesinger and General Walters decided this was “out of the question.” Testi-
mony of General Walters, 9 Hearings 3417—19.
47 Testimony of James McCord, 1 Hearings 193-98.
48 In July 1972, Mr. Sullivan, Associate Director of the FBI, informed Mr. Mardian of
the existence of “some very sensitive national security surveillance logs that were not . . .
in-channel,” that Mr. Hoover might use to preserve his job. Mr. Mardian then flew by
courier plane to see the President in San Clemente, who directed him to obtain the reports
from Mr. Sullivan and deliver them to Mr. Ehrlichman. Testimony of Robert Mardian,
6 Hearings 2392-93.
49 Mr. Haldeman requested Mr. Higby to direct the FBI to investigate Daniel Schorr.
But “to the dismay of the White House, Mr. Hoover proceeded with a full field wide-open
investigation” which became apparent and “put the White House in a rather scrambling
position to explain what had happened.” Ultimately the White House attempted to explain
that Mr. Schorr was being considered for a Presidential appointment in the environmental
field. Testimony of John Dean, 3 Hearings 1071.
1204
Mr. Ehrlichman testified that he was instructed after the Watergate
break-in to see to it that the FBI investigation did not uncover the
Ellsberg break-in or get into the Pentagon Papers episode. 50
In the end, the wake of Watergate left a distorted intelligence com-
munity whose historic professionalism had been badly damaged.
B. Law Enforcement Agencies
The primary responsibility for law enforcement falls to the Depart-
ment of Justice. To the extent that White House or political considera-
tions interfered with that responsibility, it interfered with a critical
part of our Government.
There was considerable evidence of White House contacts, includ-
ing pressure and interference, with respect to the Watergate investiga-
tion. It began almost immediately after the break-in, with a request
to the Attorney General that he try to obtain the release of Mr.
McCord. 51 In the following days, he was warned about a too aggres-
sive investigation, he was warned in mid-1972 that Magruder might
have to plead the fifth amendment, he was asked to provide raw FBI
files on the case, and he was asked to be the White House secret con-
tact with this committee. 52 As noted earlier, an agency of the Justice
Department, the FBI, was consciously lied to, was asked for raw files,
its Director was given potentially embarrassing evidence from the safe
of one of the Watergate burglars, with instructions he interpreted as
a request to destroy that evidence.
The White House counsel testified that he in fact received informa-
tion from the Justice Department and the FBI on the Watergate case.
Mr. Dean stated that he was asked by Mr. Mitchell, after Mitchell had
left CEP, to get FBI 302 reports of interviews with witnesses, and
that Mr. Haldeman and Mr. Ehrlichman also thought it would be a
good idea to get those reports. Mr. Mardian, attorneys O’Brien and
Parkinson, and Mr. Richard Moore all viewed those files after Dean
obtained them. Dean pleaded guilty to an “information” charge in
October 1973, which charge included a conspiracy based on White
House access to those files. 53
There were similar pressures as to the whole Ellsberg matter. When
Assistant Attorney General Petersen advised the President of the
Ellsberg break-in, he was told, “I know about that,” and “You stay out
of that.” 54
The Antitrust Division of the Justice Department received requests,
which have been reviewed earlier as to the media, to go after targets of
White House dislike.
60 Testimony of John Ehrlichman. 6 Hearings 2544.
51 On the suggestion of Messrs. Mitchell, LaRue, and Magruder, then Attorney General
Kleindienst was contacted at the Burning Tree Country Club, while playing golf, by Mr.
Liddy and Mr. Powell Moore, to “see if there was any possibility that Mr. McCord could be
released from jail. The Attorney General rebuffed this request.’' Testimony of Jeb Magruder
2 Hearings 798.
52 Sometime after July 7 or 8, Ehrlichman called Kleindienst to tell him that Petersen had
refused Ehrlichman’s orders to “not harass” Secretary Stans with respect to interroga-
tions. Kleindienst told Ehrlichman to never again give orders to Justice Department per-
sonnel. and if this was the President’s desire, then Kleindienst would resign as Attorney
General. Testimony of Richard Kleindienst, 9 Hearings 3564-65.
Ehrlichman testified that, based on what Dean had told him about “the unfolding of
this thing, that Mr. Magruder may have some involvement and that culminated in a meeting
with the Attorney General at the end of July, on July 21 . . Testimony of John
Ehrlichman, 6 Hearings 2554.
53 TJ.&. v. Dean , D.D.C. No. 886-73.
54 Mr. Petersen was so concerned about the President’s directive that he consulted
Attorney General Kleindienst and both of them considered going to the President and
threatening to resign unless the Justice Department was allowed to investigate the Ellsberg
matter. Testimony of Henry Petersen, 9 Hearings 3631-32.
1205
After the Association of Milk Producers pledged $2 million to the
President’s campaign, a grand jury investigation of their association
was halted by the Attorney General. 55 Nevertheless, antitrust viola-
tions were allowed to be pursued as a civil, as opposed to criminal,
suit. 56 The antitrust suit was in fact brought in February 1972, in
spite of much White House concern by Messrs. Colson and Halde-
man. 5T The milk producers discussed their antitrust suit with Treasury
Secretary Connally in March 1972, resulting in a call to the Attorney
General. 58 Other contacts with the Attorney General were made on be-
half of the milk producers, and an attempt was made to give addi-
tional contributions in return for dropping the antitrust suit. 59
A similar pattern of efforts to obtain favorable treatment from the
Attorney General in an antitrust matter followed the transfer of
$100,000 by the Hughes Tool Co. to a friend of the President. The
Hughes Corp. was involved in antitrust problems related to pending
purchases of a hotel in Las Vegas and an airline corporation. 60 At the
time the money was being transferred, a representative of the cor-
poration met with the Attorney General. The antitrust problems
were subsequently resolved. 61
The grand jury system, an essential element of the prosecution proc-
ess, was subverted by members of the administration and CRP, even
to the point of special favors for such officials when they were to be
called before the grand jury. According to one witness, Mr. Ehrlich -
man attempted to prevent former Commerce Secretary Stans from ap-
pearing before the Watergate grand jury by directing Assistant At-
torney General Peterson not to call Stans. Stans’ testimony was even-
tually taken in private, as was the testimony of Messrs. Colson, Kehrli,
and Young. 02
It should be recalled that the Attorney General doubled as a cam-
paign manager from July 1971, until he resigned in April 1972. When
asked if it wasn’t improper “for the chief law enforcement officer of
the United States to be engaging in, directly or indirectly, managing
political activities,” the Attorney General responded, “I do, Senator.” 63
He held this dual role while a number of large campaign contributors,
such as the Association of Milk Producers, the Hughes Tool Co., and
International Telephone & Telegraph had important cases under in-
vestigation by the Justice Department. The Attorney General who
succeeded him pleaded guilty to a charge pertaining to the ITT
matter. 01
55 See Affidavit of Bruce Wilson to the Senate Select Committee on Presidential Campaign
Activities.
50 See Letter from Richard W. McLaren to David M. Dorsen, Assistant Chief Counsel,
Senate Select Committee on Presidential Campaign Activities, dated May 10, 1974.
57 flee the Milk Fund Investigation, part VI, Milk Producer Contribution Activity in
1972 prior to Apr. 7 — and the Justice Department antitrust suit against AMPI (supra),
particularly Stra chan exhibits 7-10.
58 Id., part VI.D.2.
59 Id., part VI.E. 1 and 2.
00 See Hughes-Rebozo Report, Dunes Hotel case, of the Senate Select Committee on
Presidential Campaign Activities (supra).
61 IUd.
62 "Mr. Dash. You said you did agree on a concession. Could you tell us where was Mr.
Stans interrogated?
“Mr. Petersen. He was interrogated in my conference room by the prosecutors on the
case with a reporter present and no one else.
“Mr. Dash. And not before the grand jury?
“Mr. Petersen. No, sir.
“Mr. DAsh. Who else, by the way, was given a similar concession during the investiga-
tion ?
“Mr. Petersen. Colson, Kehrli, and Young.”
® Testimony of John Mitchell, 5 Hearings 1856.
64 Former Attorney General Richard Kleindienst pleaded guilty on May 16, 1974, to one
count of refusing to testify, a misdemeanor, in the ITT case, receiving a suspended sentence
of 1 month in jail and a $100 fine.
1206
The prestige of the Attorney General’s office was misused. Mr.
McCord testified that a very important reason for his participation in
the Watergate operation was “the fact that the Attorney General
himself, Mr. John Mitchell, at his office had considered and approved
the plan, according to Mr. Biddy.” 65 Mr. Baldwin was told that if at
any time he had trouble establishing his authority for being in a certain
place or for having a weapon, he was to mention John Mitchell. 66 In
an outrageous insult to our law enforcement institutions, it was in the
Attorney General’s office on January 27, 1972, and on February 4,
1972, that Biddy’s plan was presented, including expensive charts
outlining mugging, bugging, burglary, kidnaping, and prostitution.
The Justice Department was not alone.
Some of the most blatant attempts to pressure an agency charged
with enforcing laws were aimed at the IBS. The conversation between
the President and Messrs. Dean and Haldeman on September 15, 1972,
states this clearly, criticizing the IKS for not being sufficiently “re-
sponsive” to personal and political demands. 67 It is buttressed with
evidence that the IRS was contacted in relation to cases involving
friends of the 'White House. 68
The confidential tax return information of Mr. Harold J. Gibbons,
vice president of the Teamsters, was turned over to Mr. Colson. It
is significant that the memo discussing Gibbons’ taxes points out that
he supported Senator McGovern; 69 in fact, he was the only major
Teamster official to support McGovern, and the only one whose taxes
were apparently sent to the White House.
The tax data for a prominent Jewish leader in Rhode Island was
given to Mr. Dean’s office, along with confidential tax return informa-
tion on a number of prominent entertainers. Tax audits of Democratic
Party Chairman Lawrence O’Brien were sought in an attempt to
come up with damaging information. In contrast, IRS contacts were
used to help in audits of the President’s friends, including actor John
Wayne, the Reverend Billy Graham, and Mr. Charles G. Rebozo. 70
A close friend of the President’s, according to Mr. Dean “thought he
was being harassed by the agents of the Internal Revenue Service.”
Testimony of James McCord. 1 Hearings 128. ... , ,
89 Mr Baldwin further testified : “I felt that I was in no position to question John
Mitchell” • and Baldwin therefore did not question the legality of his own Watergate-
related activities. Testimony of Alfred Baldwin. 1 Hearings 409.
67 Mr. Dean testified that on September 15. 1972. he discussed with the President “using
the Internal Revenue Service to audit the returns of people,” and that this was in keeping
with earlier discussions with Haldeman wherein Dean was requested that “certain indi-
viduals have audits commenced on them.” Dean replied to the President that the IRS had
not been happy with the prior requests and. according to Dean, the President told him
to keep a good list, so that "we would take care of these people after the election.” Haldeman
added “that he had already commenced a project to determine whicli people in which
agencies were responsive and were not responsive to the White House.” Testimony of
John Dean, 4 Hearings 1480-81.
68 Mr. Dean testified to several reouests made to him to intervene on behalf of “friends
tax reports. One case involved the Justice Department, and two other cases resulted from
complaints by John Wavne and Billy Graham, who felt they were being harassed by the
IRS. Dean’s assistant. Mr. Caulfield, contacted the IRS, which allowed him to see Graham’s
sensitive case report out of Atlanta and which forced the local agent to justify his audit
of Wavne. Testimony of John Dean. 4 Hearings 1530. 1559 ; executive session of John
Caulfield. Mar. 23, 1974, pp. 47-48 ; interview with Mike Acree. Sept. 27, 1973. p. 7.
69 Mr. Colson’s memo not only mentioned “that there are income tax discrepancies involv-
ing the returns of Harold J. Gibbons.” but was also interested that “if there is an informer’s
fee, let me know.” Exhibit 45. 4 Hearings 1686. It is worth pointing out that none of the
official duties of Mr. Colson at the White House would legally justify him having access
to citizens' tax returns, except upon specific request of the President.
70 Sensitive cases, such as the President’s friends, large contributors, or prominent
political figures, were sent to the White House. Testimony of John Dean. 4 Hearings 1529.
Roger Barth, assistant to the IRS Commissioner, would also call John Ehrliehman directly,
and the Secretary of the Treasury would contact the President directly, in the process of
bringing sensitive case reports to White House attention. Interview with Roger Barth,
July 31, 1973, pp'. 7-8.
1207
Dean raised this with Mr. Walters (Commissioner of the IRS) who
said that could not be the case. Dean kept checking the status of the
case, because he “got questions on it with considerable regularity.”
Dean stated that “it was Rose Mary Woods who kept- asking me the
status of the case because this individual was seeing the President a
good deal.” The case was referred to the Criminal Division of the
Justice Department. Dean was told he had to do something about it,
so he eventually saw Mr. Ralph Erickson at the Justice Department,
who said “there is one more thing we can do ; there are some weaknesses
in the investigation and we may send it back to the Internal. Revenue
Service for one last look to see if this follows, it really is a solid case,”
which to Dean’s recollection was done. 71
Nevertheless, the President was not satisfied and suggested that
changes be made at the IRS after the 1972 election. In addition, Mr.
Dean prepared a briefing paper for Mr. Haldeman with respect to
a meeting with the head of the IRS, to make the IRS more respon-
sive to the White House. 72 Mr. Strachan testified that Mr. Haldeman
discussed a more politically responsive commissioner of the IRS so
that it could be used against political opponents such as Clark
Clifford. 73
The IRS was not only contacted with respect to individual cases, it
was also the focal point of certain questionable policies. One of these
policies was to “punish” groups, tax exempt groups in particular, who
were thought to hold ideological views different from the White
House. There was no evidence that these organizations advocated or
did anything illegal or unconstitutional, or that they in any way vio-
lated the tax laws. Nevertheless, they were singled out for challenge as
to the tax exempt benefits they enjoyed under the law. Groups enjoying
the same benefits who were sympathetic to the administration did not
receive the same attack.
Use of the Secret Service to spy on Senator McGovern has already
been reviewed.
The misuse of the CIA and the FBI have likewise been examined
earlier.
It is quite a record for a “law and order” administration.
C. Regulatory Agencies
The regulatory agencies, as much as any other area of Government,
fit the references in a White House memo which addressed the gen-
eral problem of how to use the incumbency and power of the White
House against opponents, or “how we can use the available Federal
machinery to screw our political enemies.” 74
We have already reviewed numerous misuses of the IRS against
political opponents. We have likewise reviewed evidence of plans to
make the IRS more responsive to White House problems and demands.
A prime example of the distortion of regulatory power is contained
in the record of the administration’s plans to attack the media. The
agency at the center of this plan was the FCC.
71 4 Hearings 1530, 1539, 1559, This ease involved Dr. Kenneth Riland. Dr. Riland was
subsequently acquitted of income tax evasion bv a Federal jury.
72 One document submitted by Mr. Dean (exhibit 44) is a briefing paper for H. R. Halde-
man a me °0 rig with the head of the IRS, to make the IRS more responsive to the
White House. 4 Hearings 1349.
73 Testimony of Gordon Strachan, 6 Hearings 2486-87.
_ , 7 kT P ' h , it J Ho,,se memo from John Dean, August 16, 1971, entitled “Dealing with our
Political Enemies.” Exhibit 48, 4 Hearings 1689.
1208
The Federal Communications Commission licenses radio and tele-
vision stations, and is thereby in a unique position to hurt the networks
or any other organization such as a newspaper that owns a local sta-
tion. The memos on this subject which have been reviewed previously,
were frightening at best. They demonstrate clear contempt for statu-
tory restraints on the power given to the FCC by Congress.
A good sample of the attitude toward agencies is a memo from Mr.
Jeb Magruder to Mr. Ken Reitz which notes that ACTION, the
agency that coordinates Government volunteer programs, “is an agency
that we should be able to use politically.” The memo recommends a
meeting with ACTION’S Director to discuss how “we used their
recruiters (who talked to 450,000 young people last year) , advertising
program, public relations effort, and public contact people, to sell
the President and the accomplishments of the administration. We
should be involved and aware of everything from the scheduled ap-
pearances of ACTION’S recruiters to the format and content of its
advertising.” 75
D. The Departments
The variety and scope of evidence bearing on the functions of the
Departments stretches all the way from fabricating a false historical
record of the State Department in the Vietnam war to using the De-
partment of Interior to punish a newscaster.
The State Department incident shows the extremes that were fol-
lowed to achieve the political ends of the White House. In apparent
anticipation that Senator Kennedy would be the opposing nominee for
the Presidency, an attempt was made to falsify President Kennedy’s
role in the assassination of President Diem early in the Vietnam war.
The strategy used to implicate President Kennedy in Diem’s death
was to make up phony telegrams between the White House and South
Vietnam during that critical period. One particular telegram indicated
that Kennedy did not offer safe refuge to Diem, thereby insuring his
assassination. To be able to do this, the State Department was con-
tacted by Mr. Young of the White House Plumbers, resulting in Hunt’s
authorization to go over and review the appropriate cables between the
United States and Saigon. Arrangements were made to leak the story
to appropriate news persons. 70 When Hunt’s safe was opened on June
20, 1972, the bulk of the papers, according to testimony, were classified
cables from the State Department relating to the early years of the
Vietnam war. 77
The Department of Commerce was more directly used. The Secre-
tary of Commerce attended meetings on campaign matters and
campaign contributions while still in office. 78 In order to put out a
story demonstrating that help provided to the Maine sugar beet
industry by Senator Muskie was going to cost taxpayers $13 million
in defaults by that industry, the Department of Commerce was
requested to provide the research material for that story. The corre-
spondence flowed between the White House and Commerce, until
75 Memo from Jeb Magruder to Ken Reitz, director of Young Voters for the President,
N '™ Testimony of Howard Hunt, executive sessions. July 25, 1973 and Sept. 10, 1973 ; also
9 Hearings 3672. 3733, 3772. 3780.
77 Testimony of John Dean. 3 Hearings 937.
73 While still Secretary o'f Commerce, Mr. Stans met in several instances on campaign-
related matters in January and February 1972. Testimony of Maurice Stans, 2 Hearings
733-34.
1209
the White House feared that their respective roles might be dis-
covered. 79
Because of a rather hostile comment former newscaster Chet
Huntley once made regarding the President, there was an effort to
make it as difficult as possible for him to get his Big Sky project in
Montana moving. Apparently, Huntley needed assistance from the
Interior Department, which w T as periodically contacted by the 'White
House in this regard. For whatever reason, Huntley eventually agreed
to back the President in the 1972 campaign and the attack was called
off. 80
The Department of Agriculture announced, on March 12, 1971,
that price supports for milk would not be increased. 81 Board members
of the Commodity Credit Corporation, which has responsibility for
clearing such a decision, was unanimous in its recommendation not
to increase supports. 82
On March 25, 1971, the President reversed the decision of the Agri-
culture Department. There is much evidence of White House aware-
ness and attention at that time to a $2 million campaign pledge by the
milk producers.
'Whether or not the President’s decision was the result of a dairy
industry bribe, it is important to note that the legitimate functions
of the Agriculture Department were circumvented and interfered with.
In the reversal process, none of the Assistant Secretaries at Agricul-
ture or their staffs were consulted. These were the professionals who
had the expertise, who knew the reasons for the initial decision, who
would have to enforce and live with the new decision by the President.
Their opinion or expertise as to the President’s reversal was never
given ; it was never solicited, even indirectly. 83
Instead, at 10 :30 a.m. on March 23, 1971, the President met with the
milk producers, saying, “I know, too, that you are a group that are
politically very conscious. . . . And you are willing to do something
about it.” 84 After a flurry of meetings between other administration
officials and milk producers representatives, the President changed the
Department of Agriculture’s position on March 25. 1971. Thus, regard-
See note 79, p. 1193.
80 In a memo to Lawrence Higby, on July 16, 1970, Jeb Magruder expressed a need to get
some “creative thinking” going on an attack on Huntley for bis statements in Life.
“Huntley will go out in a blaze of glory and we should attempt to pop bis bubble.” Exhibit
166. 10 Hearing* 4127.
In a memo to H. It. Haldeman, on Oct. 19, 1971, Lyn Nofziger notified Haldeman that
“Huntley claims to be a Republican” and would support the Republican Senatorial can-
didate in Montana. John Whitaker, the White House liaison for the Department of Interior,
then ordered the Department of Agriculture to quit “dragging its feet on Big Sky.” 4 Hear-
ings 1703.
81 On March 12. Department of Agriculture announced Secretary Hardin’s decision to
maintain price support level at $4.66. Since in 1970 the Secretary granted the largest
increase at the beginning of a marketing year, which led to increase in production,
Secretary Hardin, after a careful review, felt the retention of price support levels was in
the long term best interests of dairy producers. News release, U.S. Department of Agri-
culture, Mar. 12, 1971.
82 'The Division of the Agricultural Stabilization and Conservation Service drafted its
recommended decision in the form of a docket. The docket, based on recommendations of
economists and superiors, recommended the $4.66 figure and supported it with a four-page
iustification. The docket was then passed up the line before going to the CCC Board of
Directors for approval and undergoes “pre-Board clearance” by others in USDA. On Mar. 3,
1971, the Board of Commodity Credit Corporation approved the docket. The recommended
decision then went to the Secretary of Agriculture for final action.
83 Assistant Secretary Palmby stated that he was unaware of any reconsideration of
the March 12 decision. Palmby summarized his role by stating : “I was part of the March 12
announcement. I was not part of the later announcement.” Interview with Palmby, p. 22.
Furthermore, Assistant Secretary Richard Lyng indicated that his first knowledge of
the reversal in decision came 1 hour before the formal announcement.
84 From, motion for Immediate Production of Records for Which Privilege Has Been
Waived, at 2, Nader v. Butz, C.A. 148-72 (D.C.D.C., filed Jan. 11, 1974).
1210
less of other issues involved, the acceptable processes of government
were evaded for apparently personal and political interests.
A memo was presented which revealed a Cabinet session in which
Mr. Fred Malek told the assembled Cabinet members of a plan to make
the Departments more responsive to the political needs of the admin-
istration. It was this program that led to some of the more unique
abuses of the Departments and agencies.
It was this program that led to evidence of quid, fro quos for the
contracts from the Department of Health, Education, and Welfare,
the Department of Housing and Urban Development, the Department
of Labor, the Department of Interior, the Office of Economic Oppor-
tunity, the Office of Minority Business Enterprise, the Federal Home
Loan Mortgage Association, the General Services Administration,
ACTION, and the Veterans’ Administration. 85
For example, a June 3, 1971, White House memo noted that the
head of the Federal Home Loan Bank Board “has given a great deal
of thought to, and designed, a sound economical plan to use Federal
resources (projects, contracts, et cetera) for advantage in 1972.” 86
A June 23, 1971, White House memo recommended that “In addi-
tion to designating ‘must’ grants from pending applications there may
be occasions in which political circumstances require a grant be gen-
erated for a locality.” 87 This, of course, is in direct contravention of
equal treatment under the laws that control Federal awards, which
are supported by taxpayer funds and are to be distributed only on the
basis of merit and need, by 1 aw.
By March 1972, this program, according to a memo to Mr. Halde-
man citing success at the Commerce Department as an example, had
“resulted in favorable grant decisions which otherwise would not have
been made involving roughly $1 million.” 88 It was then recommended
85 An “Administrative Confidential” memo from Mr. Marumoto. Mr. Malek’s assistant
in the Responsiveness Program, to Rob Davison, also of Mr. Malek’s staff, July 19, 1972
(concerning a Washington, D.C., consulting firm under consideration for contracts from
DOL and HUD) ; an “Administrative — Confidential” Weekly Report from Mr. Marumoto to
Mr. Colson and Mr. Malek. Exhibit 262-28. 13 Hearings 5615. (DOL grant applicants who
were “unfriendly toward the administration were being identified) ; an “Administrative —
Confidential” weekly report, from Mr. Marumoto to Mr. Colson and Mr. Malek, May 5, 1972,
Exhibit 262-15, 13 Hearings 5572 (concerning a $70,000 DOT grant to Joseph Reyes,
National Hispanic Finance Committee, authorized by the Finance Committee for the Re-
Election of the President ; J. A. Reyes Associates also received a $200,000 sole source non-
competitive contract from OEO in July 1972) ; an “Administrative— Confidential” weekly
report from Mr. Marumoto to Mr. Colson and Mr. Malek. May 19. 1972. Exhibit 262-17,
13 Hearings 5581 (a $200,000 grant from the Office of Minority Business Enterprise) ; a
“Confidential” memo from Harry Flemming of CRP to Mr. Malek, March 29, 1972 (con-
cerning a Philadelphia Republican ward leader’s complaint that his Democratic counterpart
was being favored with Fannie Mae mortgage disclosure fees) ; an affidavit of John Clarke
to the Senate Select Committee on Presidential Campaign Activities (indicating the process
whereby architectural engineering contract awards by GSA were given political clearance
by Mr. Clarke of the White House staff) ; a memo by Dan Todd, director of the CRP Older
Americans voter bloc group, entitled “Proposed Communications Support Program for the
Older Americans Division Committee for the Re-Election of the President,” April 14, 1972
(indicating Federal agencies, such as ACTION, should prepare brochures on their senior
citizen programs for frequent release during the 2 months prior to the election) ; “Final
Report” of CRP Veterans Division, from CRP files (“The Campaign staff’s effectiveness
was significantly enhanced by its close liaison with the Veterans’ Administration and
coordination of campaign activity with the agency.”)
M A “Confidential— Eyes Only” memo from Mr, Magruder to William Timmons of the
White House staff, June 3. 1971 (indicating that Preston Martin, head of the FHLBB, was
a “California-Nixon Republican” and “was a little put out that nobody has sought his
political advice”).
87 A “Confidential” memo by William Horton of Fred Malek’s staff entitled “Communicat-
ing Presidential Involvement in Federal Government Programs” (which appears to be a
“first draft” of the Responsiveness Program).
88 Apparently the efforts of Mr. Gifford of the White House staff had Influenced favorable
decisions on a dozen contracts worth $1 million “which otherwise would not have been
made” — “politically these actions have been most favorable.” An extremely sensitive-
confidential memo from Mr. Malek to Mr. Haldeman entitled Increasing the Responsiveness
of the Executive Branch, Mar. 17, 1972.
1211
that someone was needed to take “the lead in the program to politicize
the Departments and Agencies ... and closely monitor the grants-
manship project to insure maximum and unrelenting efforts.” 89
A December 23, 1971, memo to Mr. Haldeman noted that “this pro-
gram, even if done discreetly, will represent a substantial risk. Trying
to pressure ‘nonpolitical’ civil servants to partisanly support the
JPresident’s reelection would become quickly publicized and un-
doubtedly backfire. Consequently, the strategy should be to work
through the top and medium-level political appointees who exercise
control over most of the Departmental decisions and actions.” 90
By June 1972, Mr. Malek reported he had “reviewed the program
with each Cabinet officer (except Rogers) and with the heads of the
key agencies,” and “had them name a top official who would be the
political contact for this program,” as well as “educate loyal ap-
pointees . . . thus forming a political network in each Department.” 91
Aside from abuse of the laws which authorize Federal grants, there
are numerous indications that this program violated the Hatch Act. 92
That act specifically protects against politicizing the Government,
and makes such efforts criminally illegal. In addition, much of this
conduct may have involved a conspiracy to defraud the United States,
under the criminal laws of title 18 , United States Code, section 371, 93
as well as criminal violations of at least three sections of the cam-
paign laws. 94
So much for our independent Departments and Agencies.
The executive department diverted a substantial portion of its pay-
roll, privileges, and power into nongovernmental activities. Mr. Fred-
erick Malek, for example, held an official position at the Committee
To Re-Elect the President as of June 1972 , while on the White House
payroll until September 1 , 1972. 95 Mr. Gordon Strachan likewise was
employed as a liaison to CRP, while being paid as an assistant to the
White House Chief of Staff. Political advertising was supervised
from the office that was supposed to be White House Chief of Staff. 90
Mr. McCord testified that he took part in Watergate partly because
“the top legal officer in the White House” had participated in the
decision to undertake the operation. 97
89 A confidential memo from Mr. Malek to Mr. Haldeman entitled My Role in Support of
Re-Election, Tan. 28. 1972.
90 Mr. Malek sought to minimize any direct links to the President, and therefore proposed
“we stop calling it politicizing the executive branch and instead call it something like
strengthening the Government’s responsiveness.” A confidential memo from Mr. Malek to
Mr. Haldeman entitled “Redirecting the White House staff to support the President’s
Re-Election,” Dec. 23, 1971.
91 A confidential eyes only memo from Mr. Malek to Mr. Haldeman entitled Responsiveness
Program^Progress Report, June 7, 1972.
03 For example, an unsigned “Confidential” memo on CRP stationery addressed to
Attorney General Mitchell, concerning “heavy exploitation of the Cabinet Committee on
Opportunity for Spanish-Speaking Peoples.” Exhibit 262-3. 13 Hearings 5534; a memo
from Mr. Marumoto to Mr. Colson and Mr. Malek, Apr, 28, 1972, concerning reorganization
of the Cabinet Committee’s media section to support the campaign. Exhibit 262—14. Id at
5569 ; Manual for the Surrogate Program Advance School, directed by Brad Porter for
schedule C Government employees subject to Hatch Act, supra.
93 Hammer Schmidt , et al v. United States, 265 U S. 182 (1923) ; also, Dennis v. United
States, 384 U.S. 855, 861 (1966).
94 Title 18, sections 595, 600, 602, 603, 607, 611, 1505 ; see also. Use of the Incumbency —
Responsiveness Program, swpra.
05 Mr. Fred Malek according to Mr. Odle, became head of the citizens division of CRP
between March and June 1972, exercising supervisory control, and had an office at CRP,
even though he did not leave the White House until Sept. 1, 1972. Testimony of Robert
Odle, 1 Hearings 31-32.
98 Mr. Odle’s testimony was that Mr. Strachan (Mr. Haldeman’s assistant) participated
rather actively in matters over at the Committee To Re-Elect. 1 Hearings 31.
97 Testimony of James McCord, 1 Hearings 129.
1212
The prerogatives granted the executive were misused, as has been
detailed earlier. The effect is well summed up by Mr. McCord’s testi-
mony that lie was told the President of the United States was aware
of meetings offering him payoffs and clemency, that the results of the
meetings would be conveyed to the President, and that at a future
meeting there would likely be a personal message from the Presi-
dent himself. This supplemented threats that “the President’s ability
to govern is at stake,” and “the Government may fall” if Mr. McCord
did not follow the “game plan .” 98 Mr. Caulfield confirmed that when
he met with Mr. Dean that Dean wanted to transmit the message to
McCord that the offer of Executive clemency was made with the
proper authority, and that he made such representation to McCord . 90
Not only were the department functions abused, but the Executive
power of appointing department officials was likewise used. It was
Herbert Porter who testified that he reminded the White House of the
things he had done in the campaign when they dragged a bit in finding
him a new job after the election."® It was Jeb Magruder who was
awarded with a high-ranking job at the Commerce Department for
his misdeeds in the reelection campaign . 1
These examples are minor compared to the general plans that were
discussed to restaff the departments after the election to make them
more subservient to the White House . 2
As a final, rather tragic note, this is the White House that used
its power over department appointments to nominate Mr. Gray to the
FBI Directorship, decided not to support him any longer, and rather
than tell him of that fact, decided to let him hang there, and twist
slowly, slowly in the wind . 3
III. THE POLITICAL SYSTEM
Watergate challenged the very underpinnings of American politics
and the American political condition. It happened in the natural clash
and confusion of a free and open system of self-government ; the same
condition that despite its risks and vulnerability has given us many
more moments of magnificence.
Nevertheless, whenever the Nation approaches a Presidential elec-
tion year we have especially good reason to recall our founding fathers’
warnings against the “danger of factions.” History teaches us that no
matter how much a President may insist otherwise, an incumbent be-
gins to measure policy decisions by their effect on his reelection and
wields power in pursuit of his most advantageous position.
The system is designed to absorb this, but without question there is a
line that cannot be crossed if the process is not to be abused.
98 On January 13, 1973, Mr. McCord met Mr. Caulfield and another message was conveyed
as to clemency, along with statements that the President’s ability to govern was at stake,
another Teapot Dome scandal was possible, the Government may fall, and everybody else
was on the track but McCord, who was not following the “game plan,” and who should get
“closer to your attorney” and keep silent. Testimony of James McCord, 1 Hearings 139-40.
90 Testimony of John Caulfield, 1 Hearings 266.
"a See note 32, p. 1187.
1 See note 31, p. 1187.
2 A Dec. 23, 1971, confidential memorandum from Malek to Haldeman entitled redirecting
the White House staff to Support the President’s Reelection.
3 In a telephone conversation with John Ehrlichman, Mr. Dean made reference to the
fact that the President said he was “not sure that Gray’s smart enough to run the Bureau.”
Exhibit 102, 7 Hearings 2950-51. And yet the President apparently had no qualms about
nominating a man not “smart enough to run the Bureau” to be Permanent Director of the
FBI.
1213
The best way to observe how this happened to our political system
in 1972 is to examine it in three component parts : the political party,
the electoral process, and the democratic system.
A. The Political Party
Political parties in America have their own life and status. They
were expressly excluded from our Constitution, yet they have per-
sisted since the Nation’s first generation.
The party has come to serve as a link betw T een constituencies and
men chosen to govern. They serve a valuable function, drawing com-
petitive forces together to seek the reconciliation so essential to intense
issues. When the parties do not function well, individual citizens feel
a loss of control over politics and Government. They find themselves
powerless to influence events. Voting seems futile ; politics seems point-
less. The political process crosses the line * * * and things go badly
for America.
By any measure, the process that led to Watergate emasculated im-
portant party functions. It began with the decision to take the party’s
leader, and his reelection, out of the Republican Party and into an
independent entity, unresponsive to the checks and balances of party
politics. From that point on, the Committee To Re-Elect the President
was a political disaster.
There was a rationalization of CRP’s existence, in some testimony,
to the effect that it was needed for the primaries. 1 A number of Re-
publican candidates entered the primaries, and it was considered un-
fair to use the Republican National Committee on behalf of the
President. This theory ignored the President’s massive popularity
in the party at the time.
The fact is that CRP remained in operation throughout the cam-
paign, long after it would have been proper for the Republican Party
to take over.
Significantly, all available evidence indicates that the traditional
party organizations at the national level, the Republican and Demo-
cratic National Committees, did not undertake illegal or improper
activities in the 1972 campaign. After 16 months of investigation, the
staff of this committee reported conclusively that there was no evi-
dence of wrongdoing, directly or indirectly, by the Republican Na-
tional Committee or its Chairman, Senator Robert Dole (R-Kans.)
during the 1972 campaigns.
Evidence as to CRP’s operation is in direct contrast.
By setting up an exclusive organization, concerned only with the
President, the party was excluded from being properly aided by its
titular head. The President was well-financed, and he won in a land-
slide. The Republican candidates for Congress and State offices did
not have similar success in financing and campaigning against their
Democratic opponents.
A good example of the tactics that hurt the party was the list of
100 Democratic Senators and Congressmen, “primarily from the
4 Mr. Odle justified the need for CRP because the President was but a candidate for
nomination prior to the Convention. Though, according to Odle, there was little doubt the
President would triumph, there was a distinct possibility of a challenge from Congressman
Ashbrook and Congressman McCloskey. Odle felt it w T as not proper for the National Com-
mittee to work for President Nixon, with two challengers anticipated. 1 Hearings 23.
1214
South, who had supported the President on the crucial votes on the
Vietnam war,” who would “not receive very strong opposition” from
the White House. 0 Clearly this would not have been possible if the
party had been involved in the President’s campaign.
Not only did the White House undermine the Republican Party by
supporting Democratic candidates, it likewise undermined the party
from within, by attacking Republican candidates. A memo from Mr.
Haldeman in October 1969, outlined a letterwriting campaign to
silence Republican Senators Percy, Goodell, and Mathias. 6 It con-
sisted of “sending letters and telegrams, and making telephone calls
to the Senators, blasting them . . .” 7
A few days later it was reported to Haldeman that local groups in
Illinois had begun sending critical telegrams and letters to Senator
Percy. 8 A handwritten note by Mr. Haldeman disclosed “this was an
order ... I was told it was being carried out and so informed the
President. 9 Incredible as it may seem the party was writing letters to
itself, leaders of the Republican Party were being attacked by the
head of their own party . . . in disguise.
An incident of serious significance was the suggestion by Mr. Pat-
rick Buchanan that the Florida Republican State Chairman and
the IJ.S. Attorney General attempt to use a provision in Florida
law to keep a Republican challenger off the primary ballot, not be-
cause of legal considerations but for political advantage. 10 Earlier,
that same challenger had been subjected to a bogus contribution to his
New Hampshire campaign, in the name of the Young Socialist Alli-
ance, staged by Mr. Colson, and leaked to the press to discredit his
candidacy. 11 Again, a fellow’ Republican.
Negative politics were even taught to the young.
Mr. Ken Rietz organized the Young Voters for the President as
part of CRP and designed projects for them such as the “McGovern-
Shriver Confrontation” project. 12 This project used the Young Voters
to confront democratic candidates, to generate adverse press, and “up-
set the candidate.” 13 The result was that by September 1972, they had
“learned the McGovern organization and/or the Secret Service has
reacted to our activities . . . the street walk was canceled and Mc-
Govern spoke in an area that was barricaded off .” 14
The Committee To Re-Elect the President violated the principles
of good politics, beginning with its structure and staffing.
The separation between partisan politics and government was vio-
lated by the participation of White House staff, as well as department
and agency officials, in the campaign operation of CRP. Testimony
as to the structure was to the effect that “people who were at the
White House had influence over the committee, they gave it direction,
* Testimony of Gordon Strachan, fi Hearings 2483-84.
0 Memo from .Teb Magruder to H. R. Haldeman, Oct. 14, 1969.
7 Memo from H. R. Haldeman to .Teb Magnifier. Oct. 11. 1969.
8 Memo from .Teb Magruder to H.R. Haldeman. Oct. 14, 1969.
9 Memo from Jeb Magruder to H.R. Haldeman, Oct. 14, 1969 (handwritten note on the
face thereof).
19 Note 75. p. 1183. „ ,,
11 Herbert Porter called Roger Stone and suggested that Stone travel to New # Hampshire
and contribute money to McCloskey’s campaign under the name of an extremist group. Staff
Interview with Roger Stone, pp. 2—3.
12 Memo from Edward Failor to .Teb Magruder, Sept. 23, 1972.
13 In a Sept. 22. 1972. progress report. Ken Rietz, director of Young Voters for the
President, cited daily orchestrated demonstrations using YVP personnel to confront candi-
dates McGovern and’Shriver. in an attempt to generate adverse press coverage. Memo from
Ken Rietz to ,Teb Magruder. Sept. 22. 1972.
14 Memo from Edward Failor to Jeb Magruder, Sept. 23, 1972.
1215
they assisted it,” and that the campaign director “came from the J nstice
Department.” 15
The role of the assistant to the White House Chief of Staff “was to
try to find ont all of the things that were going on at the committee
and make Mr. Haldeman aware of them.” 10 Mr. Fred Malek, accord-
ing to the individual in charge of personnel at CRP, became head of
the Citizens Division of CRP between March and June 1972, exer-
cising supervisory control, and had an office at CRP, even though he
did not leave the White House staff or payroll until September 1,
1972. 17
Mr. Mitchell at the Justice Department and Mr. Haldeman at the
White House “jointly made decisions in advertising.” 18 In citing
instances of so-called blame-taking, one witness cited an example
where Mr. Colson took the blame for ads of questionable political
ethics, whereas Mr. Haldeman was actually responsible. 10
Campaign recommendations from CRP were sent to the Attorney
General for his decision as early as July 3, 1971. That particular cam-
paign memo was written by a staff member in Mr. Malek’s White
House office, with the assistance of an individual in the Office of Man-
agement and Budget and an individual in Mr. Harry Dent’s White
House office. 20 Mr. Mitchell himself testified that he “had frequent
meetings with individuals (from CRP) dealing with matters of pol-
icy” and staffing of CRP while he was still Attorney General. 21
The hiring of personnel for the committee was “cleared by Mr.
Magruder |CRP), Mr. Mitchell (Justice Department), and Mr.
Strachan, who would be looking out for Mr. Haldeman’s (White
House) interest in the clearance process.” 22
The assistant to Mr. Haldeman was even well briefed on the Liddy
plan long before the break-in, and in fact was called on June 17, 1972,
to alert him to the pending break-in. 23
The temptation and opportunity to abuse executive power thus
existed, and the fact that such abuses took place has been demonstrated
earlier in this report. For example, the use of Government agencies
to seek politically embarrassing information on individuals who were
thought to be enemies of the White House, which was testified to
13 Testimony of Robert Odle, 1 Hearings 23.
16 Id., at 31.
17 Id., at 23. 31—32.
18 With respect to advertising. Mr. Odle stated that “Mr. Haldeman had an interest in
advertising- without any question.” and Mr. Mitchell, or Mr. MacGregor “and Mr. Haldeman
jointly made decisions in advertising.” 1 Hearings 35.
19 Dean testified that Colson took the blame for ads of questionable political ethics which
had been placed by a Mr. Shipley, whereas Mr. Haldeman was actually responsible. 4
Hearings 1490.
20 Memo on: Grantsmanship, dated July 3, 1971. from Magruder (CRP). It states:
“Enclosed is a copy of a proposal to insure that the President and his congressional sup-
porters get proper credit for Federal Government programs. This proposal was written by
Bill Horton in Fred Malek’s office with the assistance of Bill Gifford. OMB, and Peter
Millspaugh in Harry Dent’s office. If implemented this should be an effective method of
Insuring that political considerations are taken into account.” Odle testified that these types
of memos were sent to the Attorney General from May 1. 1971, onward. Exhibit 1, 1
Hearings 449.
^Mitchell testified that he “had frequent meetings with individuals (from CRP) dealing
with matters of policy” and staffing of CRP while he was still Attorney General, even though
in a colloquy with Senator Kennedy during the Kleindienst confirmation hearings (which
was entered into the record) Mitchell had testified that at that time he did not have any
re-election campaign responsibilities. Exhibits 74 and 75 consist of a number of documents
wherein Mitchell was “exercising his responsibility as director of the campaign” in June
January 1972. while still Attorney General. 4 Hearings 1653-55.
22 Testimony of Robert Odle, 1 Hearings 72.
23 In his regular “political matters” memo to H. R. Haldeman. Strachan wrote: “Ma-
gruder reports that 1701 now has a sophisticated political intelligence gathering system
'Y 1 !, 9? 300. A sample of the type of information they are developing is attached
at tab HV Testimony of Gordon Strachan, 6 Hearings 2441.
1216
repeatedly, was certainly facilitated by the presence of White House
and agency staff within a nonparty campaign committee. These tac-
tics extended beyond the departments and agencies. Mr. McCord
testified to phone calls and personal contacts to the effect that there
would be executive clemency, financial support for the families, and
rehabilitation after prison. 24 This was possible only through the
facilities of the Presidency ; little if any of it could have been offered
by a political party.
A second aspect of staffing that caused problems and that could
have been avoided by using the Bepublican Party, was the use of
personnel that had little or no experience in elective politics. The dan-
ger with such a staff can be illustrated in the intelligence-gathering
area. Candidates and campaign organizations have collected intelli-
ence for generations. In the past, however, there has been something
akin to an unwritten code as to the methods and content of informa-
tion sought.
It is interesting to contrast Mr. Ehrlichman’s description of dis-
creet investigations, as intended to develop questionable facets of the
personal lives of those being investigated, checking into domestic prob-
lems, drinking habits, personal social activities, and sexual habits. 25
Somehow Mr. Ehrlichman tried to make a connection between the
type of undercover prying into private lives of Hlasewicz and his
“own knowledge” of Members of Congress who “totter onto the floor
in a condition * * * of at least partial inebriation.” 20
Not only did Ulasewicz not investigate the behavior of officials while
performing their public responsibilities, but Mr. Ehrlichman offered
no evidence to substantiate his “own knowledge.”
'When Mr. Ehrlichman then testified that it was proper to have ad
hoc investigators going into sexual habits, drinking habits, domestic
problems, and personal social activities and then provide that infor-
mation to the electorate, this Senator responded, “You definitely have
two different concepts of politics in this country meeting head on.” 27
Significantly, the American people passed judgment on this is-
sue shortly thereafter. A Harris poll exactly 2 months later reported :
“By 83 to 8 percent, the public is massively critical about the hiring of
private detectives by the White House to spy on the sex life, drinking
habits, and family problems of political opponents.” 28
AVhether caused by a lack of experience or by a lack of proper leader-
ship, the staff of CEP had a tragic history. One employee recalled
that “when you find that a person you trust and respect is in jail for
doing something and that man worked for you, it is quite a serious
thing.” 29 It was summed up by Mr. Bobert Odle, wh o testified that
during his association with the committee he came in contact with more
than 400 of its national staff, and “it now appears tragically that some
of those people have acted unethically.” Indeed at the time he testified
on May 17, 1973, the opening day of hearings, two former members
of the staff had been convicted of crimes. 30 To date, in mid-1974, seven
24 Testimony of Janies McCord, 1 Hearings 131.
23 Ehrlichman considered private investigators going into sexual habits, drinking habits,
domestic problems and personal social activities are a proper subject for investigation in
political campaigns. 7 Hearings 2774—75.
20 Testimony of John Ehrlichman, 7 Hearings 2777.
27 I(L, at 2779.
28 Washington Post, Sept. 27, 1973.
29 Testimony of Robert Odle, in reference to the arrest of Mr. McCord, 1 Hearings 29.
30 James McCord and Gordon Liddy. This refers only to employees of CRP.
1217
former members have been indicted for or convicted of criminal con-
duct. 31 This is not what politics should be or has been about.
The second area in which CRP took over normal party functions
was campaign financing.
Money was not properly raised.
Instead, it was allegedly raised by Mr. Rebozo, a friend of the
President, who had no official campaign responsibility. Money was
raised by the President’s personal attorney. During the 1970 cam-
paigns, he was directed on three separate occasions by the White House
staff to disburse funds from a trust, fund in his control at the Chase
Manhattan Bank in New York. He successively took $100,000, $200,-
000, and $100,000 from a safe deposit box, on which one of the signa-
tories was a family relation of the White House Chief of Staff. 32
The beginnings of the administration’s relationship with the Milk
Producers Association, according to their testimony was a $100,000
contribution to the President’s attorney to gain access to the White
House, and to lay the groundwork for favorable treatment in certain
specified ways for the milk producers and the dairy industry. 33 Messrs.
Halcleman, Ehrlichman, and Colson, all of whom were senior White
House advisors, held meetings to discuss fund-raising, including the $2
million pledge from the milk producers.
Money was raised by a Secretary of Commerce and a Secretary of
the Treasury. All of which would have been unnecessary if financing
had been left to the professionals in the Republican Party.
The handling of money was equally bad. Large amounts of cash
were transferred and used. Secret funds were set up. Financial records
were destroyed on a number of occasions. 34 People with no campaign
responsibility were receiving and distributing money. Illegal corpo-
rate contributions were given to CRP and accepted. 35
Even though CRP represented itself as a Presidential reelection
organization, it gave $25,000 to a congressional campaign in Mary-
land. 30 It gave $50,000 to a Vice Presidential donor in Maryland to
make it appear that a Vice Presidential fund-raising event was more
successful than it was, in what turned out to be an illegal transaction. 37
Mr. McCord’s salary from the committee was continued from July
1972, through January 1973. 38 One witness understood that in Gover-
nor Wallace’s gubernatorial campaign in Alabama, Mr. Kalmbach
provided Wallace’s opponent with between $200,000 and $400,000. 3B
The intelligence activities of CRP were the greatest distortion of
the political system undertaken by that committee. The Republican
Party had an information-gathering function of a research nature, but
31 .Tames McCord, Gordon Liddy. Jeb Magruder, John Mitchell. Herbert Porter, Robert
Mardian and Fred LaRue. This again refers only to employees of CRP.
32 Mr. Kalmbach delivered these funds, left over from the 1968 campaign, to a man he
did not know, but could identify by means of clandestine signals at the Sherry-Netherlands
Hotel in New York. Testimony of Herbert Kalmbach. 5 Hearings 2142-44.
83 Mr. Kalmbach understood the $100,000 contribution from AMPI in 1969 to be tied
to aecess to the President and administration approval of new price supports for dairy
farmers. Affidavit of Herbert Kalmbach, to the Senate Select Committee on Presidential
Campaign Activities, supra.
34 Testimony of Herbert Kalmbach, 5 Hearings. 2111 ; see also testimony of Hugh Sloan,
2 Hearings 572.
33 See testimony of eight corporate executives convicted of illegal corporate contributions
Nov. 13-15, 1973, 13 Hearings..
80 Testimony of Hugh Sloan, 2 Hearings 541.
37 Testimony of Maurice Stans, 2 Hearings 756.
McCord testified that he received $25,000 for legal fees and a continuation of his
$3,000 monthly salary (through January 1973) from the Committee To Re-Elect the Presi-
dent via Mrs. Hunt, 1 Hearings 130.
^ Testimony of John Dean, 4 Hearings 1536.
1218
it was considered inadequate by the White House which had become
used to the sophisticated techniques of law enforcement, national
security, and Government intelligence. Unfortunately, by combining
systems, they weren’t able to draw" the distinction between law enforce-
ment and politics.
As a result, CEP found itself collecting and using secret intelligence
from the FBI, and the Internal Security Division of Justice. 40 They
developed a Security Unit that burglarized, photographed, and wire-
tapped, that staked out Senators’ and Congressmen’s offices, and cased
the Democratic headquarters. 41 They planned illegal acts against the
Democratic Party chairman, at his residence and subsequently at his
office. Similar plans were made for Senator McGovern’s headquarters
in Washington and at the Democratic Convention. 42 Electronic sur-
veillance of Senator Muskie’s campaign office was discussed as a future
target, according to McCord, but instead an office in an adjacent build-
ing was leased under the false name of John B. Hayes. 43
Transcripts of illegally wiretapped phone calls were available to
the Committee To Re-Elect. 44 The person transcribing the wiretaps
was paid by payroll check from the committee. 45
A secretary on the CRP payroll typed up illegal wiretap trans-
cripts, assisted Mr. Liddy in preparing a pass to enter McGovern head-
quarters, and eventually took part in the shredding of illegal intelli-
gence documents. 46
CRP built a capability to intercept and photograph memos in
the Muskie campaign, and infiltrated not only Muskie’s campaign but
McGovern’s suite at the Democratic Convention and Senator Humph-
rey’s campaign (with an infiltrator known as Sedan Chair). 47 CRP
became a group that had a .38 snub-nosed, Smith and Wesson revolver
in its files that it handed out to one of its spies, 48 that was purchasing
spy equipment from bugging equipment to microfilm machines for
viewing its stolen documents, that was falsifying credentials, and
shredding incriminating documents. Expensive charts were purchased,
to display plans for bugging, mugging, burglaries, and the like to the
Attorney General. After that briefing, Liddy reported that Mr. Dean
had asked him to destroy them, but because the charts were so ex-
pensive, Liddy decided not to. It found itself with an arrangement
for two attorneys, Mr. Caddy and Mr. Rafferty, to appear at the
second precinct following the Watergate arrests, when the participants
did not return home from their night’s work.
At one point the committee was even instructed by the White House
to hire a shaggy person to sit in front of the White House wearing a
^'Testimony of James McCord, 1 Hearings 178—181.
41 This refers to the White House Plumbers (3 Hearings 919-924), the surveillance of
Alfred Baldwin (1 Hearings 396, 397) and the aborted attempt of the Liddy-McCord team
to break-in to McGovern headquarters, as well as the successful Watergate break-ins (1
Hearings 125—247).
42 These were the initial targets specified by Mr. Liddy to Mr. McCord. Testimony of
-Tames McCord, 1 Hearings 128.
43 Testimony of James McCord. 1 Hearings 153.
44 Testimony of Jeb Magruder, 2 Hearings 827.
45 Alfred C. Baldwin operated as an employee of the Committee To Re-Elect the President,
was paid by payroll check from the committee and was given an identification pin by the
committee. Testimony of Alfred Baldwin. 1 Hearings 393.
40 Testimony of Sally Harmony, 1 Hearings 463.
47 Interview with Herbert Porter, Aug. 20, 1973. Interview Roger Greaves, Aug. 21, 1973.
48 Mr. Baldwin was given a .38 snub-nosed revolver. Smith and Wesson, from the first or
second drawer of a file cabinet at the Committee To Re-Elect the President. Testimony of
Alfred Baldwin, 1 Hearings 392.
1219
McGovern button. 49 This could only be matched by the hiring of
counterdemonstrators for the funeral of J. Edgar Hoover, 50 hardly a
political event.
The Committee To Re-Elect the President not only undermined
the national Republican Party. The proper functioning of the Demo-
cratic Party was likewise subverted. The intelligence functions pre-
viously described were designed, among other things, to influence
the choice of the Democratic nominee for President. As part of that
tactic, the illegal or unethical capabilities that were set up were con-
sistently focused on the strongest contender. The early attack was
against Senator Kennedy. It shifted to Senator Muskie. As Muskie’s
strength diminished, instructions came from the White House to
shift the attack to Senator McGovern. This included not just intelli-
gence, but the so-called dirty tricks operation as well.
The attempts to undermine the Democratic Party went beyond the
candidates. A memo entitled “Counter Actions” and dated Septem-
ber 11, 1972, noted that depositions could be taken in a civil suit
against Larry O’Brien, covering “everything from Larry O’Brien’s
sources of income while Chairman of the DNC to certain sexual ac-
tivities of employees of the DNC. They should cause considerable
problems for those being deposed. 51
Mr. Dean recalled Mr. Haldeman telling him that he hoped O’Brien
would be Senator McGovern’s campaign manager, “because we have
some really good information on him. (Dean) believed he was re-
ferring to tax information at that time.” 52
B. The Electoral Process
A whole range of activities during the 1972 campaign, including so-
called dirty tricks, were aimed at the voter. To the extent that im-
proper or illegal methods were used to influence votes, they interfered
with the electoral process.
The task of influencing the final vote for President had its begin-
nings early in the campaign process. It was a complex operation, not
simply questionable tactics to get people to vote for Mr. Nixon. Rather,
its thrust was negative, to get people to vote against strong contenders.
To take away votes from Senator Muskie in New Hampshire, Mr.
Colson (stating that he had the President’s approval) drafted a letter
urging a write-in campaign for Senator Kennedy. Between 150,000
and 180,000 of the letters were sent out, a press conference was staged
in support of the bogus campaign, along with appropriate advertis-
ing. All at a cost of some $10,000, paid for by contributors to a Re-
publican President, not a Democratic write-in candidate. 53
The President’s campaign funds were also given to Democratic con-
tenders Eugene McCarthy and Shirley Chisholm. 54
40 Robert Reisner testified that Charles Colson instructed Magruder to hire a shaggy
person to sit in front of the White House with a McGovern button. 2 Hearings 512.
50 Robert Reisner believes it was Charles Colson who initiated the hiring of counter-
demonstrators at the Hoover funeral. Ibid.
Hunt testified to enlisting the aid of Mr. Barker and associates during Mr. Hoover’s
funeral. Hunt was informed by Liddy that in conjunction with demonstrations, an effort
would be made to desecrate the catafalque of Hoover in the Capitol. 9 Hearings 3712.
61 4 Hearings 1471.
52 Ibid , .
® Interviews with Jeb Magruder, Aug. 18, 1973, p. 3, and Oct. 1, 1973, p. 11.
Interview with Gordon Strachan, Aug. 13, 1973, p. 8 ; interview with John Mitchell,
June 27, 1973.
1220
Along this line, there was a project to linance the candidate for the
Democratic nomination for Governor who was opposing former Gov-
ernor George Wallace. This was to be financed by surplus funds from
the 1968 campaign, which Mr. Haldeman testified that he “requested
or approved * * * for funding support to a candidate for Governor in
Alabama.” 55
Mr. Haldeman also approved “the funding of Donald Segretti.” 56
The story of Segretti and his henchmen illustrates more dramatic-
ally than anything else the efforts of the White House in the 1972 elec-
tion to subject the voting privilege of American citizens to gutter
politics.
Whether Segretti had any significant or measurable effect is not the
question. It was an example, straight from the White House, of the
worst in American politics.
It included informers planted in opponents’ campaigns, stinkbombs
unleashed against voters attending a campaign picnic, against volun-
teers in a telephone bank operation, and inside a campaign headquar-
ters, a letter on a replica of Muskie stationery accusing Senators J ack-
son and Humphrey of sexual improprieties in the most vile language,
flyers inviting voters to a nonexistent open house at Muskie head-
quarters, a flyer advertising a free all-you-can-eat lunch with drinks
at Humphrey headquarters, a small plane circling the Democratic Con-
vention advertising “Pot, Peace, Promiscuity, Vote McGovern,” ad-
verse press that forced cancellation of a Muskie fundraising dinner,
printed cards with “If you like Hitler, you’ll love Wallace — Vote for
Muskie,” stinkbombs thrown into a campaign headquarters, a forged
letter on McCarthy stationery urging McCarthy delegates to switch to
Humphrey, a letter on Yorty stationery blaming the McCarthy let-
ters on Yorty, hired hecklers, pickets, and informers to disrupt, in-
filtrate, and spy on Senators Humphrey, Muskie, and J ackso-n, a false
press release with the information that Muskie was using Government-
owned typewriters and Federal employees not on leave of absence,
a series of false anti-Muskie advertisements in the University of
Miami campus newspaper, the local Cuban newspaper, and on the local
Cuban radio station insulting the Cuban people, a false press release
on Muskie stationery with a vague stand on aid to Israel which did
not go over well in Miami Beach, a flyer claiming Muskie favored
busing while sending his children to private schools, rats and birds
released at a Muskie press conference, a naked woman to run in front
of Muskie headquarters yelling “I love Muskie,” a flyer falsely ad-
vertising the appearance of Lome Greene and Mrs. Martin Luther
King at a Humphrey rally, hundreds of dollars’ worth of flowers,
chicken, and pizzas delivered to Muskie headquarters, a set of invita-
tions to Black Panthers, the Gay Liberation Front, the Hare Krishna
movement and African diplomats for a Muskie fundraising dinner,
a chauffeur for the Muskie campaign, code-named “Ruby 1,” who
would turn over documents being delivered so they could be surrepti-
tiously photographed, and eventually shown to Mr. Mitchell, a rented
office near Muskie’s headquarters to facilitate copying of documents,
a group of infiltrators in Muskie headquarters in Milwaukee, Hum-
phrey headquarters in Philadelphia, McGovern headquarters in Los
55 'Testimony of John Dean, 4 Hearings 1536.
m Testimony of H. R. Haldeman, 7 Hearings 2876.
1221
Angeles, Washington, and Miami, a ploy to get campaign workers
to drink beer and skip work, and an operation to switch phone-bank
call sheets so the same people would be called repeatedly or the wrong
message would go to selected groups. 57 This is not to mention similar
operations by persons known as “Sedan Chair 1” and “Sedan Chair
2;” 58 and “Ruby II.” 59
It was nothing short of a massive operation to deprive the American
voter of information about Democratic candidates for President. It
was significant not so much as an attack on politicians, but as an at-
tack on voters and their opportunity to cast a fully informed vote.
Dirty tricks were not the only means used to influence the electoral
process improperly.
Misleading the voter by official conduct and statements was equally
in evidence. This kept critical information hidden from voters, when
there was a legal obligation to disclose it, thereby preventing a proper
judgment of the incumbent administration.
The Watergate break-in was called a “third rate burglary at a time
when the White House knew better, based on its briefings and discus-
sions, including a discussion of executive clemency with the President
in July 1972“
Mr. Mardian testified that he even complained to Mr. Clark Mac-
Gregor, who had succeeded Mr. Mitchell as campaign manager, that
statements being made regarding noninvolvement of campaign per-
sonnel were untrue, and that he unsuccessfully attempted to brief
MacGregor about the tremendous exposure of certain people in the
campaign. 81
On August 29, 1972, the President assured the Nation that an in-
vestigation by John Dean had cleared the White House of any involve-
ment. This statement was made in spite of the fact that the President
had received no report from Dean, and never, ever talked with Dean
about Watergate.®
In mid-September 1972, the President discussed possibly unethical
out-of-court contacts that had apparently taken place with the judge
in one of the. Watergate lawsuits, as part of a strategy to keep the
process of justice from operating. 03 Delay or obstruction of this process
again insured that voters would not have the legal record before them
in November.
In mid-October 1972, high-level staff meetings at the White House
were convened to decide how to handle news reports about Segretti.
Even though those participating knew or had access to the full Segretti
story, the decision was made to issue tough denials, and what Mr.
Richard Moore described as “weasel words.” 84 The story was basically
correct, yet it was denounced as “hearsay, innuendo, and character
57 This list was compiled from the testimony of Donald Segretti, 10 Hearings 3980-4054 ;
Martin Kelly, 11 Hearings 4376—4402; Robert Benz, 11 Hearings 4403-34; and John
Buckley, 11 Hearings 4435—77.
aS See interview with Herbert Porter, August 20, 1973: interview with Roger Greaves
(Sedan Chair 1), August 21, 1973; testimony of Michael McMinowray, 11 Hearings
4478—4535.
50 Testimony of Marc Lackritz. 11 Hearings 4636 (describing the activities of Thomas
Gregory, a student hired bv Howard Hunt).
284S?49 Sidential statement > Au S- 15 ’ 1973, p. 3 ;• testimony of John Ehrlichman, 7 Hearings
01 Testimony of Robert Mardian, 6 Hearings 2430.
62 Testimony of John Dean, 3 Hearings 955.
. at 958; Transcripts of Presidential Conversations, September 15, 1972, p. 60.
04 Testimony of Richard Moore, 5 Hearings 2038.
1222
assassination.” No effort was made to tell the truth. The voters were
kept in the dark.
Perhaps this tactic was best summed in testimony by Mr. John
Mitchell. He was interviewed by the FBI on July 5, 1972, and stated
that all he knew was what he r'ead in the newspapers, despite tes-
timony that he had been extensively briefed about Watergate by Mar-
dian and LaRue. His explanation : “at that particular time, we weren’t
volunteering any information.” 65 His reason : “the reelection of the
President, this particular President, was uppermost in my mind with-
out question.” 66 One man was thereby elevated above the fundamental
principles of this Nation.
IV. TRANSITION (FROM FACT TO OPINION)
At the conclusion of the fact-gathering phase of the committee’s
mandate, I met with Legislative Assistant A. Searle Field and Assist-
ant Minority Counsel H. William Shure to discuss what shape our
report on Watergate should take. We settled upon the following
“woulds” and “wouldn’ts” :
1. We would emphasize the known in order to impress upon
the reader the importance of its implications rather than explode
new facts of scandal. We were convinced White House strategy
was (is) geared to numbing America past concern by inundating
America with one White House horror after another.
2. We would ‘report within a framework of principles and in-
stitutions rather than people.
3. We would opine and editorialize but separately from the fac-
tual presentation.
4. We would recommend remedial legislation.
We wouldn’t try and resolve conflicting testimony.
We wouldn’t make judgments on individual guilt or innocence.
We wouldn’t cite “shaky” material as proof.
If what you’ve read up to now in these pages is not new, neither
is it susceptible to argument.
The indisputable ugliness of Watergate is of such scope as to cate-
gorize it as a sheer insanity; either for those who participated in it
or have since defended it.
I don’t know, except as the courts have already passed judgment,
who is guilty or who is innocent.
But I do know that, to accept the White House version of your
Constitution, your Government and your politics is to counterfeit
America.
A. Understanding Watergate
Alright, what to do with the raw data of Watergate? Unless posi-
tive understandings and actions emanate from this negative sequence,
then it seems to me nobody really Avas caught breaking into Watergate.
The gut question this summer is Avhat do Americans now knoAV and
Avhat are they going to do about it ? By way of dramatizing the need
for a proper ansAver to that question, let me cite the following example.
I recently received a critical letter which read : “Really, Senator, ‘all
is fair in love and Avar’.”
^Testimony of John Mitchell, 5 Hearings 1926.
69 Id., at 1827.
1223
American elections — war?
Members of another party — enemies?
Politics — fear ?
Is that the lesson America is taking home from the Watergate?
Because if such is the case, then a whole new era in American politics
will have dawned and Gordon Liddy will be recognized not as peculiar
but as a visionary. Also at such time we of the Select Committee would
have failed. Though a year has gone by between the time of the Senate
Watergate hearings and this Senator’s Watergate conclusions, it is
a matter of constitutional life and death that the American people
make a connection between those two events.
What about the Constitution? Is it up to our times? Certainly it
never before has obtained such visibility. But how about acceptance ?
1. THE CONSTITUTION
Later in this section I intend to editorialize on the abuses to our
governmental and political institutions. However the pivotal struggle
of Watergate is one between men who play for the moment and look
upon the Constitution as a 4th of July interruption to their own
charter and men who play for tomorrow and understand it to be the
force that has given America success beyond America’s natural abil-
ities for success.
Never first in population, land mass or natural resources, why have
we attained a national greatness and personal affluence beyond that
achieved by any country or people?
Because we perjured? Because dissent was disloyalty? Because jus-
tice was political ? Because our concern was developing rear ? Because
we burgled ? Because we thought the worst of each other ?
Or, because
All men are created equal, that they are endowed by their
Creator with certain unalienable rights, that among these
are life, liberty, and the pursuit of happiness . . . .”
Or, because
Congress shall make no law . . . abridging the freedom
of speech or of the press; or the right of the people peace-
ably to assemble, and to petition the Government for a re-
dress of grievances.
Or, because
The right of the people to be secure in their persons,
houses, papers, and effects against unreasonable searches and
seizures shall not be violated ....
Or, because
No person shall be deprived of life, liberty or property
without due process of law
Or, because
In all criminal prosecutions the accused shall enjoy the
right ... to be confronted with the witnesses against him ;
to have compulsory process for obtaining witnesses in his
favor
Or, because
The President . . . shall take the following Oath: “I do
solemnly swear that I will faithfully execute the office of
President of the United States and will, to the best of my
1224
ability, preserve, protect and defend the Constitution of the
United States.”
I catch none of the “everybody’s doing it” or “transcripts” spirit
in any of those words.
The Constitutional history of Watergate to this date has been that
of a President and his ministers who de facto have tried to “yes —
but” most sections of the Constitution.
I feel article V to be preferable to administration amending
methods.
Several years ago many Americans were willing to silently tolerate
illegal Government activity against militants, terrorists or subversives
as an expeditious way to circumvent the precise processes of our
justice system. Though quick, it also proved to be only a short step
to using such illegal tactics against any dissenting American. The
result was we almost lost America. Not to subversives, terrorists
or extremists of the streets but to subversives, terrorists, and extrem-
ists of the White House.
That is why there can be no acquiescence, now, to a few “yes —
buts” to the Constitution. To do so would be just as big a copout as
those who espouse violence in the name of peace.
American constitutional democracy is not the tidiest, most orderly,
most efficient, most expeditious, quietest political system on Earth.
It is in fact raucous, off in a thousand directions of concern, involved
with millions of individuals rather than a mass, revolutionary and
querulous. But what some deem as flaws are precisely its genius.
For those who have made it, it’s a pain. For those who haven’t, it
rebuts predestination.
Our greatness will always be in direct proportion to our freedoms.
Yes, that includes the freedom to be wrong.
Free spirits, not measured freedom, has been the promise of the
Constitution. We can have peace in Vietnam, on campus and in the
neighborhood without forfeiting that promise and no man or group
of men deserve leadership if they would put the Nation to such a
choice.
2. GOVERNMENT
The offices of government in this Nation are complex and awe-
somely powerful. Even if engaged on legal pursuits. It’s not an exag-
geration to state that a U.S. Senator needs every bit of his clout to
move effectively within the bureaucratic maze. Insofar as the 99.9
percent of Americans who are not Presidents, Congressmen, or Sena-
tors, if anything goes wrong with either end of the governed-Govern-
ment equation, the mismatch of the century ensues. And that’s so
even though the slipup is innocently legal. Fully 50 percent of a
Senator’s time and staff are devoted to resolving the innocently legal
slipups between his constituents and their Government. And I’m sure
those who speak up are no more than 5 percent of those being wronged.
What then if agencies and officers of the U.S. Government become
involved, not in innocently legal mistakes, but purposefully illegal
vengeance ? In light of the facts already presented, the greatest danger
of this section is for me not to overeditorialize the case so as to en-
gender disbelief. Of those who read this report, 99 percent of them
know Senators, Congressmen, successful lawyers and other powerful
1225
persons. But America is not supposed to be about the powerful —
rather the frail. And they’re the ones who will eventually suffer the
most if the White House record on using the Government agencies
politically to bring about conformity is allowed to go unchallenged.
The “enemies list”, revealed in the dialog I had with John Dean, has
received much hoopla. But aside from the fact that today it has be-
come a badge of honor, have you ever thought what it feels like to be
an American and have the highest office in the land look upon you as
an enemy? To be spied on, to be investigated, to be harassed, to be
reviled by your own country? It may be a badge of honor when
revealed but it’s frighteningly disheartening while it’s going on and
no one believes that these things are happening in America.
Oh, yes, I’ve heard the excuses for the illegal use of the Federal law
enforcement-intelligence community. National security, domestic secu-
rity, terrorists, law and order, subversives, militants. But let me put
the White House record in the proper factual context.
No administration within my lifetime has a worse record of convic-
tions in relation to indictments than the Nixon administraton. Why?
Because it tried to achieve law and order by lawlessness. It was the
courts that said no, not the Justice Department.
In the matter of the Special Compliance Division of the IRS and
their keeping tabs on “militants, subversives, terrorists, ideological,
and other organizations,” it is fact that in all the IRS files that came
into White House possession, there is not one militant, subversive,
terrorist individual or organization. That is the lesson of a White
House gone ape. Our lesson is that you can’t protect the rights of
anyone unless you protect the rights of everyone.
The differences between myself and this administration on Water-
gate are not philosophical, political, historical, personal or regional.
They are constitutional, pure and simple. A better summation of our
differences could not be found than the surreptitious entry language
of the “1970 Spy/Huston/Sullivan Plan” and again in the words of
the President on September 15, 1972 :
Use of this technique is clearly illegal : it amounts to bur-
glary. It is also highly risky and could result in great em-
barrassment if exposed. However, it is also the most fruitful
tool and can produce the type of intelligence which cannot be
obtained in any other fashion.
You can’t have that and democracy.
I want the most comprehensive notes on all those who tried
to do us in. They didn’t have to do it. They are asking for it
and they are going to get it. We have not used the power in
this first four years as you know. We have not used the Bu-
reau (FBI) and we have not used Justice. But things are
going to change now. And they are either going to do it
right or go.
You can’t have that and democracy.
Remember what Pat Gray said ?
I said early in the game that I thought that Watergate
would tarnish everyone with whom it came in contact and I
am no exception. I had’ a responsibility not to permit myself
1226
to be used , not to permit myself to be deceived and I failed in
that responsibility and I have never failed in anything that I
have undertaken until this point in time. And it hurts.
The Congress and the American people, with more facts in hand
than Pat Gray ever had, have an even greater responsibility not to be
used or deceived in this matter of abuses to our governmental agencies
and political processes.
Because most elected officials or citizens haven’t had the FBI, IBS,
CIA, MI, SS, Justice Department, Defense Department, Commerce
Department, “Fat Jack” or Tony Ulasewicz on their tail does not mean
the abuses of Watergate passed them by. It only means that if they
don’t speak out now, they’ve got no complaint later. A little less spec-
tating Watergate and a little more speaking out is very much in order.
Admittedly to speak out is tough. Just as the Bill of Rights and
democracy is tough.
But speaking out is a patriotism far better suited to 1974 than 1972’s
wearing of flag lapel pins by White House and CREP employees while
they advocated burglary, wiretapping, committed perjury, politicized
justice, impugned the patriotism of those who disagreed with them
and threw due process in the shredder.
Americans of all generations have suffered and died at their best
because they were uncompromising in the idealism they wished for
their country. Who of this generation, then, wants to declare a lesser
truth for America?
It is the answer we give to that question which matters. It will decide
America.
3. POLITICS
In November 1962 I was elected to my first public office — State rep-
resentative to the General Assembly in Hartford, Conn.
Now, some 12 years and eight elections later, I am rounding out my
first term in the TJ.S. Senate — a boyhood dream come true.
Yes, it’s time-consuming and rough on the family life. To that extent
it’s tough. But each dawn for 12 years has me looking forward to the
day. Politics is a clean business with dedicated people. The terms
“9 to 5” and “5-day week” are seldom heard. The winning politician
is in the business of love and not hate. The average politician takes
the cost of serving out of his pocket and not the public’s taxes.
These things need saying to challenge the “end justifies the means”
image, the “everybody’s doing it” image that the White House know-
ingly and a few ignoramuses unwittingly would give politics.
We’re replete with failings personally as I, my staff, and my family
know all too well. But with the public trust given us by our constit-
uencies — we’d no more see that in the mud than the American flag.
Can I prove the above? Sure. Look at your America as I’ve asked
the people of Connecticut to look at their State.
The truth of American politics is in the schools of this country, not
a wiretap; in the hospitals, not a burglary; in the housing projects,
not a scurrilous letter ; in the parks, not in hush money ; in facilities for
the retarded, not in spying; in people who volunteer in a thousand
ways, not in dirty tricksters; in politicians who reach for the weak
first, the strong second, not in hatchetmen. In short, dirt does not
conceive so much tangible excellence as we have in our country.
1227
The truth of America is not in the deeds of men and women at their
worst but rather at their best. Government with its politicians and
the pepole are not apart in a democracy. They are one.
And so it is we will not get any better ethics or more idealism in the
Oval Office or on the Senate floor than we do in the voting booths.
Watergate was conceived in an ignorant apathy of the electorate
and was executed in semiconscious apathy. Its greatest danger is that
it will be forgotten in an apathy of total knowledge. That kind of
voting booth acquittal means that American politics has officially
joined the administration on the dark side of the manhole.
Thank you, no.
B. People and Power
Watergate is not the story of one powerful man. It is a story of
people. Though my efforts have been directed toward the principles
and institutions of this Nation, I am Avell aware that their existence
or disappearance reflects human behavior.
It is no source of pride to me as an American that the coinage of
responsibility has been in inverse measure to rank and power. I was
taught early on, first by my dad and then by the IT.S. Army, that
rank has its privileges because rank has its responsibilities.
Yet in the case of this President, I’ve heard the word “privilege”
used over and over again as a dodge of responsibility.
The word “stonewall” has been used to describe the President’s
defense. Believe me, it has been and continues to be a “human Avail.”
C. Republicans
Obviously this has been rough duty in a Republican sense. How-
ever, from the outset I’ve operated on the basis that the best investi-
gation Avas the best politics. I couldn’t change the facts. I couldn’t
silence those Avho kneAV the facts. All I could do was to make sure
that a Republican spoke the facts if not before, then simultaneously
Avith a Democrat.
On page 108 of the “Transcripts,” President Richard Nixon is talk-
ing to John Dean :
I don’t knoAv Avhat we can do. The people who are most
disturbed about this (unintelligible) are the (adjective de-
leted) Republicans. A lot of these Congressmen, financial
contributors, et cetera, are highly moral. The Democrats are
just sort of saying, “(expletAe deleted) fun and games.”
Richard Nixon understood the strong base of integrity that is a
Republican heritage. Because he rejected it then is no reason for any
Republican to do so now.
Because the Republican National Committee and its chairman, Sen-
ator Robert Dole, of Kansas, Avere in the traditional Republican mold
of decency and honesty is exactly the Avhy of a Committee To Re-Elect
the President. At an executive session of the Select Committee held
on Wednesday, June 19, 1974, I inquired of the staff and the com-
mittee whether after 1 year of investigation there Avas evidence of
wrongdoing by either the BNC or Senator Dole. The answer was a
clearcut “no” in both instances. Republicans Avho now state that “every-
1228
body does it” dishonor the men and women of their own official party
organization and Bob Dole who didn’t do it and wouldn’t have done it.
One last comment.
The record establishes that :
1. The White House took a dive on the congressional races of
1972 insofar as many Republican candidates were concerned. 67
2. Democratic candidates were actively assisted in some in-
stances. 68
3. The White House expended considerable resources and en-
ergies zapping Republican Senators and Congressmen. 69
4. The Justice Department was consulted as to how to keep a
Republican off the Florida primary ballot. 70
Along with a will to pursue the truth, I would hope the will to win
for the Republican Party is slightly stronger and fairer in its next
titular head.
D. Tomorrow
No, this won’t be the Watergate to end all Watergates.
Other men will tape the doors of America in other times.
Whether they succeed will be a matter of spirit.
For then as now, the state of our spirit will determine the state of
this Union.
RECOMMENDATIONS
The necessary legislative and/or constitutional steps should be
initiated to :
1. Make all forms of domestic electronic surveillance, including
wiretapping, illegal.
2. Have the office of Attorney General of the United States be
an elected office.
3. Make all nominations for Federal elective office by direct
primary, with unaffiliated voters free to participate in the party
primary of their choice.
4. Establish a joint congressional committee, with complete in-
vestigative powers and rotating membership, to monitor domestic
intelligence-gathering and law enforcement activities through-
out the executive branch, and be able, under appropriate safe-
guards, to obtain and provide access to relevant materials
requested by any Member of Congress. Similar oversight func-
tions now held by congressional committees should be transferred
to the joint committee.
5. Grant the Supreme Court original jurisdiction over disputes
as to any privilege asserted by the President with respect to the
Congress or Federal law enforcement agencies, thereby making
the Supreme Court the first and final arbiter of the issue.
67 Gordon Strachan testified that there was a list of approximately 100 Democratic
Congressmen, primarily from the South, who were not to receive active opposition from
the White House, 6 Hearings 2483.
08 Carmichael-Eastland campaign in Mississippi for the U.S. Senate, 1972.
09 As part of a White House campaign against Senators Percy, Mathias, and Goodell, a
confidential memo by Mr. Haldeman oh October 11. 1969, ordered a program of : “Sending
letters and telegrams, and making telephone calls to the Senators, blasting them . . .
70 Memo to Attorney General Mitchell from Jeb Magruder, August 11, 1971 : “Pat Bu-
chanan suggested that maybe we could have the Florida State chairman do whatever he
can under this law to keep McCloskey (Rep. McCloskey, R-Calif.) off the ballot.”
1229
6. Subject senior White House staff personnel to confirmation
by the Senate.
7. Prohibit White House staff from making recommendations,
inquiries, or exchanging classified information with any depart-
ment or agency as to any case, action, or funding except upon
written authority of the President, which authority shall be
immediately transmitted to the appropriate congressional com-
mittee, along with a description of each instance in which the
authority is used.
8. Draft a code of candidate responsibility, with appropriate
disciplinary rules and grievance procedures, to be enforced
through a Federal Elections Commission.
9. Provide for “accredited campaign representatives,” ex-
changed by opponents for nomination or election to Federal office,
to be accorded the privileges of travel, interviews, and news
releases granted to accredited press representatives in general.
10. Require Federal candidates and officeholders to fully dis-
close all sources of income and assets or liabilities over $1,500,
to be submitted by February 15 of each year, for the calendar
year preceding, for publication in the Congressional Record. This
to supersede any present statutes relative to congressional finan-
cial disclosure.
11. Require campaigns for the Presidency, after a nominee is
selected, to be run by the party of the candidate.
12. Require that campaigns for nomination or election to Fed-
eral office be conducted between the first Tuesday of September
and the first Tuesday of November.
13. Designate election day as a Federal holiday, in order that
the voting franchise not be restricted by competing concerns
about jobs.
14. Require that candidates for Federal elective office report
all collections and expenditures 2 weeks before election day, with
no collections thereafter.
15. Prohibit candidates for Federal elective office from accept-
ing cash contributions over $50 or spending more than $10,000 in
personal funds.
16. Restrict candidates for Federal elective office to only one
campaign committee.
17. Open all congressional hearings and sessions to the public,
except with respect to national security, proprietary information,
or personally defamatory matters. The present rule, leaving such
open sessions up to each committee’s discretion, should be made
mandatory and uniform.
1231
Resolutions Pertaining to the Select Committee
93d CONGRESS fl jm sx
1st Session RES. £Q
IN THE SENATE OE THE UNITED STATES
February 5, 1973
Mr. Ervin (for himself and Mr. Mansfield) submitted the following resolu-
tion ; which was ordered to be placed on the calendar.
February 7, 1973
Considered, amended, and agreed to
[Omit the part struck through and insert the part printed in italic]
RESOLUTION
To establish a select committee of the Senate to conduct an
investigation and study of the extent, if any, to which
illegal, improper, or unethical activities were engaged in by
any persons, acting individually or in combination with
others, in the presidential election of 1972, or any campaign,
canvass, or other activity related to it.
1 Resolved,
2 Section 1 . (a) That there is hereby established a
3 select commitiee of the Senate, which may be called, for
4 convenience of expression, the Select Committee on Presi-
5 dential Campaign Activities, to conduct an investigation and
6 study of the extent, if any, to. which illegal, improper, or
7 unethical activities were engaged in by any persons, acting
1232
2
1 either individually or in combination with others, in the
2 presidential election of 1972, or in any related campaign or
3 canvass conducted by or in behalf of any person seeking
4 nomination or election as the candidate of any political party
5 for the office of President of the United States in such elec-
6 tion, and to determine whether in its judgment any occur-
7 rences which may be revealed by the investigation and study
8 indicate the necessity or desirability of the enactment of new
9 congressional legislation to safeguard the electoral process
10 by which the President of the United States is chosen.
11 (b) The select committee created by this resolution shall
12 consist of five seven Members of the Senate, three four of
13 whom shall be appointed by the President of the Senate
14 from the majority Members of the Senate upon the recom-
15 mendation of the majority leader of the Senate, and two
1® three of whom shall be appointed by the President of the
1^ Senate from the minority Members of the Senate upon the
l g recommendation of the minority leader of the Senate. For
1® the purposes of paragraph 6 of rule XXV of the Standing
20 Rules of the Senate, service of a Senator as a member, chair-
2 1 man, or viqe chairman of the select committee shall not be
22 taken into account.
no • ■ m
(c) The select committee shall select a chairman and
* vice chairman from among its members, and adopt rules of
nc
procedure to govern its proceedings. The vice chairman shall
preside over meetings of the select committee during the
1233
3
1 absence of the chairman, and discharge such other responsi-
2 bilities as may be assigned to him by the select committee or
3 the chairman. Vacancies in the membership of the select com-
4 mittee shall not affect the authority of the remaining mem-
5 bers to execute the functions of the select committee and
6 shall be filled in the same manner as original appointments
7 to it are made.
8 (d) A majority of the members of the select committee
9 shall constitute a quorum for the transaction of business, but
10 the select committee may fix a lesser number as a quorum
11 for the purpose of taking testimony or depositions.
12 Sec. 2. That the select committed is authorized and
13 directed to do everything necessary or appropriate to make
14 the investigation and study specified in section 1 (a) . With-
15 out abridging or limiting in any way the authority conferred
16 upon the select committee by the preceding sentence, the
17 Senate further expressly authorizes and directs the select
18 committee to make a complete investigation and study of the
19 activities of any and all persons or groups of persons or orga-
20 nizations of any kind which have any tendency to reveal the
21 full facts in respect to the following matters or questions: "
22 (1) The breaking, entering, and bugging of the
23 headquarters or offices of the Democratic National Com-
24 mittee in the Watergate Building in Washington, District
25 of Columbia;
1234
4
1 (2) The monitoring by bugging, eavesdropping,
2 wiretapping, or other surreptitious means of conversa-
3 tions or communications occurring in whole or in part in
4 the headquarters or offices of the Democratic National
5 Committee in the Watergate Building in Washington,
6 District of Columbia;
7 (3) Whether or not any printed or typed or written
8 document or paper or other material was surreptitiously
9 removed from the headquarters or offices of the Demo-
10 cratic National Committee in the Watergate Building in
11 Washington, District of Columbia, and thereafter copied
12 or reproduced by photography or any other means for
13 the information of any person or political committee or
14 organization;
15 (4) The preparing, transmitting, or receiving by
16 any person for himself or any political committee or
17 any organization of any report or information concern-
18 ing the activities mentioned in subdivision (1), (2),
19 or (3) of this section, and the information contained in
20 ’ any such report;
21 (5) Whether any persons, acting individually or
22 in combination with others, planned the activities men-
23 tioned in subdivision (1), (2), (3), or (4) of this
24 section, or employed any of the participants in such
activities to participate in them, or made any payments
25
1235
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
5
or promises of payments of money or other things of
value to the participants in such activities or their fam-
ilies for their activities, or for concealing the truth in
respect to them or any of the persons having any con-
nection with them or their activities, and, if so, the
source of the moneys used in such payments, and the
identities and motives of the persons planning such ac-
tivities or employing the participants in them;
(6) Whether any persons participating in any of
the activities mentioned in subdivision (1), (2), (3),
(4), or (5) of this section have been induced by brib-
ery, coercion, threats, or any other means whatsoever
to plead guilty to the charges preferred against them in
the District Court of the District of Columbia or to
conceal or fail to reveal any knowledge of any of the
activities mentioned in subdivision (1), (2), (3),
(4), or (5) of this section, and, if so, the identities
of the persons inducing them to do such things, and the
identities of any other persons or any committees or
organizations for whom they acted ;
(7) Any efforts to disrupt, hinder, impede, or sabo-
tage in any way any campaign, canvass, or activity con-
ducted by or in behalf of any person seeking nomination
or election as the candidate of any political party for the
office of President of the United States in 1972 by in-
1236
6
1 filtrating any political committee or organization or head-
2 quarters or offices or home or whereabouts of the person
3 seeking such nomination or election or of any person
4 aiding him in so doing, or by bugging or eavesdropping
5 or wiretapping the conversations, communications,
6 plans, headquarters, offices, home, or whereabouts of the
7 person seeking such nomination or election or of any
8 other person assisting him in so doing, or by exercising
9 surveillance over the person seeking such nomination or
10 election or of any person assisting him in so doing, or by
11 reporting to any other person or to any political com-
12 mittee or organization any information obtained by such
13 infiltration, eavesdropping, bugging, wiretapping, or
14 ' surveillance;
15 (8) Whether any person, acting individually or in
16 k combination with others, or political committee or orga-
17 nization induced any of the activities mentioned in sub-
18 division (7) of tMs section or paid any of the partici-
19 pants in any such activities for their services, and, if so,
20 ; the identities of such persons, or committee, or organiza-
21 tion, and the source of the funds used by them to procure
22 or finance such activities ;
23 (9) Any fabrication, dissemination, or publication
24 of any false charges or other false information havirig
25 the purpose of discrediting any person seeking nomina-
1237
7
1 1 tion or election as the candidate of any political pai’ty
2 to the office of President of the United States in 1972;
3 (10) The planning of any of the activities men-
4 tioned in subdivision (7), (8), or (9) of this section,
5 the employing of the participants in such activities,
6 and the source of any moneys or things of value which
7 may have been given or promised to the participants in
8 such activities for their services, and the identities of
9 any persons or committees or organizations which may
10 have been involved in any way in the planning, pro-
11 curing, and financing of such activities.
12 (11) Any transactions or circumstances relating to
13 the source, the control, the transmission, the transfer,
14 the deposit, the storage, the concealment, the expendi-
15 ture, or use in the United States or in any other coun-
16 try, of any moneys or other things of value collected or
17 received for actual or pretended use in the presidential
18 1 election of 1972 or in any related campaign or canvass
19 or activities preceding or accompanying such election
20 by any person, group of persons, committee, or orga-
21 nization of any kind acting or professing to act in behalf
22 of any national political party or in support of or in
23 opposition to any person seeking nomination or election
24 to the office of President of the United States in 1972;
1238
8
1 (12) Compliance or noncompliance with any act
2 of Congress requiring the reporting of the receipt or dis-
3 bursement or use of any moneys or other things of value
4 mentioned in subdivision (11) of this section;
5 (13) Whether any of the moneys or things of value
6 mentioned in subdivision (11) of this section were
7 placed in any secret fund or place of storage for use in
8 financing any activity which was sought to be concealed
9 from the public, and, if so, what disbursement or expend-
10 iture was made of such secret fund, and the identities
11 of any person or group of persons or committee or or-
12 ganization having any control over such secret fund or
13 the disbursement or expenditure of the same;
14 (14) Whether any books, checks, canceled checks,
15 communications, correspondence, documents, papers,
16 physical evidence, records, recordings, tapes, or mate-
17 rials relating to any of the matters or questions the select
18 committee is authorized and directed to investigate and
19 study have been concealed, suppressed, or destroyed by
20 any persons acting individually or in combination with
21 others, and, if so, the identities and motives of any such
22 persons or groups of persons;
23 (15) Any other activities, circumstances, materials,
24 or transactions having a tendency to prove or disprove
25 that persons acting either individually or in combination
1239
9
.1 with others, engaged in any illegal, improper, or un-
2 ethical activities in connection with the presidential
3 election of 1972 or any campaign, canvass, or activity
4 related to such election ;
5 (16) Whether any of the existing laws of the
6 United States are inadequate, either in their provisions
7 or manner of enforcement to safeguard the integrity or
8 purity of the process by which Presidents are chosen.
9 Sec. 3. (a) To enable the select committee to make
10 the investigation and study authorized and directed by this
11 resolution, the Senate hereby empowers the select committee
12 as an agency of the Senate ( 1 ) to employ and fix the com-
13 pensation of such clerical, investigatory, legal, technical, and
14 other assistants as it deems necessary or appropriate ; (2) to
15 sit and act at any time or place during sessions, recesses, and
16 adjournment periods of the Senate; (3) to hold hearings for
17 taking testimony on oath or to receive documentary or physi-
18 cal evidence relating to the matters and questions it is author-
19 ized to investigate or study; (4) to require by subpena or
20 otherwise the attendance as witnesses of any persons who
21 the select committee believes have knowledge or information
22 concerning any of the matters or questions it is authorized to
23 investigate and study; (5) to require by subpena or order
24 any department, agency, officer, or employee of the execu-
25 • live branch of the United States Government, or any private
35-687 0 - 74 - 79
1240
10
1 person, firm, or corporation, or any officer or former officer
2 or employee of any political committee or organization to
3 produce for its consideration or for use as evidence in its
4 investigation and study any books, checks, canceled checks,
5 correspondence, communications, document, papers, physical
6 evidence, records, recordings, tapes, or materials relating to
7 any of the matters or questions it is authorized to investigate
8 and study which they or any of them may have in their
9 custody or under their control; (6) to make to the Senate
10 any recommendations it deems appropriate in respect to the
11 willful failure or refusal of any person to appear before it in
12 obedience to a subpena or order, or in respect to the willful
13 failure or refusal of any person to answer questions or give
14 testimony in his character as a witness during his appearance
15 before it, or in respect to the willful failure or refusal of any
16 officer or employee of the executive branch of the United
17 States Government or any person, firm, or corporation, or any
18 officer or former officer or employee of any political committee
19 or organization, to produce before the committee aiiy books,
20 checks, canceled' checks, correspondence, communications;
21 document, financial records, papers, physical evidence, rec-
22 ords, recordings, tapes, or materials in obedience to any sub-
23 pena or order; (7) to take depositions and other testimony on
24 oath anywhere within the United States or in any other
25 country ; ( 8 ) to : procure the temporary or intermittent serv-
1241
11
1 ices of individual consultants, or organizations thereof, in the
2 same manner and under the same conditions as a standing
3 committee of the Senate may procure such services under
4 section 202 (i) of the Legislative Reorganization Act of
5 1946; (9) to use on a reimbursable basis, with the prior
6 consent of the Government department or agency concerned
7 and the Committee on Rules and Administration, the serv-
8 ices of personnel of any such department or agency ; (10) to
9 use on a reimbursable basis or otherwise with the prior con-
10 sen t of the chairman of any other of the Senate committees
11 or the chairman of any subcommittee of any committee of
12 the Senate the facilities or services of any members of the
13 staffs of such other Senate committees or any subcommittees
14 of such other Senate committees whenever the select com-
15 mittee or its chairman deems that such action is necessary or
16 appropriate to enable the select committee to make the in-
17 vestigation and study authorized and directed by this resolu-
lg tion ; (11) to have access through the agency of any mem-
19 hers of the select committee or any of its i nvestigatory or
- 2 (F ‘legal assi s tan ts designated fey it or its chairman , er the rank-
21 ing m in o r i ty m e mb e r , chief majority counsel, minority coun-
22 sel, or any of its investigatory assistants jointly designated by
23 the chairman and the ranking minority member to any data,
24 evidence, information, report, analysis, or document or papers
25 relating to any of the matters or questions which it is author-
1242
18
1 ized and directed to investigate and study in the custody or
2 under the control of any department, agency, officer, or em-
3 ployee of the executive branch of the United States Covern-
4 ment having the power under the laws of the United States
5 to investigate any alleged criminal activities or to prosecute
6 persons charged with crimes against the United States which
7 will aid the select committee to prepare for or conduct the
8 investigation and study authorized and directed by this reso-
9 lution; and (12) to expend to the extent it determines nec-
10 essary or appropriate any moneys made available to it by the
11 Senate to perform the duties and exercise the powers con-
12 ferred upon it by this resolution and to make the investigation
13 and study it is authorized by this resolution to make.
14 (b) Subpenas may be issued by the select committee
15 acting through the chairman or any other member desig-
16 nated by him, and may be served by any person designated
17 by such chairman or other member anywhere within the
18 borders of the United States. The chairman of the select
19 committee, or any other member thereof, is hereby author-
20 ized to administer oaths to any witnesses appearing before
21 the committee.
22 (c) In preparing for or conducting the investigation and
23 study authorized and directed by this resolution, the select
24 committee shall he empowered to exercise the powers con-
25 ferred upon committees of the Senate by section 6002 of title
1243
13
1 18 of the United States Code or any other Act of Congress
2 regulating the granting of immunity to witnesses.
3 Sec. 4. The select committee shall have authority to
4 recommend the enactment of any new congressional legis-
5 lation which its investigation considers it is necessary or
6 desirable to safeguard the electoral process by which the
7 President of the United States is chosen.
8 Sec. 5. The select committee shall make a final report of
9 the results of the investigation and study conducted by it
10 pursuant to this resolution, together with its findings and
11 its recommendations as to new congressional legislation it
12 deems necessary or desirable, to the Senate at the earliest
13 practicable date, but no later than February 28, 1974. The
14 select committee may also submit to the Senate such interim
15 reports as it considers appropriate. After submission of its
16 final report, the select committee shall have three calendar
17 months to close its affairs, and on the expiration of such
18 three calendar months shall cease to exist.
19 Sec. 6. The expenses of the select committee through
20 February '428, 1974, under this resolution 'shall not exceed-
21 $500,000, of which amount not to exceed $25,000 shall be
22 available for the procurement of the services of individual
23 consultants or organizations thereof. Such expenses shall be
24 paid from the contingent fund of the Senate upon vouchers
25 approved by the chairman of 1 the select committee.
1244
14
1 The minority members of the select committee shall have one-
2 third of the professional staff of the select committee (includ-
3 ing a minority counsel) and such part of the clerical staff
4 as may be adequate.
1245
93d CONGRESS
1st Session
S. RES. 194
IN THE SENATE OE THE UNITED STATES
November 2, 1973
Mr. Ervin (for himself, Mr. Baker, Mr. Gurnet, Mr. Inouye, Mr. Montoya,
Mr. Talmadge, and Mr. Weicker) submitted the following resolution;
which was ordered to be placed on the calendar
November 7, 1973
Considered and agreed to
RESOLUTION
Relating to S. Res. 60.
1 Resolved, That —
2 Section 1. By S. Res. 60, Ninety-third Congress, first
3 session (1973), section 3 (a) (5), the Select Committee on
4 Presidential Campaign Activities was and is empowered to
5 issue subpenas for documents, tapes, and other material to
6 any officer of the executive branch of the United States Gov-
7 emment. In view of the fact that the President of the United
8 States is, as recognized by S. Res. 60, an officer of the
9 United States, and was a candidate for the office of President
10 in 1972 and is therefore a person whose activities the select
11 committee is authorized by S. Res. 60 to investigate, it is
V
1246
2
1 the sense of the Senate that the select committee’s issuance
2 on July 23, 1973, of two subpenas duces tecum to the Pres-
3 ident for the production of tapes and other materials was
4 and is fully authorized by S. Ees. 60. Moreover, the Senate
5 hereby approves and ratifies the committee’s issuance of
6 these subpenas.
7 Sec. 2. On August 9, 1973, the select committee and its
8 members instituted suit against the President of the United
9 States in the United States District Court for the District of
10 Columbia to achieve compliance with the two subpenas ref-
11 erenced in section 1 above, and since that time, in both the
12 district court and the United States Court of Appeals for the
13 District of Columbia Circuit, have actively pursued this litiga-
14 tion. It is the sense of the Senate that the initiation and pur-
15 suit of this litigation by the select committee and its members
16 was and is fully authorized by applicable custom and law,
17 including the provisions of S. Ees. 262, Seventieth Congress,
18 first session (1928). In view of the entirely discretionary
19 provisions of section 3 (a) (6) of S. Ees. 60, it is further
20 the sense of the Senate that the initiation of this lawsuit did
21 not require the prior approval of the Senate. Moreover, the
22 Senate hereby approves and ratifies the actions of the select
23 committee in instituting and pursuing the aforesaid litigation.
24 Sec. 3. The select committee and its members, by issuing
25 subpenas to the President and instituting and pursuing litiga-
1247
3
1 tion to achieve compliance with those subpenas, were and
2 are acting to determine the extent of possible illegal, im-
3 proper, or unethical conduct in connection with the Pres-
4 idential campaign and election of 1972 by officers or
5 employees of the executive branch of the United States Gov-
6 eminent or other persons. It is the sense of the Senate that,
7 in so doing, the select committee and its members were and
8 are engaged in the furtherance of valid legislative purposes,
9 to wit, a determination of the need for and scope of corrective
10 legislation to safeguard the processes by which the President
11 of the United States is elected and, in that connection, the
12 informing of the public of the extent of illegal, improper, or
13 unethical activities that occurred in connection with the
14 Presidential campaign and election of 1972 and the involve-
15 -ment of officers or employees of the executive branch or
16 others therein. It is further the sense of the Senate that the
17 materials sought by the committee’s subpenas are of vital
18 importance in determining the extent of such involvement
19 and in determining the need for and scope of corrective
20 legislation.
1248
93d CONGRESS fl |\nn 4 rkfl
1x8 S. RES. 132
IN THE SENATE OE THE UNITED STATES
June 25, 1973
Mr. Ervin (for himself and Mr. Baker) submitted the following resolution;
which was considered and agreed to
RESOLUTION
To increase the sums allotted to the Senate Select Committee on
Presidential Campaign Activities for the expenses of conduct-
! ing the investigation and" study authorized and directed by
Senate Resolution 60 which was adopted on February 7,
1973.
1 Resolved,
2 Section 1. That the first sentence of section 6 of Senate
3 Resolution 60, which was adopted on February 7, 1973, is
4 hereby changed to read as follows: “The expenses of the
5 select committee through February 28, 1974, under this res-
6 olution shall not exceed $1,000,000, of which amount not
7 to exceed $40,000 shall be available for the procurement
8 of the services of individual consultants or organizations
9 thereof.”
1249
93d CONGRESS
2d Session
S. RES. 327
IN THE SENATE OF THE UNITED STATES
May 20, 1974
Mr. Ervin (for himself and Mr. Baker) submitted the following resolution;
which was ordered to be placed on the calendar
May 21, 1974
Considered and agreed to
RESOLUTION
To extend the time of the Senate Select Committee on Presiden-
tial Campaign Activities for making its final report to the
Senate, and for prosecuting its judicial action against the
President for certain taped recordings.
1 Resolved, That section 5 of S. Ees. 60, which was
2 adopted February 7, 1973, is hereby amended to read as
3 follows: “The select committee shall make a final report of
4 the results of the investigation and study conducted by it
5 pursuant to this resolution, together with its findings and isuch
6 legislative proposals as it deems necessary or desirable, to
7 the Senate at the earliest practicable date, but no later than
8 June 80, 1974. The select committee may also submit to
9 the Senate such interim reports as it considers appropriate.
V
1250
2
1 After submission of its final report, the select committee
2 shall have three calendar months to close its affairs, and on
3 the expiration of such three calendar months shall cease to
4 exist: Provided, however, That in case the judicial action
5 brought by the select committee against the President to ob-
6 tain specified taped recordings of conversations in which the
7 President and his former aide, John W. Dean, participated is
8 not finally adjudicated before the expiration of such three
9 calendar months, the select committee shall continue in exist-
10 ence thereafter until thirty days subsequent to the occurrence
11 of one of these alternative events, namely, the judicial action
12 is finally adjudicated adversely to the select committee, or the
13 specified taped recordings are actually received by the select
14 committee pursuant to the final adjudication of such judicial
15 action or otherwise. In case the last event occurs, the select
16 committee is empowered to report to the Senate an adden-
11 dum to its final report setting forth findings and legislative
18 recommendations based on what the taped recordings
19 disclose.”.
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